THE SENATE

S.B. NO.

1324

TWENTY-EIGHTH LEGISLATURE, 2015

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to divorce.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that section 88-91, Hawaii Revised Statutes, as currently written and as interpreted by Attorney General Opinion 79-3, prohibits the direct payment of a former spouse's share of an employees' retirement system member's retirement benefits by the employees' retirement system administrator.  In many cases, this leads to a former spouse not receiving a court ordered portion of the member's retirement benefits as part of a property division in a finalized divorce.  This situation can also create a burden on the member having to comply with a court order as the member is required to write monthly checks to the former spouse.  Moreover, the inability of a former spouse to receive direct payment from the employees' retirement system administrator may result in the member retiree bearing all of the tax liability on the tax benefits, even if the member retiree is obligated to pay a portion of the benefits to the former spouse.

     The purpose of this Act is to create statutory authority for the employees' retirement system administrator to make direct payment to the former spouse of a member who has been awarded a portion of the member's retirement benefits as part of a property division adjudicated, ordered, or decreed by a family court in a divorce proceeding.

     SECTION 2.  Chapter 571, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§571-    Property division, employees retirement system.  For the purpose of division of property in actions for divorce, the court may order the assignment and direct payment of all or a portion of any benefits payable by the employees' retirement system established under chapter 88 to a non-member former spouse, in accordance with sections 88-91 and 580-47(f)."

     SECTION 3.  Section 88-91, Hawaii Revised Statutes, is amended to read as follows:

     "§88-91  Exemption from taxation and execution.  (a)  The right of a person to a pension, an annuity or a retirement allowance, to the return of contributions, the pension, annuity or retirement allowance itself, any optional benefit or death benefit, any other right accrued or accruing to any person under this part and the moneys in the various funds created under this part are exempted from any tax of the State and, except as in section 88-92 provided, shall not be subject to execution, garnishment or any other process and shall be unassignable except as in this part specifically provided.

     (b)  Subsection (a) notwithstanding, if a final judgment, order, or decree in a divorce action awards the non-member former spouse a portion of the member's pension, annuity, or retirement allowance, that portion shall be paid directly to the non-member former spouse; provided that the judgment, order, or decree:

     (1)  Identifies the member and non-member former spouse by name and address;

     (2)  Directs the administrator to make payment of the non-member former spouse's share directly to the non-member former spouse;

     (3)  Clearly identifies the portion awarded to the non-member former spouse;

     (4)  Requires that each party shall be taxed on the share of the retirement benefit received; and

     (5)  States that the assignment of benefits does not:

         (A)  Require the administrator to provide any type or form of benefit, or any option, not otherwise provided under the judgment, decree, or order;

         (B)  Require the administrator to provide increased benefits, determined on the basis of actuarial value; or

         (C)  Require the administrator to provide benefits to the non-member former spouse that are required to be paid to another former spouse pursuant to a valid judgment, decree, or order."

     SECTION 4.  Section 88-93, Hawaii Revised Statutes, is amended to read as follows:

     "§88-93  Named beneficiaries by members and by former employees; effect of marriage, entry into reciprocal beneficiary relationship, divorce, termination of reciprocal beneficiary relationship, or death[.]; award in divorce.  (a)  All written designations of beneficiaries for members and for former employees shall become [null and] void when:

     (1)  The beneficiary predeceases the member or former employee;

     (2)  The member or former employee is divorced from the beneficiary;

     (3)  The member or former employee is unmarried, and subsequently marries; or

     (4)  The member or former employee enters into or terminates a reciprocal beneficiary relationship.

Any of the above events shall operate as a complete revocation of the designation and, except as provided in sections 88-84(b) and 88-338(b) all benefits payable by reason of the death of the member or former employee shall be payable to the member's or former employee's estate unless, after the death, divorce or marriage, or entry into or termination of reciprocal beneficiary relationship, the member or former employee makes other provision in a written designation duly executed and filed with the board.

