KAREN DEAN DEWAN vs. EDMOND M. DEWAN.

HENNESSEY, C.J. The plaintiff, Karen Dean Dewan, filed a complaint for divorce and, following trial before a judge in the Probate and Family Court, a judgment of divorce nisi was entered. The plaintiff appealed from the judgment's property settlement provisions, and the Appeals Court reversed and remanded, holding that the judge erroneously had valued the husband's pension rights under the Federal employees' civil service retirement plan as the amount of money that the husband actually had contributed into the plan. Dewan v. Dewan,

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17 Mass. App. Ct. 97, 100 (1983). On remand, the judge modified the property settlement by requiring that the wife receive thirty per cent of the husband's pension benefits attributable to the period of their marriage "if and when" received. The wife appealed, and we transferred the case to this court on our own motion. We reverse the property judgment and remand the case for reconsideration.

The parties do not contend that the husband's pension benefits are not property in the husband's estate for the purposes of G. L. c. 208, Section 34 (1984 ed.). Dewan v. Dewan, supra at 98-99. See, e.g., In re Marriage of Brown, 15 Cal. 3d 838, 841-842 (1976); Janssen v. Janssen, 331 N.W. 2d 752, 754 (Minn. 1983); Kikkert v. Kikkert, 177 N.J. Super. 471, 476-477, aff'd, 88 N.J. 4 (1981); Majauskas v. Majauskas, 61 N.Y.2d 481, 491-492 (1984); Bloomer v. Bloomer, 84 Wis. 2d 124, 129 (1978). The Appeals Court stated that the husband's pension benefits could be assigned to the wife in one of two ways, either as a present assignment of a percentage of the present value of the future pension benefits or as a percentage of the pension benefits attributable to the marriage if and when the benefits are actually received. Dewan v. Dewan, supra at 100-102. On remand, the judge adopted the latter method of assigning the pension benefits and allocated to the wife thirty per cent of the pension benefits attributable to the marriage if and when they are received. [Note 1] The judge adopted this approach after determining that he had insufficient evidence to value the husband's present interest in the pension plan and after taking into consideration the husband's age (fifty-three years) and the length of the marriage (twenty-two years). [Note 2]

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The judge also modified the property judgment by requiring that the net proceeds from the sale of the marital home be divided fifty per cent to the wife and fifty per cent to the husband instead of the original division of fifty-five per cent to the wife and forty-five per cent to the husband. [Note 3]

The Appeals Court concluded that "[w]here it is appropriate to include pension rights in an equitable division, the determination whether to assign a percentage of present value as a property asset or to allocate benefits if and when received lies largely within the discretion of the judge." Id. at 101-102. The plaintiff argues that the judge's discretion is limited by certain important considerations. She says that, if it is possible in the circumstances and there is not hardship caused to the employee spouse, the proper exercise of discretion should require the present assignment of a percentage of the present value of the future pension benefits. Although she concedes that the present value approach may be troublesome when the valuation is speculative or the employee spouse does not have sufficient liquid assets of comparable value, she says that these factors are of no concern in this instance. Furthermore, she maintains that the property judgment, as decreed by the Probate judge after remand, allows the husband to receive his portion of the equity in the marital home currently, while she must wait to

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receive her portion of his pension rights, if at all, only when he decides to retire. Consequently, she contends that the judgment is not an equitable division of the property within the meaning of G. L. c. 208, Section 34, and thus the judgment should be reversed.

Presumably because of certain practical considerations, the Appeals Court did not state that the present assignment of a percentage of the future pension benefits is the preferred approach. See Dewan v. Dewan, supra at 100-102. Chief among these practical considerations is that this method of dividing pension benefits is, as the wife concedes, generally appropriate only where there are "sufficient assets available at the time of divorce to divide the present value of the retirement benefits without causing an undue hardship on either spouse." Holbrook v. Holbrook, 103 Wis. 2d 327, 340 (Ct. App. 1981). Also, an area of discretion must be left to the judge because a pension plan may have specific provisions which favor an "if and when" division.

