Gemma v. Gemma
105 Nev. 458, 1989 Nev. LEXIS 254, 778 P.2d 429 (1989)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A non-vested pension interest acquired during a marriage is community property. The non-employee spouse may elect to receive their share of the pension benefits at the time the employee spouse is first eligible to retire, regardless of whether the employee spouse actually retires.
Facts:
- On January 2, 1980, Joseph Gemma joined the Las Vegas Metropolitan Police Department and began participating in the Public Employees Retirement System.
- Joseph Gemma and Lois Gemma were married on May 9, 1981.
- On May 6, 1986, the couple entered a property settlement agreement that resolved all community property issues except for any interest Lois might have in Joseph's retirement plan.
- At the time of the divorce proceedings, Joseph's pension rights had not vested, as vesting required ten years of service, which he would complete on January 2, 1990.
- Under the pension plan's terms, Joseph was eligible to retire at age 50 with at least twenty years of service, or at age 55 with at least ten years of service.
Procedural Posture:
- Joseph Gemma and Lois Gemma initiated a divorce action in a Nevada district court (trial court).
- On January 8, 1988, the district court entered a final decree of divorce.
- The district court ruled that Joseph's non-vested pension was a community asset, divided it equally using the 'time rule,' and held that Lois could demand payment when Joseph was first eligible to retire.
- Joseph Gemma (appellant) appealed the district court's judgment regarding the pension division to the Supreme Court of Nevada, with Lois Gemma as the respondent.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a non-employee spouse have a community property interest in a non-vested pension plan that allows them to receive benefits when the employee spouse first becomes eligible to retire, regardless of the employee's actual retirement date?
Opinions:
Majority - Rose, J.
Yes, a non-employee spouse has a community property interest in a non-vested pension and can receive benefits upon the employee's first eligibility to retire. Retirement benefits earned during a marriage are community property even if not vested. The court adopts the 'time rule' as the appropriate method for dividing such benefits, where the community share is determined by a fraction based on the length of the marriage during the pension's accumulation. To prevent unfairness, the non-employee spouse cannot be forced to wait for the employee spouse to actually retire, as this would give the employee spouse unilateral control over a community asset.
Analysis:
This decision aligns Nevada with other community property states like California by classifying non-vested pensions as divisible community property. By endorsing the 'time rule' for calculation and allowing payment upon eligibility rather than actual retirement, the court establishes a clear and equitable framework for dividing future benefits. The court's novel suggestion that trial courts retain jurisdiction to adjust for extraordinary post-marriage achievements introduces flexibility, preventing windfalls and ensuring the division reflects the community's actual contribution. This ruling provides crucial guidance for family law, preventing employee spouses from unilaterally delaying or diminishing an ex-spouse's vested community property rights.
