GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 1991
CHAPTER 960
The General Assembly of North Carolina enacts:
Section 1. G.S. 50-20(b) reads as rewritten:
"(b) For purposes of this section:
(1) 'Marital property' means all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned, except property determined to be separate property in accordance with subdivision (2) of this section. Marital property includes all vested pension, retirement, and other deferred compensation rights, including military pensions eligible under the federal Uniformed Services Former Spouses' Protection Act.
(2) 'Separate property' means all real and personal property acquired by a spouse before marriage or acquired by a spouse by bequest, devise, descent, or gift during the course of the marriage. However, property acquired by gift from the other spouse during the course of the marriage shall be considered separate property only if such an intention is stated in the conveyance. Property acquired in exchange for separate property shall remain separate property regardless of whether the title is in the name of the husband or wife or both and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance. The increase in value of separate property and the income derived from separate property shall be considered separate property. All professional licenses and business licenses which would terminate on transfer shall be considered separate property. The expectation of nonvested pension, retirement, or other deferred compensation rights shall be considered separate property.
(3) 'Distributive award' means payments that are payable either in a lump sum or over a period of time in fixed amounts, but shall not include alimony payments or other similar payments for support and maintenance which are treated as ordinary income to the recipient under the Internal Revenue Code.
The distributive award of vested pension, retirement, and other deferred compensation benefits may be made payable:
a. As a lump sum by agreement;
b. Over a period of time in fixed amounts by agreement;
c. As a prorated portion of the benefits made to the designated recipient at the time the party against whom the award is made actually begins to receive the benefits; or
d. By awarding a larger portion of other assets to the party not receiving the benefits, and a smaller share of other assets to the party entitled to receive the benefits.
Notwithstanding the foregoing, the
court shall not require the administrator of the fund or plan involved to make
any payments until the party against whom the award is made actually begins to
receive the benefits. benefits unless a plan under the Employee
Retirement Income Security Act (ERISA) permits earlier distribution. The
award shall be determined using the proportion of time the marriage existed,
(up to the date of separation of the parties), simultaneously with the
employment which earned the vested pension, retirement, or deferred
compensation benefit, to the total amount of time of employment. The
award shall be based on the vested accrued benefit, as provided by the plan or
fund, calculated as of the date of separation, and shall not include
contributions, years of service or compensation which may accrue after the date
of separation. The award shall include gains and losses on the prorated
portion of the benefit vested at the date of separation. No award shall
exceed fifty percent (50%) of the benefits the person against whom the award is
made is entitled to receive as vested pension, retirement, or other deferred
compensation benefits. benefits, except that an award may exceed
fifty percent (50%) if (i) other assets subject to equitable distribution are
insufficient; or (ii) there is difficulty in distributing any asset or any
interest in a business, corporation, or profession; or (iii) it is economically
desirable for one party to retain an asset or interest that is intact and free
from any claim or interference by the other party; or (iv) more than one
pension or retirement system or deferred compensation plan or fund is involved,
but the benefits awarded may not exceed fifty percent (50%) of the total benefits
of all the plans added together; or (v) both parties consent. In no event
shall an award exceed fifty percent (50%) if a plan prohibits an award in
excess of fifty percent (50%).
In the event the person receiving the
award dies, the unpaid balance, if any, of the award shall pass to the
beneficiaries of the recipient by will, if any, or by intestate succession. succession,
or by beneficiary designation with the plan consistent with the terms of the
plan unless the plan prohibits such a designation. In the event the
person against whom the award is made dies, the award to the recipient shall
remain payable to the extent permitted by the pension or retirement system or
deferred compensation plan or fund involved.
The Court may require distribution of the award by means of a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986. To facilitate the calculation and payment of distributive awards, the administrator of the system, plan or fund may be ordered to certify the total contributions, years of service, and pension, retirement, or other deferred compensation benefits payable.
The provisions of this section and G.S. 50-21 shall apply to all pension, retirement, and other deferred compensation plans and funds, including military pensions eligible under the Federal Uniform Services Former Spouses Protection Act, and including funds administered by the State pursuant to Articles 84 through 88 of Chapter 58 and Chapters 120, 127A, 128, 135, 143, 143B, and 147 of the General Statutes, to the extent of a member's accrued benefit at the date of separation, as determined by the court."
Sec. 2. This act becomes effective October 1, 1992, and applies to actions for equitable distribution pending or filed on or after that date.
In the General Assembly read three times and ratified this the 15th day of July, 1992.
Henson P. Barnes
President Pro Tempore of the Senate
Daniel Blue, Jr.
Speaker of the House of Representatives