     (b)  Subsection (a) notwithstanding, when a final judgment, order, or decree in a divorce action awards a non-member former spouse a portion of a member or former employee's pension, annuity, or retirement allowance, that portion shall be paid directly to the non-member former spouse, in accordance with sections 88-91 and 580-47(f).

     [(b)] (c)  Subsection (a) shall not apply to active members who are former retirants who have returned to service.  The beneficiaries of retirants who return to service may not be changed except to the extent provided under the retirement allowance option selected by the former retirant when the former retirant first retired."

     SECTION 5.  Section 580-47, Hawaii Revised Statutes, is amended to read as follows:

     "§580-47  Support orders; division of property.  (a)  Upon granting a divorce, or thereafter if, in addition to the powers granted in subsections (c) and (d), jurisdiction of those matters is reserved under the decree by agreement of both parties or by order of court after finding that good cause exists, the court may make any further orders as shall appear just and equitable (1) compelling the parties or either of them to provide for the support, maintenance, and education of the children of the parties; (2) compelling either party to provide for the support and maintenance of the other party; (3) finally dividing and distributing the estate of the parties, real, personal, or mixed, whether community, joint, or separate; and (4) allocating, as between the parties, the responsibility for the payment of the debts of the parties whether community, joint, or separate, and the attorney's fees, costs, and expenses incurred by each party by reason of the divorce.  In making these further orders, the court shall take into consideration:  the respective merits of the parties, the relative abilities of the parties, the condition in which each party will be left by the divorce, the burdens imposed upon either party for the benefit of the children of the parties, the concealment of or failure to disclose income or an asset, or violation of a restraining order issued under section 580-10(a) or (b), if any, by either party, and all other circumstances of the case.  In establishing the amounts of child support, the court shall use the guidelines established under section 576D-7.  Provision may be made for the support, maintenance, and education of an adult or minor child and for the support, maintenance, and education of an incompetent adult child whether or not the petition is made before or after the child has attained the age of majority.  In those cases where child support payments are to continue due to the adult child's pursuance of education, the agency, three months prior to the adult child's nineteenth birthday, shall send notice by regular mail to the adult child and the custodial parent that prospective child support will be suspended unless proof is provided by the custodial parent or adult child to the child support enforcement agency, prior to the child's nineteenth birthday, that the child is presently enrolled as a full-time student in school or has been accepted into and plans to attend as a full-time student for the next semester a post-high school university, college, or vocational school.  If the custodial parent or adult child fails to do so, prospective child support payments may be automatically suspended by the child support enforcement agency, hearings officer, or court upon the child reaching the age of nineteen years.  In addition, if applicable, the agency, hearings officer, or court may issue an order terminating existing assignments against the responsible parent's income and income assignment orders.

     In addition to any other relevant factors considered, the court, in ordering spousal support and maintenance, shall consider the following factors:

     (1)  Financial resources of the parties;

     (2)  Ability of the party seeking support and maintenance to meet his or her needs independently;

     (3)  Duration of the marriage;

     (4)  Standard of living established during the marriage;

     (5)  Age of the parties;

     (6)  Physical and emotional condition of the parties;

     (7)  Usual occupation of the parties during the marriage;

     (8)  Vocational skills and employability of the party seeking support and maintenance;

     (9)  Needs of the parties;

    (10)  Custodial and child support responsibilities;

    (11)  Ability of the party from whom support and maintenance is sought to meet his or her own needs while meeting the needs of the party seeking support and maintenance;

    (12)  Other factors which measure the financial condition in which the parties will be left as the result of the action under which the determination of maintenance is made; and

    (13)  Probable duration of the need of the party seeking support and maintenance.

     The court may order support and maintenance to a party for an indefinite period or until further order of the court; provided that in the event the court determines that support and maintenance shall be ordered for a specific duration wholly or partly based on competent evidence as to the amount of time which will be required for the party seeking support and maintenance to secure adequate training, education, skills, or other qualifications necessary to qualify for appropriate employment, whether intended to qualify the party for a new occupation, update or expand existing qualification, or otherwise enable or enhance the employability of the party, the court shall order support and maintenance for a period sufficient to allow completion of the training, education, skills, or other activity, and shall allow, in addition, sufficient time for the party to secure appropriate employment.

