Pensions will be divided in divorces

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Pensions will be divided in divorces

The Supreme Court ruled yesterday that a pension or severance payment expected in the future should be included in the property to be divided when a married couple files for divorce, ending a 1995 precedent that ruled the opposite.

Since the law was revised in 1990, it has become common for divorcing couples to divide their property. Previously, assets accumulated during marriages were considered to belong to the spouse with economic power, usually husbands.

But retirement payments were excluded in the division because it was difficult to calculate how big they would be or whether the retiring spouse would encounter difficulties in getting the payment.

The suit yesterday was a divorce suit filed by a woman against her husband after 14 years of marriage. In the process of the trial, the husband requested a share of the plaintiff’s pension, claiming he had contributed to his wife’s career.

The Daejeon High Court, which handled the first appeal, followed the precedent of nearly 20 years ago and rejected the husband’s request, saying that a pension that is not fixed cannot be divided in case of divorce and should simply be considered as one factor when dividing assets in general.

The Supreme Court yesterday quashed the decision and referred the case back to the high court.

It explained that the issue was not particularly uncertain because most workers receive severance payments when leaving jobs; there is no clear standard of including it as a factor when couples divide assets; and that excluding severance payments in divorces for couples before retirement would be unfair compared to those who divorce after retirement.

The court added that pensions being paid at the time of divorce should be divided as well.

“Retirement pensions of government employees is like deferred payment for duties performed during marriages,” said the court yesterday. “An asset jointly contributed to by husband and wife can’t be excluded just because they don’t know the exact amount.”

The plaintiff in the case ruled upon yesterday was a teacher, a government employee.

Analysts said the Supreme Court took into consideration the increasing value of retirement payments in Korea’s aging society. The rate of so-called twilight divorces, or breakups of couples that have been married 20 years or longer, was 28.1 percent last year, up from 22.8 percent in 2009. The rate is expected to rise with Korea’s life expectancy.

The life expectancy of Koreans in 2012 stood at 81.2 years.

Other analysts say the ruling reflects a recent trend to make divorces more fair for women. According to a dissertation last year on divorces, cases in which women took more than 50 percent of the assets accounted for 22.5 percent, up from 5.4 percent in 1998.

“As society changes, the judicial branch recently set a series of precedents, including retirement payments as property to be divided, and it resulted in the decision of the Supreme Court,” said Choi Myung-ho of the law firm Shin & Kim.

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