*1 A.2d 732 GORDON, Appellant, William GORDON, Appellee. Feeney A. Rosemarie Pennsylvania. Supreme Court Re-Argued April Aug. Decided Amending Decision on Denial Order 15,1996. Reargument Oct. *2 Appellant. for Meeting, Plymouth Shingles, M. Stanley Crawford, Philadelphia, D. James McLaughlin, Julia Appellee. CASTILLE, CAPPY, ZAPPALA, FLAHERTY,

Before NEWMAN, JJ. NIGRO THE JUDGMENT ANNOUNCING

OPINION THE COURT OF FLAHERTY, Justice. relating equitable

This to the issues various case concerns first issue concerns a marital estate. distribution occurs distribution fund where of a valuation and the fifteen certain whether issue is The second status. already employee- accepted by inducements *3 his increasing the effect of which have benefits, in the marital estate. are includable retirement 31, May married on Gordon and William Rosemarie Company Oil working with Sun began Mr. Gordon 1958. twenty-seven for continuously there worked of 1960 and June the mar were one-half of which and years, seventeen The emancipated. are now two children parties’ riage. filed for 31,1977. Mr. Gordon on December separated parties Divorce under the 1979, proceeding case is and the divorce 2, August granted A divorce was bifurcated of 1980.1 Code hearings before distribution 1985, equitable two and after trial hearing. The a de novo master, requested Mr. Gordon 11, 4, April and between October hearings held six court an order and 29, trial court issued 1992 the October 1991. On $677,406.2 The court marital estate finding a opinion 401, 63, 26, 2, 1980, § April P.L. No. Divorce Code 1. The 401, by amended, substantially reenacted repealed § was and 23 P.S. IV of the § 2. See Part No. P.L. Act of December Code, §§ 3101-3707. 23 Pa.C.S. Relations Domestic writes: Now, held, testimony. pages yielding hearings were Nine later, a result novel. As reads like a Dickens years the record fifteen and formulated equally the marital estate divided offset method of on the immediate distribution scheme based pen court assets. The trial valued marital apportioning (at hearing), the time of the value present sion fund at its time, At that fraction.3 by reduced the coverture consists of The court found that estate status. pay was following assets: $161,000 1. Marital residence ($293,544x .65 Oil Pension 2. Mr. Gordon’s Sun (17.5years fraction divided marital coverature = $190,804 .65)) 26.7 3. Mr. Gordon’s .65) 57,687 ($88,749 x $ a. Continuation .65) 4,615 ($7,100 x $ b. Retirement bonus .65) 53,300 ($82,000 x $ $100,000 c. Orbit Suncap Savings Account (465 per marital shares $56.00 5. Sun Oil Stock 26,000 share) $ of marital residence less Mrs. 6. Fair rental value payments mortgage Gordon’s credits 84,000 $ maintenance $677,406 MARITAL ESTATE TOTAL valua- affirmed the trial court’s appeal, Superior Court On identification, share of the and its tion of the marital estate, of the balance of the valuation and distribution trial referred to as it court except excluded what (c) benefits,” 3(a), (b), from “retirement items inability differences and their dissatisfac- parties' to settle their *4 of the marital court’s evaluation and distribution tion with the trial estate, marriage. litigation long almost as as the the has now endured omitted). (Footnote Slip Op. at 1 is defined as: 3. The coverture fraction to the portion value of the that is attributable of the period fraction is the total of time marriage. The numerator of the participant plan from the date of employee spouse was a in the marriage separation, and the denominator until date of plan. participation period of in the total 5,n. 591 n. 5 Berrington Berrington, 534 Pa. 398 v.

395 3(a) (b) that items and Court determined Superior estate.4 3(c) rejected item marriage. It not accrue did with funds annuity purchased it because was traced to marital assets. that could not be two issues: granted allocatur address We situation, the value of offset in an immediate Whether benefit pension of a defined portion marital-property and salary by using is to determined plan or of retirement. on date of the date separation effect “retirement bonus” pay” the “continuation 2. Whether portion thereof any “orbit” account combination purposes property deemed marital should be distribution. controlled questions to both of these are The answers 534 Pa. Berrington, Berrington our recent decision (1993). In issue was Berrington, primary A.2d of marital assets the court whether a deferred distribution benefit based on property could distribute as marital efforts, pay raises and party’s post-separation participating held it could not: contributions. We in a of a defined benefit hold that deferred distribution [W]e may not be awarded pension, participating any portion of the retirement benefits participant-spouse’s increases, incen- post-separation salary on which are based Any tive awards or of service. retirement benefits only must be non-participant spouse awarded to the based salary separation. at the date of participant-spouse’s A.2d at Berrington, 534 Pa. at is that the Divorce holding rationale behind Code, 3501(a), acquired § excludes Pa.C.S. as If after- property. from consideration marital marital, part it not be of the is not separation property (cid:127) appeal, he court determined that 4. After Mr. Gordon had filed his trial $100,000.00 Suncap savings identifying had erred the entire it property. The Oil stock marital account and 465 shares Sun as acknowledged error and the trial court's amended $44,001.75 Suncap account the marital share of the order reflect of the Sun Oil stock. and 157 shares as *5 396 citation of cases notwith

