Opinion
TOBRINER, J.Retiring after 26 years of military service, husband
received a “disability” pension of 75 percent of his basic pay in lieu of a “retirement” pension at 65 percent of basic pay.1 Although a military “retirement” pension is a community asset (In re Marriage of Fithian (1974) 10 Cal.3d 592, 604 [111 Cal.Rptr. 369, 517 P.2d 449]), husband claims that his entire “disability” pension is his separate property under our decision in In re Marriage of Jones, supra, 13 Cal.3d 457. Looking beneath the label of a “disability” pension, however, the trial court found that only the excess of the “disability” pension rights over the alternative “retirement” pension represented additional compensation attributable to husband’s disability; the balance of the pension rights acquired during the marriage, it ruled, served to replace ordinary “retirement” pay and thus must be classed as a community asset.
We agree with the reasoning of the trial court; to permit the husband, by unilateral election of a “disability” pension, to “transmute community property into his own separate property” (In re Marriage of Fithian, supra, 10 Cal.3d 592, 602), is to negate the protective philosophy of the community property law as set out in previous decisions of this court. We therefore affirm the judgment of the trial court apportioning husband’s *783pension rights between separate and community assets and dividing the community interest equally between the spouses.
Turning to wife’s cross-appeal, we explain that the trial court’s order limiting its jurisdiction over spousal support to 24 months conflicts with the policy established in our recent decision of In re Marriage of Morrison (1978) 20 Cal.3d 437 [143 Cal.Rptr. 139, 573 P.2d 41]. Because any assertion that wife will attain economic self-sufficiency within 24 months of the judgment below rests on speculation, not evidence, the trial court’s order divesting itself of the power to order spousal support beyond that brief period constitutes an abuse of discretion. We therefore reverse that portion of the trial court’s order, remanding the matter for further proceedings in light of this opinion.
1. The trial court correctly apportioned husband’s pension into community and separate assets.
In the instant case the husband joined the Army in 1944 and married in 1950. In 1953 he suffered a service-related injury leading to amputation of his left forearm, for which the Army assigned him an 80 percent disability rating. If the husband had retired immediately, his maximum “disability” pay would have been 75 percent of basic pay, compared to a maximum “retirement” pay of 22 Vi percent of basic pay. He nevertheless continued his military service until he retired in 1970. At that time he faced the choice of taking regular “retirement” pay at the rate of 65 percent of his basic pay, or taking “disability” pay, a stipend equal to 75 percent of basic pay.2 Assuming the husband desired the higher amount, the Army began making “disability” payments to him.
The husband commenced proceedings for dissolution of the marriage in 1974. The trial court first determined that all pension rights attributable to the husband’s military service before marriage, plus the portion of those rights earned during marriage attributable to the husband’s disability, constituted his separate property. It then ruled that that portion of the pension rights earned after the marriage equivalent to an ordinary retirement pension, computed on the basis of longevity of service and rank at retirement, constituted a community asset.
*784The court finally divided this asset equally between the spouses.3 The husband appeals from the portion of the judgment awarding his wife part of his pension as community property. The wife also appeals from the judgment below; challenging the court’s apportionment, she claims that only that portion of the pension attributable to husband’s employment before marriage is separate property.
We begin our discussion of this issue by reviewing the procedure by which a disabled serviceman may compute the amount of “retired pay” to which he is entitled. He may elect, first, to compute his “retired pay” on the basis of his rank and disability by multiplying his monthly basic pay by his percentage of disability. Alternatively, he can compute his “retired pay” on the basis of rank and longevity of service by multiplying his monthly basic pay by 2Vi percent times his years of service. (10 U.S.C. § 1401.) Under either formula, he cannot receive more than 75 percent of his last monthly basic pay. The amount of retired pay the serviceman receives under either option therefore depends largely on his monthly pay at retirement, a function of longevity of service and rank; rank itself is closely related to length of service.
