Florida SC: Divided Pension Assets Can Be Used to Pay Alimony

April 28, 2005 (PLANSPONSOR.com) - The Florida Supreme Court has ruled that a man was correctly ordered by a court to use some of the pension assets he was awarded in his divorce to continue alimony payments to his ex-wife after his retirement.

In the case of  Acker v. Acker , the state Supreme Court cleared the air of an issue that has been splitting lower courts for some time.

When they divorced in 1993, the two parties entered into a settlement agreement and assets were split between them; the husband received his Delta Air Lines pension, while the wife received – among other things – the couple’s residence, the husband’s 401(k) plan, and other IRAs and stock plans. The wife was also awarded alimony worth $3,000 every month, with an agreement to look at the alimony situation again upon the husband’s retirement in 1999.

When the husband turned 60 and retired, he called for the end of the alimony payments because his income had shrunk considerably. A state trial court denied the request however, concluding that the husband still had the ability to pay the alimony and that the there was a continued need on the wife’s part.

On appeal, the husband argued that the trial court was wrong in considering the pension benefits as a source of funds with which to pay alimony, because the airline pension had been treated as property awarded to him in the earlier agreement. The court, relying on precedent, ruled that such funds can be assets and can be used for alimony payments. However, the court noted that an error in an earlier ruling – a “his” was replaced with a “her” – caused confusion among the courts.

In writing for the state Supreme Court, Justice Charles Wells framed the issue as one based on whether pension benefits equitably distributed to a certain party may also be considered in determining the amount of alimony. In the ruling, he stated that such benefits in this case should be considered for alimony payments.

Justice Fred Lewis dissented from the decision, calling the move a scenario in which “double-dipping” occurs. In his dissent, he stated that this action makes it so there has been effectively “no equitable distribution of assets at all.”