marital estate. Court’s to cases which there standing, analysis applies equally is a deferred distribution of marital assets and cases which In no case there is an immediate offset of marital assets. calculating considered in separation assets earned after a pension.5 value of therefore, pension,6

The value of Mr. Gordon’s equitable have been calculated at the time of distribu should earned at the date of utilizing salary tion benefits, pension will to receive begin date Mr. Gordon mortality and interest discount rates. This appropriate case, will, us the give calculation in an immediate offset present of the value must then be present pension. value fraction of .65. The end result is the reduced the coverture See pension. of the value of the portion present marital v. 19, 50, DeMasi Pa.Super. DeMasi (1987). identified, portion of the estate is Once determined share of the estate awarded to each is then shares of the respective percentage accordance with their marital estate. Mr. refers to as question

The second concerns what Gordon announced employer “retirement incentives.” Mr. Gordon’s Although Berrington this case involves immediate offset and involved distribution, separation year lapse between deferred the fifteen brings parameters of equitable distribution is what this case within the helped produce Berrington, post-separation events to for in both cases Berrington problem how to treat the retirement benefit. addresses efforts, post-separation post-separation events and holds that raises analysis are to be excluded from the of what consti- and contributions retirement benefit. tutes a marital share case, offset, involving speak ''valuing” we In this immediate note, however, distribution, that in a deferred one benefit. We pension plan portion of the at the time of does not ‘‘value” the marital factors, distribution, equitable are such as because there unknown plan participant will retire and whether the formulation of the when the change equitable One identifies the marital will distribution. benefit, In an immediate but one does not “value” it. share offset, however, dealing present one is in the instead of the future. The against presently being offset other marital share of the is property, and it "valued” as of the date of distribu- is Sutliff, Pa. 543 A.2d 534 In this tion. See Sutliff this case, salary primarily which we are concerned about value, salary or at retirement. used to calculate were available inducements retire which series of 1987 a of a supplemental consisted The inducements Mr. Gordon. of time based period income for *6 years, in and paid on recent service,7 a based bonuses bonus (ORBIT), in 27% employee paid which the annuity program The 73%. annuity employer paid and the the cost of the of protec for inflation provide was to of this inducement purpose year per a three by paying percent tion of retirement benefits years. in benefits for fifteen increase these to retire arises these inducements The issue of how to treat benefits, sub- that these which the husband asserts because to nothing do pension, value of the have stantially increase the at the time of salary pension or benefits Gordon’s with Mr. therefore, of his are, the valuation part not of and separation, Gordon, of distribution. Mrs. equitable pension purposes Berring- from however, previous that the points passage out continues as follows: ton payable in increases retirement benefits there be

[S]hould separa- of the date marital employee spouse to between spouse begins receiv- non-participant tion the date the and or are not attributable to efforts ing which benefits increased participant-spouse, any of such contributions spouse based non-participant be shared marital estate. her share of the upon proportionate his or A.2d at 594. 534 Pa. at to of was determine

Although Berrington the main thrust of partici- in deferred distribution component separation, of and thus at the time spouse’s pension pating including prohibition of follow the Divorce Code’s estate, recog- in the marital we also acquired separation after of nature and value changes nized that some are a different character occurring after part or on the they through expense arise no effort participating changes These spouse. contributions, there- to the labors participant’s attributable fore, regarded property acquired are not $88,749.00. 7. The value of this benefit as adjustments plan but to the which should be available to parties to marriage. both purpose the above- quoted passage Berrington from was to allow the non-partici- pating spouse changes plan benefit from in the which no distribution, one knew about the time of through which arose effort expenditure no part participating spouse. Referring recently back to the most passage cited from Berrington, questions three must answered in order to First, apply Berrington to case. were there increases Gordon; second, retirement benefits payable Mr. they were payable between the time of marital separation and the time benefits; begins receiving third, Mrs. Gordon they were produced by efforts or contributions Mr. Gordon? As to first question, plain it is the retirement *7 of supplemental income, inducements retirement bonus and annuity resulted in in increase retirement to benefits Mr. Gordon. Had he not chosen to accept inducements, his retirement would have been less than it now is. Mr. Gordon’s claim that payments part these are not of a retire plan merit, ment they is without for are related to only his follows, therefore, It retirement.8 that there in were increases Gordon, retirement benefits payable to Mr. and the first requirement is satisfied. argues

