Arnold v. Arnold, 967 So.2d 392 (2007): “For purposes of equitable distribution, each spouse has an interest in all retirement, annuity and deferred compensation benefits, including DROP accounts — or portions thereof — to which either spouse earns the right during the marriage. Such benefits are marital assets under section 61.075(5)(a), Florida Statutes (2006).”
Pursuant to the Florida Supreme Court’s ruling in Boyett v. Boyett, 703 So.2d 541 (Fla. 1997), post-dissolution contributions are excluded in the valuation of retirement plans that have already vested. The decision states as follows:
A DROP plan is an arrangement under which an employee who would otherwise be entitled to retire and receive benefits under an employer's defined benefit retirement plan instead continues working. However, instead of having the continued compensation and additional years of service taken into account for purposes of the defined benefit plan formula, the employee has a sum of money credited during each year of the continued employment to a separate account under the employer's retirement plan. The account earns interest (either at a rate stated in the plan, or based on the earnings of the trust underlying the retirement plan). The account is paid to the employee, in addition to whatever benefit the employee has acquired under the defined benefit plan based on earlier years of service, when the employee eventually retires.
In Arnold v. Arnold, 967 So.2d 392 (Fla. App. 1 Dist. 2007) the court ruled that benefits giving rise to rights in A DROP account could accrue during the marriage and therefore constituted marital assets, if not actually deposited into the subject account until after the marriage.
In Pullo v. Pullo, 926 So.2d 948 (Fla. App. 1 Dist. 2006), the court ruled: “payments into DROP are merely deferred retirement benefits from which, but for DROP participation, each former spouse would receive his or her pro-rata share immediately. Accordingly, the concession only established for the court what is well-known.”
Retirement assets are marital property, regardless of whether they are vested at the time of dissolution. § 61.075(5)(a)(4.) Fla. Stat. (2006).
For pensions, distribution is accomplished through a “deferred division of benefits on a fixed percentage basis. Deloach v. Deloach, 590 So.2d 956, 965 (Fla. 1st DCA 1991), disapproved other grounds, Boyett v. Boyett, 703 So.2d 451 (Fla. 1997). Distribution includes “all associated interest and cost of living adjustments.” Arnold v. Arnold, 967 So.2d 392 (Fla. App. 1 Dist. 2007)
In Deloach, the methodology is described as follows:
By: Marc A. Rapaport, Esq.; 2010, All Rights Are Reserved.