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The Court of Appeals in DeLuca; 736
N.Y.S.2d 651, established that the Variable Supplement Fund
(VSF) is marital property divisible upon divorce. The
following issue was not addressed in the DeLuca decision:
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For an Alternate Payee to receive all or a
portion of the marital part of the VSF, is it required
that specific language appear in the divorce decree
awarding an Alternate Payee his or her interest in this
pension benefit? |
Absent such clear assignment language in
the divorce instrument does an Alternate Payee lose his or her
entitlement to the VSF? The answer is found at Pagliaro; 821
N.Y.S.2d 602. The Pagliaro court opined as follows:
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…It was not necessary for the Agreement to
specifically provide for the plaintiff to receive an
equitable share of the VSF benefits…, they were merely
supplements to the existing pension asset… |
Based on the DeLuca and Pagliaro decisions the practitioner will
now observe that
Absent language in the decree of divorce to the contrary an
Alternate Payee has an enforceable right to a portion of the
marital part of the VSF.
The absence of specific language in the divorce decree regarding
an assignment of the VSF portion of the pension to a Former
Spouse is not a bar to his or her entitlement to this asset.
Caveat:
Our concern is that practitioners representing the
titled-spouse and who are unfamiliar with Pagliaro may assume
that the omission of language in a decree of divorce regarding
the VSF portion of the pension is an effective tool to bar an
Alternate Payee's entitlement to the VSF pension benefit.
Suggested Procedure:
In a manner consistent with the intent of the parties,
specifically, recognize the relative rights of the spouses in
both the traditional pension and the VSF.
To the extent the parties have agreed to a division of the
pension, the VSF should be similarly divided. Absent from the
language relevant to the assignment of VSF benefits will be
survivor benefits since all payments end upon the death of the
retiree.
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