8. Mr. Gordon that none of the three items which the court trial First, anything called "retirement benefits” has to do with retirement. part he states that these are company pension plan; benefits not of the second, third, that these benefits are not evetyone; offered to no that knew parties one of the separated; existence of these benefits when the fourth, benefits; pension plan that no funds are used to for these fifth, event, any in during that these benefits did not accrue marriage. arguments offering These are company, without merit. The in- retire, augment ducements to existing plan. elected retirement It significance evetyone no augmentation that not is offered this are paid by pension plan company, that benefits not for funds. The effect, basis, on an ad hoc simply pension plan amended its for the employees. benefit of certain argument As to the that did benefits not accrue marriage, argument is addressed in the text. payable were Second, retirement inducement Mrs. and the time the time of between benefits, did not the benefits since receiving began Gordon being paid Mr. Gordon was at the time of exist had hearing, and Mrs. Gordon time of the these benefits the time benefits at to receive retirement yet not begun therefore, is requirement, The distribution. second satisfied. not benefits were

Third, the increased part, for the most Mr. Gordon. contributions of to the efforts or attributable simply the bonus were retirement income and Supplemental service, no effort required and so upon years benefits based Gordon, annuity, from Mr. but ORBIT or contributions years period fifteen for designed protect inflation, by 27% Mr. Gordon paid from was against erosion annuity paid by employer.9 portion and 73% the by Mr. paid for employer, but not the along Gordon, therefore, in the marital estate is includable To the income and bonus. supplemental with of Mr. product benefits were not the extent that the increased contributions, require the third present Gordon’s efforts increased benefits are includable ment is satisfied and these the marital estate. three retirement inducements

When one includes these estate, however, recognize one must twenty- Mr. Gordon’s entire produced by were inducements merely the seventeen and one- employment, seven and was Mr. worked for Sun years during half which Gordon *8 in the of the inducement benefits married. The inclusion therefore, estate, by reduced coverture must be marital fraction. $27,000 annuity paid from roughly to ORBIT

9. Mr. Gordon account, Although amount was Suncap savings a marital asset. determined, account had been paid the marital share of that before account, $27,000 Suncap are still there when the is deducted from ultimately satisfy what was deter- in the account to sufficient funds short, property. Mr. contribution to marital In Gordon's 27% mined paid annuity from funds other than marital to the ORBIT was was, therefore, funds, properly from the marital estate. and excluded sum, offset, In of purposes of an immediate the value pen- marital-property Mr. Gordon’s defined benefit is to using salary sion be determined date of by status, adjusted not the date it and pay enters present using salary by value multiplied to be coverture to Superior fraction obtain the marital value. Court erroneously in included raises violation of post-separation Berrington. addition, In because not they are attributable Gordon, the efforts or contributions Mr. the retirement bonus, inducements consisting salary, of continuation of and the in annuity 73% of the ORBIT are to be included estate, but are to in by be reduced value the coverture fraction.

Reversed and remanded to the Court Common Pleas of County. Delaware

NIX, C.J., in participate did the consideration or decision of this case.

NEWMAN, J., concurring files a opinion. ZAPPALA, J., files a concurring dissenting opinion and NIGRO, J., joins. which

CASTILLE, J., files a concurring dissenting opinion. NEWMAN, Justice, concurring.

