Prior to Division of Teacher Retirement Court Must Consider the Effect of Social Security Contributions or Offsets: Ky Court of Appeals Publsihed Opinion


In a previous related case, the Supreme Court held that Husband’s Kentucky teacher’s retirement account was considered marital property under KRS 403.190(1). Shown v. Shown, 233 S.W.3d 718 (Ky. 2007). Subsequently, the trial court divided the marital portion of husband’s retirement without consideration of the complex financial calculations used to make the distribution. In fact, the court took no proof on the issue and granted wife 50% of the marital portion of the account. Husband appealed arguing it was inequitable for the trial court to divide his teacher’s retirement account without considering its unique characteristics, primarily the fact that his teacher’s retirement is a substitution for social security. The Appellate Court agreed, reversing and remanding the matter to the trial court so that it can exercise its KRS 403.190 discretion and take expert testimony to “compute the present value of a Social Security benefit that Robert would have received had he contributed to Social Security. That value should be deducted from the present value of Robert’s teachers’ retirement, prior to division of the parties’ pension plans.”

Digested by Elizabeth M. Howell

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