Pensions in Divorce | The CA Brown Formula & the “Time Rule”

By | September 4, 2017

This article largely deals with pensions accrued during a marriage, and how they are divided by courts during a divorce. The Brown Formula & Time Rule refers to a famous court case heard by the California Supreme Court in 1976 involving the divorce of Gloria and Robert Brown. The case examined the question of a spouse’s pension and what portion is determined to be community property.

Like the famous Moore Marsden formula, which helps courts figure the value of community property involving real estate, the Brown Formula and the Time Rule are fairly complicated subjects, even by legal standards.

The purpose of this article is to generally discuss, in as simple a way as possible, the issues a couple might face when dividing certain parts of the marital property (legally known as “community’s property”). Chances are, if you make it to the end of this article, you’ll still have questions. If so, feel free to call our office.

Pension Marriage of Brown & the Time-Rule

The Marriage of Brown

One of the key issues examined by the State Supreme Court in the Marriage of Brown, focused on Robert’s pension plan with General Telephone Company.

Gloria and Robert were married for nearly 23 years. At the time the couple separated in 1973, Robert had not yet retired. A lower court accordingly ruled that he had not yet obtained a “vested” interest in the pension. In other words, this meant the pension was not community property.

Gloria appealed that portion of the decision and argued that the pension was in fact community property. The case made its way to the California Supreme Court, which agreed with Gloria.

The court argued that the pension represented deferred compensation for services rendered, and as such were a right of the employment contract. The court wrote:

“The joint effort that composes the community and the respective contributions of the spouses that make up its assets are the meaningful criteria. The wife’s contribution to the community is not one whit less if we declare the husband’s pension rights not a contingent asset but a mere expectancy. Fortunately we can appropriately reflect the realistic situation by recognizing the husband’s pension rights, contingency interest, whether vested or not vested, comprise a property interest of the community and that the wife may properly share in it.”

Clear as mud, right?

What is the Brown Rule? What is the Time Rule?

The Brown Rule and the Time Rule came into use following the State Supreme Court’s ruling on the Marriage of Brown. Though these terms are used interchangeably by the courts these days, this wasn’t always the case.

Initially, the Brown Rule referred to the way in which a pension is divided — either the court would retain jurisdiction as the pension benefits became payable or the court would order a “cash out” option, which would reduce the community interest to present value and provide payment to the nonemployee spouse.

The Time Rule popped up after the Brown Case in a divorce involving a man who collected his military pension after the divorce was finalized. The question was how to divide the money based on the years of military service that occurred during the marriage, and use that amount of time to figure the fairest way to divide the pension.

The court ruled that the division of the pension should be based on the number of years of military service during marriage, in relation to the number of years of service before marriage, and after separation.

An example of how the Time Rule would be applied might go as follows:

A man works 20 years at a company where he collects a pension. After five years of employment, he marries a woman and the two remain married for ten years. Under a very basic interpretation of the time rule, half of the man’s pension could be considered his separate property to which he alone is entitled, and the other half of the pension would be community property, to be split equally among the divorcing spouses.

It’s important to remember that this example is just a conceptual guide. The division of community property can be very complex, and different divorces will require different considerations depending on specific circumstances.

For example, one case, considered by the California Supreme Court in 1979, involved a couple who had been married for 27 years. The husband had served in the navy, both on active duty and in the reserve, for 40 years.

When the couple divorced, a lower court used the Time Rule to determine the wife’s portion of the husband’s naval pension. The husband appealed, seeking a reduction of the wife’s portion of the pension. The court examined the husband’s pension, which was not issued based on years of service, but rather a “points system.”

The higher court found that the trial court erred in its division of the pension arguing,

“the apportionment of retirement benefits between the separate and community property estates must be reasonable and fairly representative of the relative contributions of the community and separate estates.”

The high court ordered the case back to the lower court so that it could reconsider the couple’s respective interests in the pension. The point of sharing this case is to demonstrate the complexity of family law, particularly with regard to the division of community property. It shouldn’t be assumed that there is a one size fits all solution to the division of community property.

If Your Divorce Involves A Pension, Get a Lawyer

Whether you spent years of hard work earning a pension, or you spent many years married to a person who earned a pension, if you are now going through a divorce, you have a right to a portion of those earnings.

As this article has hopefully shown, figuring out the fairest way to divide a pension is a complicated matter. While courts will typically do their best to be fair, it is of vital importance that you have a strong advocate looking out for your best interests during the divorce process.

When it comes to the application of the Brown Formula and the Time Rule, a legal professional should be consulted in order to help you achieve the best results for you as you go through your separation and seek to move on with your life. If you are going through a divorce and are struggling with the division of a pension or other community property, contact our office to schedule a consultation. Learn how we can help you to fight for your fair share.


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