I join majority opinion Flaherty. Mr. Justice However, I reject write separately explicitly application of LaBuda, LaBuda (1986), Pa.Super. A.2d denied, allocatur (1987), upon 514 Pa. 524 A.2d 494 relied below and Mr. Justice Castille his concurring and dissenting opinion analyzing whether Mr. Gordon’s incentives property. are marital Here, after more than eighteen marriage, Mr. Gordon obtained a divorce on indignities based to his person.1 where, provides 1. The Divorce grant Code that the court a divorce considerations, among other fault-based has such "[o]ffered indignities injured spouse spouse’s to the innocent and render as to 3301(a)(6). § condition intolerable life burdensome.” 23 Pa.C.S. *9 date as December parties’ separation fixed the The trial court distribution, Mr. equitable before July In 31, 1987, to select As incentive accepted early retirement. Gordon bonus, retirement, a retirement accepted Mr. Gordon annuity. an “ORBIT” income and supplemental trial October Nearly fifteen estate,2 of equitable distribution court ordered of method distribution.3 the immediate offset applying to the Divorce Code: Pursuant shall, annulment, upon the court divorce or an action for [i]n divide, assign, in kind party, equitably or request distribute of either otherwise, regard parties without property between the or as the manner proportions such misconduct such to marital factors, including: considering all relevant just after court deems (1) marriage. length The (2) prior marriage party. Any of either income, station, health, (3) age, of voca- amount and source The estate, skills, of and needs each of employability, liabilities tional parties. education, training (4) by party to or one The contribution party. earning power of the other increased (5) capital acquisitions of opportunity party of each for future assets (6) income. including, parties, but not of both The sources of income to, retirement, medical, or other benefits. insurance limited acquisition, (7) party in the dissipation of each The contribution property, depreciation appreciation of the marital preservation, including party of a as homemaker. the contribution (8) apart party. of set each The value (9) living parties established The standard of marriage. Federal, (10) including party, of each The economic circumstances ramifications, proper- the division at the time State and local tax ty is to become effective. (11) serving any the custodian of party will be as Whether the dependant minor children. 3502(a). party § the trial court’s Neither has contested 23 Pa.C.S. alimony court's denial equal the marital estate or the trial division of party. to either distribution, the marital assets method of 3. Under the immediate offset order, based on distribution are divided the time of Miller, Pa.Super. present value. Miller v. their denied, As our A.2d 794 allocatur 525 Pa. where, here, parties possess assets explained, sufficient Court has party, offset pension to the immediate the award of the one offset advantage effectuating a immediate settle final and method has the parties. Id. See also of assets between the ment the distribution The trial court included the marital estate Mr. Gordon’s incentives, early retirement reduced the coverture fraction. *10 The court reasoned that these incentives were Mr. upon based and, twenty-seven years Oil, Gordon’s of service with Sun thus, had accrued the marriage. LaBuda, on

Relying the Superior part Court reversed that of the trial court’s Order that the early included LaBuda, incentives In the marital estate. the husband accepted a special early retirement program incentive after The LaBuda Court held that the parties the separated. had early retirement incentive had not accrued during the mar- because, riage unlike basic benefits the parties contemplated throughout marriage, the the parties did not anticipate the plan during incentive it marriage because 'was offered unexpectedly by the employer separation. after Berrington Berrington,

Following 534 Pa. (1993), I disagree that the unanticipated nature of the dispositive where, here, retirement inducement is as increased benefits part are participant spouse’s retire- ment package years based of service during marriage not product and are of any post-separation efforts participant contributions of the spouse.

In Berrington, distribution, which involved deferred that post-separation held increases retirement bene fits payable the participant spouse that are not attributable to the post-separation efforts or contributions of the partici pant spouse may shared the non-participant spouse based on his or proportionate her share of marital estate.4 Berrington,

Berrington v. 534 Pa. n. A.2d 592 n. 7 Berrington, 401(e) In this Court referred to Section of the Divorce 2, 1980, April Code of substantially specifically which as reenacted provides: chapter, property” General rule.—As used in this "marital means all property acquired by party during marriage, including either non- designed provide rationale is Berrington changes in benefit of favorable participant spouse to the not attributable to factors payable owing or contributions efforts spouse’s post-separation participant non-partici- and the date the between date his or her spouse begins receiving pant of this application limits Berrington Nothing benefits. To the distribution. deferred involving to cases rationale here, does occur where, distribution contrary, Berring- separation, application until fifteen awarding non-participant avoids properly ton rationale him or her to receive and allows non-marital spouse in- to the in value proportionate share increased factors enjoys through the participant crease value efforts post-separation spouse’s to that not attributable *11 contributions. reasons, that majority’s determination join

For I these part and of bonus, the continuation the retirement fraction, are to the coverture annuity, by ORBIT reduced in estate. included the marital Justice,

