[This decision has been published in Ohio Official Reports at
95 Ohio St.3d 396.]
MACKEY, APPELLEE, v. MACKEY, APPELLANT.
[Cite as Mackey v. Mackey, 2002-Ohio-2429.]
Domestic relations—Divorce—Spousal support—Benefits received by a member of
the military under the Voluntary Separation Incentive program qualify as
marital property under R.C. 3105.171 and as such are divisible upon
divorce.
(No. 2001-0404—Submitted March 12, 2002—Decided June 5, 2002.)
Appeal from the Court of Appeals for Summit County, No. 20010.
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SYLLABUS OF THE COURT
Benefits received by a member of the military under the VSI program qualify as
marital property under R.C. 3105.171 and as such are divisible upon
divorce.
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ALICE ROBIE RESNICK, J.
{¶1} On January 30, 1989, Randy and Caroline Mackey were married in
England. At the time of the marriage, Randy (“appellee”) was a member of the
United States Air Force and had been enlisted since 1977. During the marriage,
Caroline (“appellant”), an English citizen, was employed as a secretary.
{¶2} Two children were born during this marriage, and in order to provide
a more stable home environment for his family, appellee decided to leave the Air
Force in June 1992, after he was offered a buyout plan designated as Voluntary
Separation Incentive (“VSI”). Based on the terms of his VSI, appellee was to
receive an annual pension of $6,566.76 payable for twenty-nine years. After
accepting the buyout, appellee and his family moved to Akron, Ohio.
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{¶3} In February 1999, in granting the parties a divorce, the trial court
determined that “the period ‘during the marriage’ is from January 30, 1989 to
August 18, 1998” and that “[appellee] was in the military for a total of 175 months
of which forty-two (42) months occurred during the marriage.” The trial court went
on to conclude that appellee’s VSI benefits were similar to a pension plan, thus
making 24 percent of this pension subject to division as marital property.
{¶4} The appellate court reversed the decision of the trial court, holding that
the court erred as a matter of law by determining appellee’s VSI benefits to be
marital property. This cause is now before the court on the allowance of a
discretionary appeal.
{¶5} The issue before us is whether VSI benefits are marital property under
R.C. 3105.171. We conclude that benefits received by a member of the military
under the VSI program qualify as marital property under R.C. 3105.171 and as such
are divisible upon divorce.
{¶6} In 1991, Congress enacted the Special Separation Benefits Programs
(“SSB”) and the VSI program in an attempt to effectuate and expedite the
downsizing of the United States’ military membership. Pub.L. No. 102-190,
Sections 661-664,
105 Stat. 1290, 1394-1399, Sections 1174a and 1175, Title 10,
U.S.Code. Both of these programs are voluntary actions that require the service
member’s affirmative request and application to participate. Sections 1174a(f) and
1175(d), Title 10, U.S.Code. Under these programs, a qualifying member receives
benefits based on that member’s salary at the time of separation and years of
service. Sections 1174a(b) and 1175(e)(1).
{¶7} The primary difference between the two programs is that the SSB
provides the participant with one lump-sum payment, while the VSI provides the
participant with an annuity. Id. Not only are these programs based on years of
service and rate of pay, as is retirement pay, but if a service member who has
received a VSI or SSB payment thereafter reenlists and qualifies for retirement, the
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January Term, 2002
incentive payment must be recouped from the retirement benefit to which that
member becomes entitled. Sections 1174a(g) and 1175(e)(3).
{¶8} Prior to the advent of these programs, Congress passed the Uniformed
Services Former Spouses’ Protection Act (“USFSPA”) in 1982. P.L. No. 97-252,
96 Stat. 730. The Act states: “Subject to the limitations of this section, a court may
treat disposable retired pay payable to a member … either as property solely of
the member or as property of the member and his spouse in accordance with the
law of the jurisdiction of such court.” Section 1408(c)(1), Title 10, U.S.Code.
Although the USFSPA does not specifically address the divisibility of VSI benefits,
equitable division of these benefits is not inconsistent with congressional intent.
See Kelson v. Kelson (Fla.1996),
675 So.2d 1370, 1373. In relation to the
congressionally mandated reduction in personnel that prompted the creation of the
VSI and SSB programs, the House Committee on Armed Services recommended
“a comprehensive package of transition benefits to assist separating personnel and
their families.” (Emphasis added.) H.R.Rep. No. 101-665, 101st Cong.2d Session,
reprinted in 1990 U.S.Code Cong. & Admin. News, 2931, 2962.
{¶9} Accordingly, the USFSPA gives state courts the authority to equitably
divide disposable retirement pay consistent with the laws of a particular
jurisdiction. This conclusion is further supported by Mansell v. Mansell (1989),
490 U.S. 581, 587,
109 S.Ct. 2023,
104 L.Ed.2d 675, in which the Supreme Court
noted that “[b]ecause domestic relations are preeminently matters of state law, we
have consistently recognized that Congress, when it passes general legislation,
rarely intends to displace state authority in this area.” Thus, we now turn to Ohio
law on this particular matter.
{¶10} R.C. 3105.171(A)(3)(a) states:
{¶11} “ ‘Marital property’ means:
{¶12} “(i) All real and personal property that currently is owned by either
or both of the spouses, including, but not limited to, the retirement benefits of the
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spouses, and that was acquired by either or both of the spouses during the
marriage;
{¶13} “(ii) All interest that either or both of the spouses currently has in any
real or personal property, including, but not limited to, the retirement benefits of
the spouses, and that was acquired by either or both of the spouses during the
marriage.” (Emphasis added.)
