REVISE EQUITABLE DISTRIBUTION LAWS.

View NCGA Bill Details2019-2020 Session
Senate Bill 491 (Public) Filed Tuesday, April 2, 2019
AN ACT TO REVISE THE LAWS PERTAINING TO EQUITABLE DISTRIBUTION.
Intro. by Britt.

Status: Re-ref to Judiciary. If fav, re-ref to Rules and Operations of the Senate (Senate action) (Apr 15 2019)
S 491

Bill Summaries:

  • Summary date: Apr 2 2019 - More information

    Substantively identical to H 469, filed 3/26/19.

    Amends GS 50-20.1, concerning the equitable distribution of certain marital benefits, retitling the statute Pension, retirement, and deferred compensation benefits (was, Pension and retirement benefits). Modifies and adds to the statute's provisions, now providing as follows.

    Provides for the distribution of vested marital pension, retirement, or deferred compensation benefits to be payable as a lump sum from the plan, program, system, or fund for those benefits; as fixed amounts over a period of time from the plan, program, system or fund for those benefits; as a prorated portion of the benefits made to the designated recipient at the time the participant-spouse, as defined, is eligible to receive benefits, actually begins to receive benefits, or reaches earliest retirement age (previously limited to the time the time the party actually begins to receive benefits and by appropriate domestic relations order); by awarding a larger portion of other assets to the party not receiving the benefits and a smaller share of other assets to the party entitled to receive the benefits; or as a lump sum, over a period of time in fixed amounts, by agreement (not previously an option). 

    Provides for the distribution of nonvested marital pension, retirement, or deferred compensation benefits to be payable as a lump sum agreement; over a period of time in fixed amounts by agreement; or as a prorated portion of the benefits made to the designated recipient at the time the participant-spouse, as defined, is eligible to receive benefits, actually begins to receive benefits, or reaches earliest retirement age, if permitted by the plan, program, system, or fund (previously limited to the time the time the party actually begins to receive benefits and by appropriate domestic relations order).

    Makes conforming changes throughout to refer to the plan, program, system, or fund for the benefits rather than the fund or plan for those benefits. Prohibits a court from requiring the administrator of the plan, program, system, or fund involved to make any payments or distributions to the nonparticipant spouse, except as the terms of the plan, program, system, or fund permit (previously prohibited until the party against whom the award is made actually begins to receive the benefits unless the plan permits an earlier distribution).

    Provides that when the amount of the benefit payable by the plan, program, system, or fund to the participant-spouse is determined in whole or part by the length of time of the participant-spouse's employment, the marital portion is determined using the proportion of time the marriage existed simultaneously with the total time of the employment which earned the benefit subject to equitable distribution to the total amount of time of employment which earned the benefit subject to equitable distribution (clarified from existing language). Maintains existing language concerning the determination calculation. Requires the award to include costs of living adjustments and similar enhancements to the participant's benefit. Provides that if a court makes the award payable as a prorated portion of the benefits made to the designated recipient, as specified in subdivisions (a)(3) or (b)(3) as amended, and divides the marital portion of the benefit equally, the court is not required to determine the total value of marital benefits before classifying and distributing the benefits; however, neither party is prohibited from presenting evidence of the total value of any marital benefits or any benefits that are separate property of either spouse. Provides for a similar distribution where a pension, retirement, or deferred compensation plan, program, system, or fund, or applicable statute, limits or restricts the amount of the benefit subject to equitable distribution.

    Requires the court to determine the award when the amount of the benefit payable by the plan, program, system, or fund is based on contributions and held in one or more accounts with readily determinable balances, by determining the amount in the account balance that is due to contributions made or earned during the marriage and before separation, together with the income, gains, losses, appreciation, and depreciation accrued on those contributions. Allows the court to determine the award based on the proportion of the time the marriage existed simultaneously with the employment which earned the benefit subject to equitable distribution to the total amount of time of employment, as in subsection (d) as amended, if sufficient evidence is not presented to the court to make the determination required. Either way, requires the award to be based on the vested and nonvested accrued benefit as of the date of separation, together with the income, gains, losses, appreciation, and depreciation accrued after the date of separation on the date-of-separation benefits. Prohibits the award from including contributions that can accrue or be made after the date of separation, or any income, gains, losses, appreciation, and depreciation accrued on those contributions. 

    Maintains the award cap of 50% of the benefits the person against whom the award is made is entitled to receive as vested and nonvested pension, retirement, or deferred compensation benefits, except as previously specified. Maintains the provisions providing for the unpaid balance of the award to pass as previously specified in the event the person receiving the award dies.

    Provides further specifications for when an award is made payable as a prorated portion of the benefits made to the designated recipient pursuant to subdivisions (a)(3) and (b)(3) as amended, regarding awards and allocations dependent on whether the pension, retirement or deferred compensation plan, program, system, or fund permits the use of a "separate interest" approach in the domestic relations order.

    Adds that whenever a pension, retirement, or deferred compensation plan, program, system, or fund does not automatically provide pre-retirement survivor annuity protection for the nonparticipant spouse, the court is required to order the protection for the nonparticipant spouse if permitted by the plan, program, system, or fund. Authorizes the court to equally allocate any fees assessed by the plan, program, system, or fund in order to process any domestic relations order or qualified domestic relations order.

    Maintains the provisions concerning a court's avenues to require distribution of the award, now including by domestic relations order.

    Clarifies that the statute and GS 50-21 apply to all vested and nonvested pension, retirement, and deferred compensation plans; programs; systems; or funds, including but not limited to the specified programs and plans provided, including uniformed services retirement programs, church plans, and charitable organization plans (previously specified certain plans but did not qualify that covered plans are not limited to those specified).

    Provides for a court to enter a subsequent order to clarify or correct a prior order upon a plan, program, system, or fund deeming an order providing for distribution of its benefits unacceptable. 

    Allows a claim to be filed, as specified, for an order effectuating the distribution of benefits provided in a valid written agreement, as defined in GS 50-20(d), whether or not a claim for equitable distribution has been filed or adjudicated. Authorizes a court to enter an order effectuating the distribution provided for in the valid written agreement.

    Applies to distributions made on or after October 1, 2019.


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