## Facts

- Giles Coulter Berry and Elna Hettie Berry married on November 11, 1939; Giles began work at Southwestern Bell on May 22, 1940.
- The parties divorced on September 13, 1966; the divorce decree did not address retirement benefits.
- Giles continued working until retiring on July 8, 1978 under a non-contributory defined-benefit pension tied to years of service and highest-paid consecutive 60-month salary period.
- At divorce, Giles was not yet eligible to retire (not age 60); a benefits manager testified that if he hypothetically could have retired at divorce, his pension would have been $221.21 per month.
- At the time of suit, Giles was receiving $946.34 per month, largely reflecting post-divorce service and higher late-career earnings.
- The trial court awarded Elna $110.60 per month (one-half of the hypothetical $221.21) plus $3,207.40 in arrears calculated on that amount.
- The court of appeals reversed and awarded Elna 34.21% of the actual pension payments (½ × 26/38 years married during employment), including $6,702.20 accrued benefits and the same percentage going forward.
- The Supreme Court of Texas granted review.

## Issues

1. In dividing community property, how should a court value the community interest in a defined-benefit pension not divided in the divorce decree: by the benefit hypothetically payable at divorce or by the benefit actually paid at later retirement (including post-divorce increases)?

## Decision

- The Supreme Court of Texas reversed the court of appeals and affirmed the trial court.
- The community interest had to be valued as of the date of divorce.
- Elna was entitled to one-half of the pension value attributable to the marriage, measured by the hypothetical benefit as if the plan were vested and matured and Giles retired on the divorce date.
- Awarding a fixed percentage of the later, larger pension would improperly allocate post-divorce enhancements to the community estate.

## Legal Principles

- Retirement benefits earned during marriage are community property; increases attributable to post-divorce labor, earnings, and plan changes are separate property.
- The community’s share in a defined-benefit plan is determined by apportionment based on service during marriage, but when valuation is disputed the benefit is valued at divorce, not at retirement.
- A proper valuation method may calculate the benefit “as if” the employee spouse retired on the divorce date with the plan treated as vested and matured, to prevent shifting post-divorce enhancements to the former spouse.

## Conclusion

The court held that the community property interest in a defined-benefit pension is fixed and valued at the time of divorce using a hypothetical matured benefit, so the non-employee former spouse cannot share in post-divorce increases arising from the employee spouse’s later service and higher compensation.


Berry v. Berry, 647 S.W.2d 945 (Tex. 1983)