Jackson v. Sollie
141 A.3d 1122
| Md. | 2016Background
- Milton Jackson (federal CSRS participant) and Gayle Sollie (state MSRS participant) divorced after 35 years; the parties disputed division of their retirement benefits.
- Jackson’s CSRS pension substitutes for Social Security; he has only minimal Social Security eligibility due to prior private-sector work; Sollie has MSRS and full Social Security coverage.
- Jackson asked the trial court to value and subtract (offset) a hypothetical “embedded” Social Security component from his CSRS marital share so Sollie would not receive part of that implicit Social Security value.
- The Circuit Court rejected the offset and split the marital portions of each pension 50/50 using the Bangs formula; Jackson appealed to the Maryland Court of Appeals.
- The Court addressed (1) whether federal law preempts a state court from offsetting hypothetical Social Security benefits embedded in a CSRS pension, and (2) whether a court must consider actual or anticipated Social Security benefits when deciding a monetary award under Md. Fam. Law § 8-205(b).
Issues
| Issue | Plaintiff's Argument (Jackson) | Defendant's Argument (Sollie) | Held |
|---|---|---|---|
| Whether a trial court may offset hypothetical Social Security benefits embedded in a CSRS pension when dividing marital property | Courts may compute and subtract an implicit Social Security element from the CSRS pension so distribution is equitable | Federal law (anti-assignment/anti-attachment) and Hisquierdo bar direct or indirect division of Social Security; valuation is speculative | Preemption: trial courts may not offset or otherwise divide Social Security benefits (including hypothetical value) against a CSRS pension |
| Whether a court must consider parties’ actual or anticipated Social Security benefits under F.L. § 8-205(b) when deciding a monetary award | Offsets forbidden, but courts should still account for Social Security expectations to achieve equity | Considering Social Security risks invading federal domain or requires speculative future valuation | Courts must consider actual or reasonably anticipated Social Security benefits as a relevant factor under § 8-205(b) when determining monetary awards, but may not assign a lump-sum value for transfer/offset |
| Whether hypothetical valuation of Social Security within CSRS is sufficiently reliable for property division | Expert valuations can estimate present value of hypothetical Social Security for offset formulas | Such valuations are speculative and Congress may alter benefits; therefore unreliable and preempted | Valuations of hypothetical Social Security within CSRS are speculative and cannot be used to effect an offset |
| Remedy in this case | Remand to adjust pension division after applying offset | Affirm 50/50 marital-share division but consider Social Security in awarding monetary adjustment | Judgment vacated and remanded: court may not offset CSRS by Social Security value but must consider parties’ anticipated Social Security benefits in § 8-205(b) analysis |
Key Cases Cited
- Flemming v. Nestor, 363 U.S. 603 (1960) (Social Security benefits are noncontractual and not an accrued property right)
- Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979) (federal statutory scheme preempts state court from directly or indirectly dividing federal retirement benefits analogous to Social Security)
- Cornbleth v. Cornbleth, 580 A.2d 369 (Pa. Super. 1990) (state court devised method to value and offset hypothetical Social Security element in CSRS pension for equitable distribution)
- Depot v. Depot, 893 A.2d 995 (Me. 2006) (distinguishing between prohibited offsets and permissible consideration—permitting general consideration of anticipated Social Security benefits but prohibiting lump-sum transfers to offset them)