Divorce: Military exes to get lower share of pensions
Divorce among military families can be emotionally and logistically complicated. One area of military divorce just got tougher: how the federal government splits military pensions between divorcing spouses.
The new appropriations and authorization for 2017 National Defense Authorization Act, signed by President Obama on December 23, 2016, contained the first changes (Sec. 641 of S. 2943) to the Uniformed Services Former Spouses’ Protection Act since the Act became law in 1982. Formerly, a divorcing spouse was entitled to a marital portion of the spouse’s military pension based on that person’s rank and years of service as of the date of actual retirement. The changes signed into law on Dec. 23 provide that the calculation is made based on rank and years of service as of the date of the Court Order to separate pension benefits.
Why is this significant? It will dramatically reduce pension benefits for an ex-military spouse, for anyone divorced Dec. 24, 2016 and later, effective immediately.
Say a couple is married for 10 years, and the military spouse has achieved a certain rank and credit for service. That spouse may still be 10, 20 or 30 years away from taking retirement and drawing from their military pension, decades in which their pension benefits continue to increase. The 1982 Act assumed that the nonmilitary spouse contributed towards the achievement of rank and longevity, and granted the spouse a marital portion of that pension, which would keep building benefits as the military ex-spouse kept advancing in rank and years of service. Thus, after the Court split military pension benefits, most exes have in the past chosen to delay receiving pension benefits until the military spouse actually retired, so they could maximize their own benefits.
The new revisions will end that accrual, which opponents have called a “windfall” for ex-military spouses and proponents thought to be an equitable way of resolving marital asset division. The revisions will freeze the pension division calculation at the point of Court Order, and, except for Cost of Living Adjustments, remove any reason for an ex to delay taking the pension payments to which they are entitled.
Another concern is that there is no provision to allow parties to come to their own, different method of pension division. The fixed, federally mandated method of calculation is set, and de facto overrides state government regulations. This is, obviously, not true of other, civilian retirement assets held by either party, which are subject only to state divorce code. While a handful of states have community property laws that would counteract the new regulation, Pennsylvania is not among them. States will be scrambling to enact their own laws in keeping with this federal regulation, but the changes take effect immediately. Thus military spouses may be caught in the collision of federal and state laws, with the result being the sudden and drastic reduction of benefits an ex-spouse can expect.
In my office, we try to stay up to date on legal matters that may impact how retirement benefits are treated during your divorce. For more information on this sensitive topic, consult Mark E. Sullivan, Esquire’s thorough pre-passage discussion for the American Academy of Matrimonial Lawyers; or Kate Horrell’s comments on Military.com.
– Elissa C. Goldberg, Esquire