Legal Insights

The parties were formerly married. A marital dispute subsequently arose, and one spouse filed an action for divorce. The date on which the divorce action was filed was used as the reference date for calculating the remainder of the spouses’ marital property.

During the marriage, one spouse had worked for the same employer for a substantial period of time. Although that spouse remained employed and had not actually applied for retirement as of the reference date for calculating the marital property, the spouse had already accumulated considerable years of service.

The lower court held that because the spouse had not yet left employment or retired as of the reference date, the retirement benefits that had not yet actually been received should not be included in the spouse’s marital property.

The case was appealed to the Supreme Court. The Supreme Court found that the lower court’s approach was problematic and therefore reversed the relevant part of the judgment and remanded the case for further proceedings.

II. Issue

The principal issue in this case was:

Where, as of the reference date for calculating the remainder of the spouses’ marital property, one spouse has already satisfied the retirement requirements under the Labor Standards Act but continues to work and has not actually retired, should the retirement benefits that the spouse would already be entitled to claim based on his or her years of service as of that date be included in existing marital property?

The Supreme Court answered this question in the affirmative.

Importantly, the Supreme Court expressly noted that its previous decisions involving the same legal issue had adopted the opposite view. In this case, however, the issue was submitted through the Supreme Court’s internal consultation procedure, and the other civil divisions agreed with the affirmative position. The Supreme Court thereby unified its position on this legal issue.

III. The Supreme Court’s Reasoning

Under Article 1030-1 of the Taiwan Civil Code, when the statutory marital property regime terminates, the existing marital property of each spouse, after deducting debts incurred during the marriage, is calculated. If there is a difference between the respective remainders, the difference is, in principle, equally distributed between the spouses.

Under Article 1030-4 of the Civil Code, where the marriage is dissolved by a judgment of divorce, the value of the marital property is, in principle, calculated as of the date on which the divorce action was filed.

In addition, Article 53 of the Labor Standards Act provides that a worker who satisfies the statutory requirements concerning age and years of service may voluntarily retire.

The Supreme Court therefore held that if a worker has already satisfied the retirement requirements as of the reference date for calculating marital property, the worker has already acquired the right to claim retirement benefits. The fact that the worker chooses to remain employed and has not yet actually applied for retirement does not mean that the right does not exist.

In other words, “not yet retired” and “not yet entitled to retirement benefits” are two different matters.

Once the applicable retirement requirements have been satisfied, the retirement benefits accumulated on the basis of the worker’s years of service constitute property that can certainly be acquired in the future. Even before the benefits are actually claimed, the entitlement already has the nature of a property right. Accordingly, when calculating the remainder of the spouses’ marital property, such retirement benefits must also be taken into consideration.

IV. Analysis

The significance of this judgment is that the Supreme Court no longer treats the actual receipt of retirement benefits as the sole criterion for determining whether they should be included in the calculation of marital property.

Under the marital property distribution regime, retirement benefits also cannot be viewed exclusively from the perspective of the spouse who earned them through employment.

The amount of retirement benefits is generally connected to the accumulation of years of service. If one spouse has continuously worked throughout a marriage lasting twenty or thirty years, the other spouse may have undertaken household responsibilities, cared for the children, or otherwise contributed to maintaining the family, thereby enabling the working spouse to remain employed and continue accumulating years of service.

For this reason, the Supreme Court specifically emphasized that where the years of service underlying retirement benefits were accumulated during the marriage, the other spouse’s “cooperation and contribution” to the marital relationship cannot be disregarded. Even though retirement benefits may be personal to the employee to a certain extent, this does not automatically exclude them from the statutory marital property distribution regime.

This judgment, however, should not be interpreted to mean that all retirement benefits that a spouse may potentially receive in the future necessarily constitute marital property.

An important premise of this case is that the spouse had already satisfied the retirement requirements as of the reference date for calculating the remainder of the marital property. If the spouse had not yet satisfied those requirements and would become eligible only after continuing to work for several more years, whether and how such future retirement benefits should be included in marital property was not directly addressed by this judgment.

Accordingly, the principle established by this case is better understood as follows: whether retirement benefits have actually been received is not the sole consideration. More importantly, the court must determine whether the spouse had already acquired a vested right to the retirement benefits as of the reference date for calculating marital property.

V. Lawyer’s Perspective: Retirement Benefits Must Be Carefully Considered by Both Parties in Marital Property Litigation

In litigation concerning the distribution of the remainder of marital property, asset investigations commonly focus on real estate, bank accounts, stocks, investment funds, insurance policies, and other investments. These assets are the most readily identifiable and therefore frequently become the principal focus of disputes.

Following Supreme Court Civil Judgment No. 2397 of 2023, however, retirement benefits should also be treated as an important part of the marital property investigation.

This is particularly important in long-term marriages where one or both spouses have substantial employment histories. The parties should examine each spouse’s years of service as of the relevant reference date, the applicable retirement system, whether the statutory retirement requirements had already been satisfied, and the amount of retirement benefits that could have been claimed at that time.

The issue is equally important to both sides.

A spouse seeking distribution of the remainder of marital property should not investigate only the other spouse’s real estate, deposits, or stocks while overlooking retirement rights accumulated over many years. Conversely, if the claimant also has vested retirement rights, those rights may likewise have to be included in the calculation of that spouse’s marital property.

Therefore, marital property litigation should not be limited to assets that are currently visible or have already been paid into an account. Even where retirement benefits have not yet actually been received, they may materially affect the difference between the spouses’ respective marital property and the amount ultimately available for distribution if the retirement requirements had already been satisfied as of the relevant reference date.

For spouses with substantial employment histories who are approaching or have already reached retirement eligibility, the investigation and calculation of retirement benefits may directly affect the outcome of marital property litigation and should therefore form an important part of the overall litigation strategy.