In In re Marriage of Jones, supra, 13 Cal.3d 457, and In re Marriage of Loehr (1975) 13 Cal.3d 465 [119 Cal.Rptr. 113, 531 P.2d 425], its companion memorandum decision, we held that a serviceman’s right to “disability” pay, acquired before he had earned a “vested” right to ordinary retirement pay, was separate property. Subsequently in In re Marriage of Brown (1976) 15 Cal.3d 838 [126 Cal.Rptr. 633, 544 P.2d 561], we held that “vested” and “nonvested” pension rights should be treated alike. Relying on those decisions, the husband contends that all military *785pensions based on disability are now separate property.4 Closer examination, however, reveals that the reasoning of Jones and Brown supports the division of the husband’s pension which the present trial court ordered.
In Jones, we held that when a spouse is entitled to receive a pension only because he is disabled, and has no right to a pension because of longevity of service, the disability benefit payments are his separate property upon dissolution of the marriage. At the time Jones was decided, however, we deemed the community, interest in a nonvested retirement pension a mere expectancy, and not a property interest. (See French v. French (1941) 17 Cal.2d 775 [112 P.2d 235, 134 A.L.R. 366].) Since Jones retired before his right to a “retirement” pension vested, his acceptance of “disability” pay did not affect any present community asset, but merely prevented an expectancy from coming into fruition. Recognizing, however, that the principles in Jones might not govern a case in which the serviceman had acquired a vested right to retired pay wholly apart from his disability, we expressly limited our decision to cases involving nonvested pensions.
One year following our decision in Jones we overturned past precedent and held in In re Marriage of Brown, supra, 15 Cal.3d 838, that pension rights, whether or not vested, constituted a property interest; that to the extent that such rights derive from employment during coverture, they now comprise community assets. This holding undermines the fundamental premise of Jones: that the award of a serviceman’s “disability” pension to the serviceman as his separate property would not impair any community interest of his spouse. Under current law—in contrast to the law prevailing when Jones was decided—both the nonvested retirement pension in Jones and the husband’s vested right to a “retirement” pension in the present case constitute valuable community assets deserving of judicial protection.
*786Our reasoning in Brown is particularly appropriate to the present case. As we stated there, “[o]ver the past decades, pension benefits have become an increasingly significant part of the consideration earned by the employee for his services. As the date of vesting and retirement approaches, the value of the pension right grows until it often represents the most important asset of the marital community. ... A division of community property which awards one spouse the entire value of this asset, without any offsetting award to the other spouse, does not represent that equal division of community property contemplated by [the Family Law Act].” (In re Marriage of Brown, supra, 15 Cal.3d 838, 847.)
We cannot permit the serviceman’s election of a “disability” pension to defeat the community interest in his right to a pension based on longevity. In the first place, such a result would violate the settled principle that one spouse cannot, by invoking a condition wholly within his control, defeat the community interest of the other spouse. (See Waite v. Waite (1972) 6 Cal.3d 461, 472 [99 Cal.Rptr. 325, 492 P.2d 13]; In re Marriage of Peterson (1974) 41 Cal.App.3d 642, 650-651 [115 Cal.Rptr. 184].)* ***5 As the court explained in In re Marriage of Mueller (1977) 70 Cal.App.3d 66 [137 Cal.Rptr. 129], a case indistinguishable from the present appeal, the employee spouse retains the right to determine the nature of the benefits to be received.6 It would be inconsistent with community property principles “to permit that spouse to transmute what would otherwise be community property into his or her separate property.” (70 Cal.App.3d at pp. 71-72.)7
In the second place, “only a portion of husband’s pension benefit payments, though termed ‘disability payments,’ is properly allocable to disability. It would be unjust to deprive wife of a valuable property right simply because a misleading label has been affixed to husband’s pension *787fund benefits.” (In re Marriage of Cavnar (1976) 62 Cal.App.3d 660, 665 [133 Cal.Rptr. 267]; see Pattiz, In a Divorce or Dissolution Who Gets the Pension Rights: Domestic Relations Law and Retirement Plans (1978) 5 Pepperdine L.Rev. 191, 198 and cases there cited.)8
The purpose of disability benefits, as we explained in Jones, is primarily to compensate the disabled veteran for “the loss of earnings resulting from his compelled premature military retirement and from diminished ability to compete in the civilian job market” (13 Cal.3d at p. 459) and secondarily to compensate him for the personal suffering caused by the disability. Military retired pay based on disability, however, does not serve those purposes exclusively. Because it replaces a “retirement” pension, and is computed in part on the basis of longevity of service and rank at retirement, it also serves the objective of providing support for the serviceman and his spouse after he leaves the service. Moreover, as the veteran approaches normal retirement age, this latter purpose may become the predominate function served by the “disability” pension.
