How CalPERS Military Service Credits Are Divided in California Divorce: The Marriage of Green Case Explained

Dividing property in a California divorce isn’t always straightforward, especially when pensions, military service credits, and complex assets like CalPERS are involved. A pivotal case that highlights these complexities is the Marriage of Green, decided by the First Appellate District from an appeal in Contra Costa County.

In this in-depth guide, we’ll unpack the legal principles, explore related family law concepts, and provide practical FAQs to help you understand how military credits can become community property, even if they were earned before marriage.

Case Background: The Marriage of Green

This was the question in a recent case from the First Appellate District that was on appeal from Contra Costa County.

In the case of Marriage of Green:

• Husband served in the military for four years prior to his marriage with Wife. He was in the United States Air Force from 1982 to 1986.
• Husband started working for the Dougherty Regional Fire Authority in 1989, which later merged with the Alameda County Fire Department in 1997. The Alameda County Fire Department participates in the California Public Employees’ Retirement System (CalPERS).
• The parties married in 1992.
• CalPERS allows members to obtain up to four years of service credit for military service.
• Husband, during the marriage and using community funds, purchased the four years of military credit and added those years to his CalPERS pension.
• The parties separated in 2007, and the Wife filed for dissolution in 2008.

One of the main issues in the case was these military service credit years. Husband argued that they were his separate property since they were earned prior to marriage. Wife claimed that because they were purchased during the marriage, they were community property.

What did the trial court hold? It ruled for the Husband and said the years purchased were his separate property. The appeals court overturned the trial court and said, “No,” the service years were community.

So, how does property that was acquired before marriage become community property? Well, the appeals court was not persuaded that the property was acquired before marriage. The appellate court went through an extensive review of when this property was acquired. Were the service years “vested” or were they more of an “expectancy”? Was there an enforceable right to the service years? If so, when was the enforceable right to that property acquired?

The Court found that Husband had only an expectancy to the service years credits once he completed his military service. Thus, a mere expectancy is not an enforceable right and is not property that can be divided at divorce. But what changed everything in this case is that Husband worked for the Alameda Fire Department, and because the Alameda Fire Department participated in CalPERS, Husband was able to purchase those years by being a member of CalPERS.

Thus, the right to those years changed from a mere expectancy to a contractual right once he purchased those years through his employment with the Alameda Fire Department and CalPERS. Since the right to those service years changed from an expectancy to a contractual right during the marriage, the court found them to be community property.

Legal Framework: Why Military Service Credits Can Become Community Property

California Family Code Provisions

Under California Family Code Section 760, all property acquired by a married person during the marriage while domiciled in California is community property. This includes:

• Assets acquired with community funds,
• Rights that vest during marriage, and
• Pension contributions and benefits earned during the marriage.

Relevant statutes:

• Family Code S760: Community property presumption.
• Family Code S2610: Division of retirement plans.
• Family Code S2550: Equal division of community estate.
• Family Code S2552: Valuation of assets at time of trial.

QDRO and Joinder: The Process for Dividing CalPERS Pensions

What is a QDRO?

A Qualified Domestic Relations Order (QDRO) is a court order required to divide retirement plans like CalPERS. While CalPERS is technically a government plan exempt from ERISA, it has its own requirements for dividing pensions in divorce.

Joinder of Retirement Plan

Before a CalPERS pension can be divided, it must be joined as a party in the divorce case. This is called a joinder and is required under California Family Code S2060.

Steps:

1. File a joinder to bring CalPERS into the case.
2. Prepare a DRO (Domestic Relations Order) using CalPERS’ model language.
3. Submit for court approval.
4. CalPERS will implement the division based on the court-approved order.

Similar Cases: Building Topical Authority

Understanding the Marriage of Green in context requires looking at other key cases:

• Marriage of Brown (1976): Pension rights, even if not vested, are divisible community property.
• Marriage of Lehman (1998): Post-separation pension benefits derived from community labor are community property.
• Marriage of Gillmore (1981): The non-employee spouse has a right to pension payments once the employee is eligible for retirement, even if they choose not to retire.

Military Credits, CalPERS, and Divorce: Key FAQs

What is CalPERS?

The California Public Employees’ Retirement System (CalPERS) is the nation’s largest public pension fund, providing retirement benefits to California public employees.

What is the Uniformed Services Former Spouses’ Protection Act (USFSPA)?

The USFSPA allows state courts to divide military retirement pay as property in divorce cases. It does not automatically divide military pensions but authorizes state law to do so.

Are military service credits community property in California?

If the right to purchase the credits arises and the purchase is made during the marriage using community funds, the credits are generally considered community property.

How do I divide a CalPERS pension in divorce?

• File a joinder to bring CalPERS into the case.
• Submit a DRO with the court.
• CalPERS will divide the pension according to the court order.

Can I keep all my CalPERS credits if I get divorced?

If your CalPERS credits were earned or purchased during the marriage, they are likely community property. If earned entirely before the marriage, they may be your separate property.

Visual Aids for Clarity

Table: Community vs. Separate Property in Pensions

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