We conclude that, where the above-mentioned practical difficulties are not a controlling factor, the present assignment of a percentage of the present value of the future pension benefits is the preferable approach. Holbrook v. Holbrook, supra. It provides an immediate settlement of the pension distribution problem and it avoids continued strife and uncertainty between the parties. Damiano v. Damiano, 94 A.D.2d 132, 139 (N.Y. 1983). See Koelsch v. Koelsch, 148 Ariz. 176, 183 (1986); Diffenderfer v. Diffenderfer, 491 So. 2d 265, 268 (Fla. 1986); Dubois v. Dubois, 335 N.W. 2d 503, 506 (Minn. 1983); Kikkert v. Kikkert, supra at 477-478. As stated in Koelsch v. Koelsch, supra, the assignment of a percentage of the present value of the future pension benefits "provides a clean break between the parties, it provides an unencumbered pension plan to the employee, it relieves the court of any further supervision, and it relieves the retirement agencies of the duty to pay benefits to anyone but the employee."

Further, although the award of the pension benefits on an "if and when" basis avoids the oftentimes difficult problem of valuing pension benefits, it may place the employee spouse in

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the position of deciding when the benefits are to commence, as a result of that spouse's decision when to retire. "A unilateral choice to postpone retirement cannot be manipulated so as to impair a spouse's interest in those retirement benefits." In re Marriage of Gillmore, 29 Cal. 3d 418, 423 (1981). See Yee v. Yee, 23 Mass. App. Ct. 483, 484-486 (1987) (invalidating a property judgment in which the proceeds from the sale of the marital home were to be divided between the parties when the wife was "no longer desirous or capable of maintaining the marital home"). Certainly, in situations in which the employee spouse continues to work even though he is eligible to retire and commence receiving pension benefits in some amount, he is able to delay the nonemployee spouse's receipt of her share of the pension benefits. Furthermore, the nonemployee spouse is subject to the risk of losing her interest completely if the employee spouse were to die prior to retirement. [Note 4]

In reviewing a judgment pursuant to Section 34, we have required a two-step analysis. Bowring v. Reid, ante 265, 267 (1987). "First, we examine the judge's findings to determine whether all relevant factors in Section 34 were considered." Then we must

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determine "whether the reasons for the judge's conclusions are apparent in his findings and rulings." Id. We have examined the judge's findings and conclude that he considered all the necessary factors under Section 34. However, we cannot conclude that the reasons for the judge's property judgment on remand are apparent from the findings. The Appeals Court recognized that the original property judgment could be considered "within the range of equal division," but reversed the judgment, reasoning that "the apparent symmetry, if that was intended, depends on the correctness of the judge's finding that the husband's rights under the pension plan were to be measured by his accumulated contributions . . . ." Dewan v. Dewan, supra at 98. The "apparent symmetry" was clearly broken when the judge on remand increased the husband's interest in the marital home by approximately $5,200 (assuming a value for the home of $110,000 subject to a mortgage of $6,000 as found by the judge) and provided him with a seventy per cent interest in the future pension benefits attributable to the marriage if and when received. Although the husband received 100 per cent of the pension benefits in the original property judgment and, thus, his interest decreased by thirty per cent under the judgment as modified, the original property judgment erroneously valued the pension benefits at $33,963, on the incorrect basis of "that amount of money [the husband] presently has invested in [the pension plan]." The wife presented evidence that the present value of the future pension benefits was, at a minimum, approximately $200,000. Although the judge could properly reject this present value figure, the figure gives some indication that we do not have here a reasoned property division. Further, on remand the judge provided no additional findings to indicate why the husband should receive a substantially greater share of the pension benefits attributable to the marriage than will the wife, when the property previously had been divided in apparently equal proportions.

For all these reasons, remand of this case is required so that the judge may properly explain his reasoning for the property awards. See Redding v. Redding, 398 Mass. 102, 108 (1986); Bowring v. Reid, supra at 267-268. The reasoning should show

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the proportionate share of the total property intended for each party, and the itemized distribution should be consistent with that general intention. We perceive nothing in the record which shows that the present value of future pension benefits cannot be reliably calculated, even if the matter requires further evidence. Therefore, in the absence of compelling reasons why they cannot be so treated, the pension rights are to be considered in light of their present value determined as of the date of the calculation. [Note 5]

The case is remanded to the Probate and Family Court for reconsideration consistent with this opinion.

So ordered.