Appeal from the Circuit Court of St. Clair County. No. 90-D-1272. Honorable John M. Goodwin, Jr., Judge Presiding.
The opinion of the court was delivered by: Chapman
JUSTICE CHAPMAN delivered the opinion of the court:
Robert Blackston is employed by the Federal civil service system and has a pension with the Civil Service Retirement System (the CSRS). He has participated in the CSRS continuously since September 1965. Robert and Barbara Blackston were married in 1968, and their marriage was dissolved in September 1992. Each spouse was awarded a portion of the other spouse's employment retirement benefits. Robert argues that the trial court's division of his CSRS pension is erroneous. We reverse and remand.
We will begin with an examination of the CSRS pension. Robert testified that his pension will provide benefits and an annuity upon his retirement. He currently contributes 7% of his gross salary through withholding, but the CSRS is primarily funded by his governmental employer and by Federal taxpayers. Robert's salary increases periodically due to cost-of-living allowances, promotions, and merit pay. Robert's CSRS pension is a defined-benefit plan, which means it has definitely determinable benefits and the contributions are not geared to profits. (See B. Goldberg, Valuation of Divorce Assets § 9.2, at 232 (1984).) Under a defined-benefit plan, as opposed to a defined-contribution plan, the benefits received by an employee are determined by a formula, which generally takes years of service and salary into consideration but which is not correlated with the amount of contribution made by the individual employee. Under a defined-contribution plan each participant has a separate account, and the benefit earned by the employee is based on the balance in his or her account. (Kalcheim & Shapiro, Retirement Plans Upon Dissolution of Marriage Under the Retirement Equity Act of 1984, 73 Ill.B.J. 600, 605 (1985).) It is undisputed that the plan at bar is structured so that Robert's yearly pension at retirement will amount to a percentage of his salary, and the percentage will be determined by a formula based upon Robert's highest three years of salary and the number of years of his employment.
Robert testified that he has contributed $52,360 to the CSRS since he began working for the Federal civil service system in 1965. At the time of trial, September of 1992, Robert's salary was $65,500, and he was 48 years old. He testified on September 9, 1992, that if he retired that day he could not collect any benefits until age 62, but his benefit would be fixed at $30,248 per year beginning at age 62. The earliest Robert could retire and collect an immediate benefit would be at age 55, because he would have 30 years of service in the system. With retirement at age 55 Robert's benefits would be greater than $30,248 per year because his highest three years of salary and the number of years of service would be greater. If Robert retires at age 62, he will have 40 years of service invested in the system and his benefits would be further increased.
Frank Spreng, a college faculty member with a doctorate in economics, testified that Robert's attorney asked him to determine the value of Robert's pension and to ascertain a method of partitioning the asset. Spreng testified that there is no connection between the amount Robert contributes to the pension and the actual dollar amount he will receive. Benefits are determined by calculating Robert's length of employment in the system and the average of the three highest years of salary earned.
Using the date of trial, September 9, 1992, as a reference point, Spreng used the following table to illustrate his calculations:
Average of High Three Years' Salary $60,315
times: Pension Percentage .5015
Annual Amount of Pension When
Mr. Blackston is Age 62 $30,248
times: Percentage for Mrs. Blackston .44
Mrs. Blackston's Annual Amount $13.309
Mrs. Blackston's Monthly Amount
Beginning on 11/13/05 ...