ZAPPALA, dissenting. concurring and Justice concurring opinion in join dissenting I I it to the ORBIT account. would as relates except Castille account, consisting employ- of both the entire ORBIT exclude contributions, property for er and from employee by Superior Court: reasons articulated claim, trial court argues that In his fifth Husband his Retirement Benefit Optional characterized improperly (ORBIT) ORBIT was a marital asset. Investment Trust value, any prior nonmarital to the date increase in (1) (3), paragraphs except: acquired pursuant property pant 23 Pa.C.S. non-participant salary vorce, (4) spouse’s increases, Property except § 3501(a)(4). incentive awards or acquired ^[*] # Accordingly, benefits that are after final acquired 4s be awarded years of service. ^[*] separation until we in exchange held in sfc any portion of the based on ^[*] Berrington for marital assets. post-separation the date of di- that partici- by offered Company Sun Oil four after the parties separated. Although separate from the retire- ment incentive program by offered Sun ORBIT Oil monthly increased Husband’s beginning retirement benefit July Although purchased Husband ORBIT with ($27,033.47) Account, funds from Suncap we not find do dispositive this here. option This was an offered to Hus- four years separation; time, band the funds in Suncap Account had not been distributed into marital shares. It is impossible to tell at this point any whether of the Suncap Account was used to purchase speculate ORBIT and we cannot it was. Gordon, 126, 147, Gordon v. Pa.Super.

NIGRO, J., joins in this concurring opinion. and dissenting CASTILLE, Justice, concurring and dissenting.

I with the agree Opinion Announcing Judgment Court that Superior Court erred in its analysis regarding the valuation pension. However, of Mr. disagree Gordon’s I with its determination that Court erred excluding the “continuation pay” and “retirement bonus” from marital property. In making determination that these assets should be included property, as marital Opinion Announcing the Judgment of the Court relies upon Court’s reasoning Berrington v. Berrington, 534 Pa. *12 (1993), 633 provides A.2d 589 which that a non-employee any should able to share in increases in post-separation benefits which occurred but were not attribut- able the to efforts or contributions of the participating spouse. 403, rationale, however, Id. at 633 at A.2d 594. This was designed for circumstances a dictating deferred distribution to attempts the compensate non-employee spouse waiting receive his her of the pension benefits. 414, 600; Holland, Id. at 633 A.2d at Holland v. 403 Pa.Super. alloc, 116, (1991), denied, 58 528 Pa. 596 A.2d

405 an immediate offset with dealing we are 158 As not case, applicable.1 reasoning this situation and “retirement pay” “continuation I that the believe LaBuda, Pa.Super. 349 LaBuda v. squarely fall under bonus” alloc, denied, A.2d (1986), 514 Pa. 524 A.2d 971 when of (1987), the determination being the crucial factor Id. at question. benefit in “right” accrued the the party out, this points Court Superior A.2d 976. As at was a benefit offered program early retirement incentive rather, basis; company it offered was on a continuous During down-sizing reorganization. times of during Gordon had no of Mr. or at the time marriage Court, fact, to this Mrs. In in her brief “right” to this benefit. only “possibility” that there was acknowledged Gordon program. benefit from an Mr. could Gordon 21). accrued when “right” Mr. Gordon’s (Appellee’s Brief of reorganization package during he was offered Furthermore, incen that these appears it his department. original pension any in lieu of provided tives were not marriage; they rather were which accrued Therefore, these benefits to those benefits. given in addition I Accordingly, estate. from the marital should be excluded deter Superior I affirm the Court’s as would separately write mination of this issue.

Moreover, Opinion I disagree with determination employer’s of the Court that Announcing Judgment $73,000 purchase of the ORBIT toward the contribution Rather, agree I as a marital asset. account should be included account should that the entire ORBIT with the Court this incentive was because be excluded from separation. four date appellant offered to argue Judgment Opinion Announcing the 1. The separation and distribution year lapse between the the fifteen reasoning Berrington, I do not bring but this case under would inability to this matter a reasonable parties' settle believe that the should be the determination of what of time should dictate amount property. included marital *13 ORDER And October, 1996, now this 15th day of appellant’s request for reargument is denied. The August order of 1996 is amended as follows. The order of Court is reversed as to Issue 1. The order of Superior affirmed evenly divided court as to Issue 2.

681 A.2d 740 ZERBE, Jr., Appellee, Thomas C. UNEMPLOYMENT REVIEW, COMPENSATION BOARD OF Pennsylvania,

Commonwealth Office Attorney General, Intervenor. Appeal Pennsylvania, of COMMONWEALTH of OFFICE GENERAL,

OF ATTORNEY Intervenor. Supreme Pennsylvania. Court of

Argued Dec. Aug. Decided