{¶14} In Holcomb v. Holcomb (1989), 44 Ohio St.3d 128,
541 N.E.2d 597,
syllabus, this court held, “A vested pension plan accumulated during marriage is a
marital asset and must be considered … in dividing marital assets and liabilities
to ensure that the result reached is equitable.” The question remains, then, whether
VSI payments are appropriately categorized as retirement benefits.
{¶15} Several jurisdictions have considered this issue and concluded that
VSI and SSB benefits qualify as retirement benefits and are therefore divisible as
marital property.
{¶16} In In re Marriage of Heupel (Colo.1997), 936 P.2d 561, the Colorado
Supreme Court was asked to consider “whether DuWayne P. Heupel’s lump sum
payment, received from the United States Air Force under the Special Separation
Benefit (SSB) program …, should be treated as retired pay for purposes of
equitable distribution under the separation agreement of his dissolution decree.”
Id.
at 562.
{¶17} The parties in Heupel were married for seventeen years, and at the
time of the dissolution, the husband had fifteen years of service with the United
States Air Force. The separation agreement provided that the wife would receive
one-half of the husband’s military benefits once he retired; the husband, however,
opted to receive an SSB settlement before becoming eligible for retirement. Id. at
562-563.
{¶18} The court concluded, “[W]e hold that funds paid out under the SSB
and VSI programs are accorded the same status as retired pay and that,
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January Term, 2002
consequently, state distribution laws are not pre-empted.” Id. at 568. The court
reasoned that “unilateral control to transform marital property into separate
property could inappropriately sway a service member’s decision to opt for the SSB
or VSI program. This would have the undesirable consequence of divesting the
nonemployee spouse of a valuable marital asset.”
Id. at 569.
{¶19} In the case at bar, appellee opted to accept the VSI from the Air Force
before he became eligible to receive his retirement benefits. Appellee admitted at
trial that his decision to take the VSI was based on his desire to have his children
attend school in one location “rather than continue my career in the Air Force and
bounce from station to station.” Comparable to the manner in which retirement pay
is calculated, appellee’s VSI annuity was based on his years of service and rate of
pay at the time of his separation from the military. The trial court correctly found
that a portion of appellee’s VSI was accrued during the time the parties were
married. Therefore, it is only reasonable that the portion of benefits earned during
the marriage would be divisible between the parties upon divorce.
{¶20} In Kelson, 675 So.2d 1370, the Florida Supreme Court was asked to
consider whether “Voluntary Separation Incentive benefits paid to a service
member upon voluntary separation from the armed forces qualify as military
retirement pay.”
Id. at 1370.
{¶21} The court reasoned that “VSI benefits are sufficiently similar to
retired pay to allow for enforcement of the settlement agreement at issue here.” Id.
at 1371.
{¶22} Similarly, in In re Marriage of Blair (1995), 271 Mont. 196, 201,
894
P.2d 958, the court stated that “[w]e characterize separation pay received under the
Special Separation Benefits program (10 U.S.C. § 1174a) as an election for early
retirement.
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{¶23} “We hold that payments received by a member of the military under
the Special Separation Benefits program are an item of marital property subject to
division by the dissolution court.”
{¶24} Likewise, in Fisher v. Fisher (S.C.App.1995), 319 S.C. 500, 504,
462
S.E.2d 303, 305, the court concluded: “[T]he husband’s early discharge under the
VSI program is analogous to an early retirement. … [A]ny rights the husband
now possesses to receive early discharge incentive payments are due to the time he
spent in the military and accrued during his marriage to the wife, not after the
separation agreement was approved.”
{¶25} Accordingly, based on the case law and the original purpose of the
VSI program, we hold today that benefits received by a member of the military
under the VSI program qualify as marital property under R.C. 3105.171 and as such
are divisible upon divorce. Therefore, the decision of the court of appeals is
reversed and the judgment of the trial court is reinstated.
Judgment reversed.
MOYER, C.J., DOUGLAS, F.E. SWEENEY and PFEIFER, JJ., concur.
COOK and LUNDBERG STRATTON, JJ., concur in part and dissent in part.
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COOK, J., concurring in part and dissenting in part.
{¶26} Because benefits received under the VSI program are akin to pension
benefits, they are subject to a marital-property division to the extent accumulated
or acquired during the marriage. I therefore agree with the majority’s decision to
reverse the judgment of the court of appeals. Instead of reinstating the trial court’s
judgment, however, we should remand this cause to the court of appeals for
consideration of Mr. Mackey’s assignment of error challenging the trial court’s
valuation of the marital portion of the VSI benefits. Because the court of appeals
ruled that the VSI benefits were Mr. Mackey’s separate property, it held his
valuation arguments to be moot. By simply reinstating the trial court’s judgment,
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January Term, 2002
the majority has deprived Mr. Mackey of appellate review of the trial court’s
valuation ruling.
Lundberg Stratton, J., concurs in the foregoing opinion.
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Community Legal Aid Services, Inc. and Susan M. Fitch, for appellant.
Morganstern, MacAdams & DeVito Co., L.P.A., and Michael A. Partlow
for appellee.
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