The division of military pension in divorce is a very broad topic. This post focuses on military retired pay and distinguishes this pay from other forms of remuneration and benefits, such as survivor benefits, disability pay and other benefits. We will discuss the various components of retirement and related benefits associated with service in the USA armed forces
IMPORTANCE OF ADDRESSING MILITARY PENSION IN DIVORCE
It is now indisputable that retirement benefits, often one the most valuable asset of marriage, are divisible on divorce to the degree to which they were accrued (BEFORE the couple’s separation) during the marriage and before the parties’ separation. This is true of a military pension in divorce.
Military retirement benefits are so central to a divorce involving those assets that attorneys must know the detail required to provide for their adequate disposition. It is important for your attorney to deal with these benefits accurately and completely during the divorce itself, instead of deferring the matter to a later date. There is no good reason to litigate indefinitely when military pension in divorce should be divided at same time as spouses’ other property.
BACKGROUND TO DIVISION OF MILITARY PENSION IN DIVORCE
Judicial and legislative treatment of rights to military benefits on marital dissolution has varied over several decades and continues to evolve as policies for hiring and retaining service members change with national security needs.
In the 1960s and 1970s, many courts did not consider military pension in divorce as community property, characterizing it instead as either mere expectancies or the sole property of the plan member.
In 1981, the United States Supreme Court concluded that California community property laws conflicted with the federal military retirement scheme and were impliedly preempted by federal law. ( McCarty v McCarty)
. Enactment of USFSPA
In 1982, Congress reacted to McCarty v McCarty enacting the Uniformed Services Former Spouses’ Protection Act (USFSPA) effective February 1, 1983. The primary purpose of USFSPA was to change the effect of McCarty and establish state court jurisdiction to consider and use military pension in divorce in fixing the property and support rights of the parties to a dissolution, annulment, or legal separation.
. Operation of USFSPA
Overview of USFSPA and related regulations. USFSPA permits state courts to distribute military retirement to ex-spouses. USFSPA is also providing a method for enforcement of these orders through the military pay center.
USFSPA has established a federal mechanism for recognition state court divisions of a military pension in divorce.
An ex-spouse’s right to a portion of retired pay as property terminates on the death of the member or the former spouse IF the court order would not provide for earlier termination. The right to receive payments under USFSPA is nontransferable; thus, the ex-spouse may not assign, sell, or transfer her or his rights, or make s disposition by inheritance. Military retirement benefits can be treated as property to be divided between the parties, as a source of payment of child or spousal support, or both. USC §1408(c)–(d). All that is necessary to use military retirement benefits as a source for child support or spousal support payments is proper service on the military pay center of a certified court order—issued by a court having personal jurisdiction over both parties under the law of that state—requiring payments to a former spouse for such support. 10 USC §1408(d).
USFSPA is more limiting regarding the division of retired pay as property. An ex-spouse can apply for direct payment from the military to the former spouse, but USFSPA limits direct payment to a former spouse to 50 percent of a disposable military pension in divorce for all payments of property division. More than 50 percent of disposable pay could be paid if there is a garnishment for arrears in the child or spousal support, or in payments of money as property other than for a division of retired pay.
In 2018 became effective the “Blended Retirement”
A big change in the military pension benefits that are payable became effective in 2018 through the enactment of the Uniformed Services Blended Retirement System (BRS). The change to the “Blended Retirement” plan passed in 2016 was the biggest restructuring of military retired pay in decades. Beginning in 2017, current members who had less than 12 total years of service when the new plan became effective in 2018 were able to switch over to the new system. The new system is mandatory for members entering service on or after January 1, 2018.
The (defined contribution) Thrift Savings Plan (TSP) will be a much larger asset to be divided in divorce cases, and the (defined benefit) regular pension will become somewhat smaller.
KEY CONCEPTS IN DIVIDING MILITARY PENSION IN DIVORCE
In a military case, an order dividing military pension in divorce as the property of the member of the plan and the ex-spouse will be honored by the military only if the issuing court exercised personal jurisdiction over the member of the plan on any of the following ground:
- Residence in the territorial jurisdiction of the court (other than by military assignment);
- Domicile in the territorial jurisdiction of the court; or
- Consent to the jurisdiction of the court.
The rules do not restrict spousal or child support orders, which will be awarded if the state court had personal and subject matter jurisdiction under the state law.
The important point of this jurisdictional comment is that the spouse should never take a default dissolution against an out-of-state military member if seeking to divide the retirement benefits. The resulting judgment will not be enforceable. If valid jurisdiction under both state and federal law cannot be achieved, then the action may have to be dismissed and refiled in the state in which the military member resides or is domiciled.
In order to divide military pension in divorce and obtain direct payment of retired pay to the spouse as property, marriage should overlap the member’s military service by at least 10 years during the creditable military. Moreover, if there is no 10-year overlap, it can be possible to substitute a spousal support award that is directly payable irrespective of the length of the marriage or service overlap.
Military retired pay can be used for payment of child support, spousal support and division of property with certain collection limitations:
- 50 percent only of monthly disposable pay can be paid out for all current orders, combined
- If support, as well as some other arrears, are also being garnished, the percentage of total “remuneration for employment” that may be collected rises to 65 percent