The present case illustrates the point. The husband here did not retire prematurely from military service to face the prospect of competing on the civilian labor market handicapped by his disability; he served for 26 years, retiring only after he had acquired a vested right to a “retirement” pension. He did not begin to receive his disability pension until 17 years after the injury. The value of his present “disability” pension depends largely on the high military rank he had achieved at the time of retirement and his extensive military service; it does not relate to his rank or longevity at the time of injury. Under these circumstances, the pension’s function of compensating the husband for loss of earning capacity or providing recompense for personal suffering is secondary to the primary objective of providing retirement support.
The Court of Appeal in In re Marriage of Mueller, supra, 70 Cal.App.3d 66, explained the method of allocating a disability pension between the separate interest of the disabled spouse and the community *788interest in the retirement benefits. It stated that “where the employee spouse elects to receive disability benefits in lieu of a matured right to retirement benefits, only the net amount thus received over and above what would have been received as retirement benefits constitutes compensation for personal anguish and loss of earning capacity and is, thus, the employee spouse’s separate property. The amount received in lieu of matured retirement benefits remains community property subject to division on dissolution.” (70 Cal.App.3d at p. 71.)9
The trial court in the present case correctly followed this formula. It first classified as separate property that portion of the husband’s pension attributable to employment before marriage. Turning to the balance of the pension, it assigned as separate property only the excess of the husband’s pension over the “retirement” pension that he would have received if not disabled; the remainder of the pension it divided as community property.10 Finding this portion of the trial court’s decision in accord with the principles stated in In re Marriage of Mueller, supra, 70 *789Cal.3d 68, and adopted in this opinion, we affirm its division of the marital property.11
2. The trial court abused its discretion by limiting its jurisdiction to modify spousal support to a period of 24 months.
The trial court ordered husband to pay to wife “as and for her spousal support, the sum of $1.00 per month, payable for a period of twenty-four (24) months, commencing March 1, 1974, subject to the continuing jurisdiction of the Court to alter, modify, or terminate the same upon good cause first being shown.” Wife does not challenge the amount of $1 per month, but contends that the 24-month limitation is an abuse of discretion.
Since the court’s continuing jurisdiction is not expressly limited to the 24-month period, the order is not entirely clear on its face. The award of $1 per month alimony, however, serves to clarify the meaning of the order. That award plainly is not intended as genuine support for the wife, but to serve as a legal fiction demonstrating the continuing jurisdiction of the court over spousal support. By limiting the $1 per month payments to a period of 24 months, the court impliedly indicated that it did not intend to extend its jurisdiction to modify the award of spousal support beyond the 24-month period.
So interpreted, the trial court’s award is inconsistent with our recent decision in In re Marriage of Morrison, supra, 20 Cal.3d 437. We stated in Morrison that “A trial court should not terminate jurisdiction to extend a future support order after a lengthy marriage, unless the record clearly indicates that the supported spouse will be able to adequately meet his or her financial needs at the time selected for termination of jurisdiction. In making its decision concerning the retention of jurisdiction, the court must rely only on the evidence in the record and the reasonable inferences to be drawn therefrom. It must not engage in speculation. If the record does not contain evidence of the supported spouse’s ability to meet his or her future needs, the court should not ‘bum its bridges’ and fail to retain jurisdiction.” (20 Cal.3d at p. 453.)
In the present case, the parties had been married for 25 years. Following retirement from the military, husband has not been employed. Wife attempted to start work as a part-time real estate salesperson, but as of trial she earned only about $100 a month. As is so often the case, the *790combined income of the parties is insufficient to meet the anticipated expenses of separate living.12
If the husband’s military pension is divided as ordered by the trial court, husband and wife will have approximately equal monthly incomes; thus the award of only $ 1 per month in spousal support is not an abuse of discretion. Any attempt to predict conditions of two, five, or ten years hence, however, is a matter of total speculation. Husband may remain unemployed and totally dependent on his military pension; on the other hand his demonstrated talents may yield a well paying job. Wife may or may not succeed as a real estate salesperson.