     (b)  An order as to the custody, management, and division of property and as to the payment of debts and the attorney's fees, costs and expenses incurred in the divorce shall be final and conclusive as to both parties subject only to appeal as in civil cases.  The court shall at all times, including during the pendency of any appeal, have the power to grant any and all orders that may be necessary to protect and provide for the support and maintenance of the parties and any children of the parties to secure justice, to compel either party to advance reasonable amounts for the expenses of the appeal including attorney's fees to be incurred by the other party, and to amend and revise such orders from time to time.

     (c)  No order entered under the authority of subsection (a) or entered thereafter revising so much of such an order as provides for the support, maintenance, and education of the children of the parties shall impair the power of the court from time to time to revise its orders providing for the support, maintenance, and education of the children of the parties upon a showing of a change in the circumstances of either party or any child of the parties since the entry of any prior order relating to the support, maintenance, and education.  The establishment of the guidelines or the adoption of any modifications made to the guidelines set forth in section 576D-7 may constitute a change in circumstances sufficient to permit review of the support order.  A material change of circumstances will be presumed if support as calculated pursuant to the guidelines is either ten per cent greater or less than the support amount in the outstanding support order.  The need to provide for the child's health care needs through health insurance or other means shall be a basis for petitioning for a modification of the support order.  The most current guidelines shall be used to calculate the amount of the child support obligation.

     (d)  Upon the motion of either party supported by an affidavit setting forth in particular a material change in the physical or financial circumstances of either party, or upon a showing of other good cause, the moving party, in the discretion of the court, and upon adequate notice to the other party, may be granted a hearing.  The fact that the moving party is in default or arrears in the performance of any act or payment of any sums theretofore ordered to be done or paid by the party shall not necessarily constitute a bar to the granting of the hearing.  The court, upon such hearing, for good cause shown may amend or revise any order and shall consider all proper circumstances in determining the amount of the allowance, if any, which shall thereafter be ordered.

     (e)  The responsible parent or the custodial parent shall have a right to petition the family court or the child support enforcement agency not more than once every three years for review and adjustment of the child support order without having to show a change in circumstances.  The responsible or custodial parent shall not be precluded from petitioning the family court or the child support enforcement agency for review and adjustment more than once in any three-year period if the second or subsequent request is supported by proof of a substantial or material change of circumstances.

     (f)  In dividing and distributing the estate of the parties in a divorce action, in accordance with section 88-91, the court may require that a non-member party receive direct payment from the employees' retirement system of all or a portion of the benefits payable to a member or former employee.

     [(f)] (g)  Attorney's fees and costs.  The court hearing any motion for orders either revising an order for the custody, support, maintenance, and education of the children of the parties, or an order for the support and maintenance of one party by the other, or a motion for an order to enforce any such order or any order made under subsection (a) [of this section], may make such orders requiring either party to pay or contribute to the payment of the attorney's fees, costs, and expenses of the other party relating to such motion and hearing as shall appear just and equitable after consideration of the respective merits of the parties, the relative abilities of the parties, the economic condition of each party at the time of the hearing, the burdens imposed upon either party for the benefit of the children of the parties, the concealment of or failure to disclose income or an asset, or violation of a restraining order issued under section 580-10(a) or (b), if any, by either party, and all other circumstances of the case."

     SECTION 6.  The board of trustees of the employees' retirement system shall adopt rules in accordance with chapter 91, Hawaii Revised Statutes, and produce such forms as necessary to effectuate this Act.

     SECTION 7.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 8.  This Act shall take effect on January 1, 2017.

 

INTRODUCED BY:

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Report Title:

Employees' Retirement System Benefits; Direct Payment to Former Spouse; Divorce

 

Description:

Provides statutory authority for the employees' retirement system administrator to make direct payment to a former spouse of a member of benefits or portion thereof pursuant to valid court judgment, order, or decree.  Takes effect on 1/1/2017.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.