## Facts

- Rose Phillipson and Nicholas Phillipson were married for 22 years.
- Nicholas worked for the State of California from 1955 until he left state employment on April 1, 1966, and made required contributions to the Public Employees’ Retirement System (PERS).
- As of July 31, 1967, Nicholas’s accumulated PERS contributions plus interest totaled $4,532.66.
- Rose obtained an interlocutory decree of divorce on April 14, 1966, which awarded her, among other property, all state employee retirement system funds accrued to Nicholas’s credit from his state employment.
- The PERS Board of Administration refused to pay Rose, citing Government Code section 21201, which prohibits assignment or levy of pension rights.
- Rose filed an action for declaratory relief; the superior court entered judgment for the Board.
- Rose appealed to the California Supreme Court.

## Issues

1. Whether accumulated PERS contributions and matured benefits allocable to those contributions, earned during marriage, are community property subject to division in divorce.
2. Whether awarding the non-employee spouse the community’s interest in such retirement rights violates Government Code section 21201’s anti-assignment prohibition.
3. Whether a divorce court may control the form of retirement benefits when the employee has terminated state service but has not yet elected a benefit option.

## Decision

- The California Supreme Court reversed the judgment for the Board.
- The court held that accumulated PERS contributions and matured benefits allocable to those contributions earned during marriage are community property subject to division and award in divorce.
- The court held that awarding the community’s interest to the non-employee spouse is within the superior court’s power and does not violate Government Code section 21201.
- The court held that when a divorce decree is entered after the employee leaves state service but before an election of benefit form, the divorce court may require the benefits be cast in the form most useful to the community.
- The court upheld the divorce court’s award to Rose of the accumulated contributions credited to Nicholas’s PERS account.

## Legal Principles

- Retirement contributions and benefits earned during marriage are deferred compensation and constitute community property to the extent attributable to marital earnings.
- A dissolution court’s division and award of the spouses’ community property interests in retirement benefits is not an “assignment” barred by statutory anti-assignment provisions aimed at creditors.
- When benefit-form elections remain available at the time of dissolution, the dissolution court may direct benefit structuring to effectuate a practical division of the community interest.

## Conclusion

The court held that PERS contributions and related matured benefits earned during marriage are community property divisible at dissolution, and that enforcing a divorce decree awarding the non-employee spouse the community interest does not violate Government Code section 21201’s anti-assignment prohibition; the Board was required to honor the award to Rose Phillipson.


Phillipson v. Bd. of Admin., 3 Cal. 3d 32, 473 P.2d 765 (Cal. 1970)