Both In re Marriage of Morrison and the Court of Appeal cases cited with approval in Morrison stress that decisions to terminate continuing jurisdiction cannot be based on speculation concerning future earnings and employment. Such decisions should instead be deferred until the realized facts demonstrate whether further support is warranted. As the Court of Appeal explained in In re Marriage of Smith (1978) 79 Cal.App.3d 725, 738-739 [145 Cal.Rptr. 205]: “[B]y making an order terminating all spousal support . . . without reserving jurisdiction to extend the period, the court put it out of its power to provide any support whatever for wife after that time even if, after maximum effort on her part, she is unable to support herself in a reasonable fashion. There is no justification for the court so ‘burning its bridges.’ ” (See also In re Marriage of Andreen (1978) 76 Cal.App.3d 667, 673 [143 Cal.Rptr. 94].)
We conclude that the trial court abused its discretion in divesting itself of jurisdiction to award spousal support 24 months after the date of the decree. Four years having passed since the trial court rendered its judgment, that court should now reconsider the issue of spousal support in light of the current income and earning potential of the parties, and frame its award in conformity with the principles outlined in this opinion and elucidated fully in In re Marriage of Morrison, supra, 20 Cal.3d 437.13
*7913. Summary
We conclude that military retired pay based on disability contains two components: (a) compensation to the serviceman for loss of earning power and personal suffering, and (b) retirement support. The latter component, to the extent that it is attributable to employment during marriage, is community property.14 The trial court correctly followed this analysis in apportioning the husband’s pension rights in the instant case. That court erred, however, in limiting its jurisdiction to award spousal support to the brief period of two years; it should have retained jurisdiction in order to be able to evaluate the parties’ needs and capacities in light of future events.
The portion of the judgment limiting the court’s jurisdiction to award spousal support is reversed and the cause remanded for further proceedings consistent with the views expressed herein. In all other respects the judgment is affirmed. Marilyn Stenquist shall recover her costs on this appeal.
Bird, C. J., Mosk, J., Richardson, J., Manuel, J., and Jefferson, J.,* * concurred.
We used the labels “disability pay” and “retirement pay” in In re Marriage of Jones (1975) 13 Cal.3d 457, 460 [119 Cal.Rptr. 108, 531 P.2d 420], Sections 1201 and 1401 of 10 United States Code, which govern military retirement benefits, speak only of “retired pay."
We note that if the husband had retired four years later, in 1974, both his maximum “disability” and his maximum “retirement” pay would have been 75 percent of his basic pay.
The trial court held that “[t]he ratio of that portion of the marriage from the commencement thereof up until the time of the petitioner’s [husband’s] retirement from military service, as compared with the entire total service of twenty-five years, eight months and ten days with which petitioner was credited, is seventy-seven percent (77%). The Court therefore finds that had the petitioner retired on longevity retirement pay, the respondent [wife] would be entitled to 38.5% of such pay, as a division of community property, such percentage representing fifty percent (50%) of the amount of such retirement accumulated during coverture . . . . [H] The Court further finds that ... the difference in pay between what the Petitioner would have received had he retired on straight retirement for years, and the disability pay which he is actually receiving, is the sole and separate property of the husband, while said lesser sum is community property, as accumulated during coverture. . . . [H] Pursuant thereto, the Court finds that 65/75ths (86.66%) of the disability retirement pay being received by the Petitioner would be community property to the extent the same was accrued during coverture, and that 77% thereof was so accrued during coverture, hence, 66.73% of said disability retirement pay is community property and one-half thereof (33.36%, rounded off to 33!ó% for convenience, by stipulation) is respondent’s share. (86.66% X 77% +2 =33!6%).’’
The wife on her part acknowledges that the trial court arrived at an equitable apportionment of the pension between separate and community interests. She argues, however, that the duty of making such apportionment imposes so great a burden on the courts that we should instead adopt a clear and simple rule that all “disability” payments, the right to which was earned during coverture, are community property. Rejecting this rigid rule and the contention that any other disposition of the issue causes complications, we point out that the method of apportionment adopted by the trial court, which we endorse, does not involve any delicate balancing of equities, but a simple mathematical computation based on the relationship of the “disability” pension to an alternative “retirement” pension. It does not impose a burden so heavy that for reasons of expediency we must settle for the less equitable, all-or-nothing rule wife proposes.
