## Facts

- Timothy Green served in the U.S. Air Force from 1982 to 1986, before marrying Julie Green.
- In 1989, Timothy became a firefighter covered by CalPERS and gained a statutory right to purchase up to four years of CalPERS service credit based on his prior military service.
- The parties married in 1992.
- In 2002, during the marriage, Timothy purchased the full four years of additional service credit, paying in installments that included community funds.
- The additional service credit increased Timothy’s CalPERS retirement benefits as if he had been in covered employment during the credited period.
- In dissolution proceedings, the trial court treated the purchased credit as attributable to premarital service and ordered reimbursement to Julie of one-half of the community payments plus interest.
- The Court of Appeal reversed, concluding the purchased credit was community property because community funds were used to acquire it.
- The California Supreme Court granted review.

## Issues

1. Whether additional CalPERS service credit purchased during marriage, but based entirely on premarital military service, is community property because it was bought with community funds.
2. If the credit is separate property, what remedy the community receives for community funds used to obtain it.

## Decision

- The California Supreme Court reversed the Court of Appeal.
- The Court held the four years of additional CalPERS service credit were Timothy’s separate property because they were based on military service performed before marriage.
- The community’s interest was limited to reimbursement for community funds used to purchase the credit, plus interest or an appropriate return.
- The Court approved the trial court’s reimbursement-plus-interest approach as within its discretion and reinstated that method of compensation.

## Legal Principles

- Retirement benefits are characterized as community or separate property primarily by the marital status of the employee when the services generating the benefits were rendered.
- The timing of purchase, vesting, or receipt of retirement-related benefits does not control characterization when the benefit is attributable to premarital service.
- Community payments used to acquire or enhance a spouse’s separate-property retirement benefits generally create a community right to reimbursement (with interest or an appropriate return), not a community ownership share in the underlying separate asset.

## Conclusion

Purchased CalPERS service credit attributable solely to premarital military service remains the employee spouse’s separate property even if community funds were used to obtain it during marriage; the community is compensated through reimbursement plus interest for its contributions rather than receiving an ownership share of the enhanced retirement benefit.


In re Marriage of Green, 56 Cal. 4th 1130, 302 P.3d 562 (Cal. 2013)