WALKER VS. WALKER

Statutes cited

Key holdings

Practitioner summary

The court addressed two issues of first impression concerning the interaction of Nevada's retirement statutes with community property interests created by divorce decrees: (1) whether NRS 1A.450(1)(a) permits a JRS member to designate more than one Option 2 beneficiary, and (2) whether a former spouse's adjudicated interest in a PERS member's retirement benefits survives the member's transfer of accrued service credits to JRS under NRS 1A.280. Statutory interpretation is reviewed de novo. State v. Lucero, 127 Nev. 92, 95, 249 P.3d 1226, 1228 (2011). The court applies plain-meaning analysis, resorts to legislative history only on ambiguity, and reads statutes in harmony where possible. Smith v. Zilverberg, 137 Nev. 65, 72, 481 P.3d 1222, 1230 (2021); Orion Portfolio Servs. 2 LLC v. County of Clark ex rel. Univ. Med. Ctr. of S. Nev., 126 Nev. 397, 403, 245 P.3d 527, 531 (2010). NRS 1A.450(1)(a) describes Option 2 in the singular ("the beneficiary whom the justice or judge nominates"), but does not expressly prohibit multiple Option 2 designations. The court invoked NRS 0.030(1)'s default rule that the singular includes the plural unless context requires otherwise. Reading NRS 1A.450(1)(a) together with NRS 125.155(3) (preserving a former spouse's right to PERS/JRS benefits via agreement or court order), NRS 1A.520(3)-(4) (entitling an "alternate payee," including a former spouse with rights under a community property judgment, to receive benefits from the Judicial Retirement Plan), and NRS 1A.130(3) (providing that the member's choice of retirement plan does not affect the rights of any present or former spouse), the court concluded the statute permits more than one Option 2 beneficiary in circumstances such as those presented here. The court rejected PERS's amicus arguments. PERS's reliance on 26 U.S.C. § 401(a)(9)(E)(i) was unpersuasive because that provision defines a "designated beneficiary" without prohibiting multiple designations, and PERS offered no further support for its federal-tax-compliance contention. PERS's actuarial concerns likewise did not compel a single-beneficiary rule. The court reaffirmed that selection of Option 2 and the choice of beneficiary is a member-only decision made at retirement. NRS 1A.130(1)(a); NRS 1A.430 (notice to spouse, but no consent required). Awarding Latimer sole Option 2 status would constitute a windfall beyond the parties' agreement; allowing Walker to name only his current spouse would divest Latimer of her bargained-for interest. Both spouses, in their respective proportions, may be paid as Option 2 beneficiaries if the member predeceases them. On the second issue, the court applied contract principles. Settlement agreements in divorce are contracts. Grisham v. Grisham, 128 Nev. 679, 685, 289 P.3d 230, 234 (2012); courts effectuate the parties' intent in light of surrounding circumstances. NGA #2 Liab. Co. v. Rains, 113 Nev. 1151, 1158, 946 P.2d 163, 167 (1997). The QDRO awarded Latimer 50 percent of Walker's accrued retirement benefits as of June 1, 2001 and did not specifically reference PERS. Because Walker's transfer to JRS closed his PERS account, see PERS Bd. v. Smith, 129 Nev. 618, 626, 310 P.3d 560, 566 (2013), an award of 4.25 years of PERS credits awarded Latimer a share of a non-existent account. The court held that when a divorce decree provides a former spouse an interest in a PERS member's retirement account, a subsequent transfer to JRS does not extinguish that interest; the credits the former spouse was awarded must come from the JRS account into which they were transferred. The court also noted, citing Murphy v. Murphy, 64 Nev. 440, 445-46, 183 P.2d 632, 634-35 (1947), and Mizrachi v. Mizrachi, 132 Nev. 666, 673, 385 P.3d 982, 986 (Ct. App. 2016), that the district court's order effectuated rather than modified the MSA, rejecting Latimer's contrary argument. The court affirmed the determination that two Option 2 beneficiaries may be designated and reversed and remanded the portion of the order denying Latimer credits from the JRS account.

In plain language

Egan Walker and Laura Latimer divorced in 2002 after 13 years of marriage. During the marriage, Walker had worked as a deputy district attorney and earned about 8.54 years of credits in Nevada's Public Employees' Retirement System (PERS). As part of the divorce, the couple signed a marital settlement agreement that gave Latimer half of Walker's PERS retirement benefits accrued through June 1, 2001. To secure her share, the agreement called for a "qualified domestic relations order" (QDRO) - a court order recognized by retirement plans that directs how benefits are split. The QDRO required Walker to choose "Option 2" at retirement, which is a payment plan where the retiree gets a smaller monthly check during life so that, after death, a designated beneficiary continues receiving the same amount for life. After the divorce, Walker remarried, then later returned to public service as a court master and ultimately as a district court judge. When he became a judge, he had a one-time choice to keep his retirement benefits in PERS or move them into the Judicial Retirement System (JRS). He chose JRS and named his current wife as his beneficiary. Years later, when planning for retirement, Walker discovered that PERS and JRS had historically allowed only one person to be named as an Option 2 beneficiary. That created a problem: Latimer was contractually entitled to be an Option 2 beneficiary for her share, but Walker also wanted his current wife to be an Option 2 beneficiary for the rest. Walker asked the district court to sort it out. The district court agreed Walker could name both his ex-wife and current wife as Option 2 beneficiaries, but it also said Latimer was entitled only to 4.25 years of PERS credits and got nothing from the JRS account. The Nevada Supreme Court agreed with the district court that the relevant Nevada statute does not actually prohibit naming more than one Option 2 beneficiary. The court read the statute alongside other Nevada laws protecting a former spouse's interest in retirement benefits, and concluded that allowing two Option 2 beneficiaries best honors what the parties bargained for in the divorce: Latimer keeps her contracted-for share, and the current wife receives the rest. The court was not persuaded by PERS's arguments that federal tax law or actuarial complexity required a single-beneficiary rule. But the Supreme Court disagreed with the part of the order that gave Latimer credits in a PERS account that no longer exists. Because Walker had moved his PERS service credits into JRS, his old PERS account was closed, so awarding Latimer 4.25 years of credits in that closed account was, in the court's words, awarding her "a portion of nothing." The court held that when an ex-spouse has a protected interest in PERS retirement benefits and the member then transfers those benefits to JRS, the ex-spouse's interest follows the money into JRS. The case was sent back to the district court to fix that part of the order.