While in In re Marriage of Brown, supra, 15 Cal.3d 838, 851, footnote 14, we disapproved dicta in Waite and Marriage of Peterson to the effect that nonvested pension rights were not community property, we did not disapprove the holding in those cases that one spouse could not by election destroy the community interest of the other spouse.
Recognition of the nonemployee spouse’s interest in the “disability” pension would not limit the employee’s freedom “to elect between alternative retirement programs." (In re Marriage of Brown, supra, 15 Cal.3d 838, 849.) Any serviceman eligible to receive “disability” payments higher than ordinary retirement benefits would remain free to elect the higher payments if he so chose.
We note that the courts of Texas have held that if a serviceman surrenders a vested right to retirement benefits in order to obtain “disability” benefits, the “disability” benefits are community property. (See Busby v. Busby (Tex. 1970) 457 S.W.2d 551; Dominey v. Dominey (Tex.Civ.App. 1972) 481 S.W.2d 473, cert. den., 409 U.S. 1028 [34 L.Ed.2d 321, 93 S.Ct. 462].)
As we have affirmed many times, adjustments in the amount of alimony awarded will not mitigate the hardship caused the wife by the denial of her community interest in the pension payments. Alimony lies within the discretion of the trial court and may be modified with changing circumstances: “the spouse ‘should not be dependent on the discretion of the court... to provide her with the equivalent of what should be hers as a matter of absolute right.’ ” (In re Marriage of Brown, supra, 15 Cal.3d 838, 848.)
Although the quoted language from In re Marriage of Mueller speaks of “matured” retirement benefits, the court earlier in its opinion made clear that matured benefits could not be distinguished from immature but vested benefits. Indeed in light of In re Marriage of Brown, supra, 15 Cal.3d 838, no distinction can be drawn between matured benefits and nonvested benefits.
Contrary to the view advanced in the dissenting opinion, allocation of the “disability” pension between separate and community interests does not discriminate against the disabled. In attempting to demonstrate such discrimination, the dissent first describes a healthy worker who takes some action, such as terminating his employment before his pension vests or working beyond his retirement date, which has the effect of forfeiting all or part of his pension rights. In such a case, of course, the worker’s spouse has no claim to any of the forfeited rights; a community share of nothing equals nothing. (See Reppy, Community and Separate Interests in Pension and Social Security Benefits After Marriage of Brown and ERISA (1978) 25 UCLA L.Rev. 417, 426, fn. 31.) The dissent then compares such a healthy worker to a disabled worker who retires and receives a “disability” pension, part of which under the present decision will be classified as community property. Because the spouse of the disabled worker can claim a share in his pension, the dissent concludes that the decision discriminates against the disabled.
The conclusion of the dissent, however, derives from the dissent’s inappropriate comparison. If instead of comparing a healthy worker who has forfeited pension rights with a disabled worker receiving a pension, we compare healthy and disabled workers who are both receiving pensions, we discover that under the allocation formula set forth in this opinion the disabled worker usually will retain a higher percentage of the benefits. In the present case, for example, the husband’s pension by virtue of his disability is higher than the “retirement” pension of a healthy serviceman of equivalent rank and longevity. Because we allocate to husband the whole of the excess of his “disability” pensions over a “retirement” pension, he receives greater pension benefits than does the undisabled veteran.
Language in In re Marriage of Jones, supra, 13 Cal.3d 457, and In re Marriage of Loehr, supra, 13 Cal.3d 465, inconsistent with this opinion, is disapproved.
The record on appeal does not include a reporter’s transcript of the brief testimony heard by the trial court. The arguments of the parties suggest that none of this testimony bore on the question of the wife’s ability to attain economic self-sufficiency within a period of two years following the decree.
Upon such reconsideration, the trial court may wish to reserve jurisdiction to award spousal support to the husband as well as to the wife if the economic prospects of the parties so warrant.
Following the policy of In re Marriage of Brown, supra, 15 Cal.3d 838, 851, our holding respecting the division of military “disability” pensions applies retroactively only to cases “in which the property rights arising from the marriage have not yet been adjudicated, to such rights if such adjudication is still subject to appellate review, or if in such adjudication the trial court has expressly reserved jurisdiction to divide pension rights.”
Assigned by the Chairperson of the Judicial Council.