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Since this law was established, the rules for drafting a Qualifying Court Order to provide retirement benefits to a former spouse have continually changed. A most recent modification can be found in DoD 7000.14-R, Financial Management Regulation, Volume 7B, Chapter29 (July 2019).
Since the Military Retirement System is a government plan, it does not fall under the rules of ERISA like traditional private defined benefit plans. Further, frequent modifications to the rules makes dividing benefits between divorcing parties a little more complicated.
Understanding the Military Retirement System (MRS)
You must know the rules in order to successfully divide benefits between parties in a divorce.
To make it easier to understand, we have developed a list of the TOP 10 Most Important Things to Know When Dividing Military Benefits in a Divorce.
Before you venture down the path of drafting a Qualifying Court Order, we strongly suggest that you take time to review our TOP 10 LIST, and as always, CALL US with any questions. We are here to help you.
TOP 10 Most Important Things to Know When Dividing Military Benefits in a Divorce
1.10 Year Rule - In order for a former spouse to qualify to receive a portion of a member’s retirement benefits directly from the Military Retirement System (DFAS), the parties have to have been married for 10 years while the member was performing creditable military service. If this 10 year rule is not met, then the former spouse CANNOT be awarded benefits as a division of marital property. However, a court order can still be drafted to make an award of benefits as alimony or child support. BEFORE YOU DRAFT A COURT ORDER MAKE SURE THE 10 YEAR RULE HAS BEEN MET.
2. Survivor Benefit Plan (SBP) – In order for a former spouse to be eligible to receive survivor benefits, 2 very important criteria must be met:
3. DFAS will not figure out the “Marital Portion” – You have 2 ways to phrase an award to a former spouse: a specific dollar amount each month OR a percentage of the member’s “hypothetical” retirement benefit calculated using time of service and rank/base pay as of the date the marriage ended. If part of the benefits were earned prior to the date of marriage, YOU WILL HAVE TO FIGURE OUT THE COVERTURE YOURSELF AND USE THE ADJUSTED PERCENTAGE IN THE ORDER.
4. Factors used to calculate the “hypothetical” retirement benefit must be included in the Order – If the former spouse has been awarded a percentage of the “hypothetical” retirement benefit, YOU MUST INCLUDE THE FOLLOWING IN THE ORDER: either the months of service (for an active member) as of the date the marriage ended or the number of points accumulated (for a reservist) as of the date the marriage ended AND either the base pay (member’s who joined after 1980) or the rank and pay (member’s joined prior to 1980). If you don’t have this information you can submit Standard Form 180 (SF-180) to the appropriate DFAS office to obtain the member’s military record. The appropriate office is dictated by the member’s status as active or reserve or if inactive, date of discharge. Please review our information regarding submitting paperwork for more specific instructions.
5. You can NEVER award more than 50% of the Member’s total retirement benefit – DFAS will NEVER ACCEPT AND ORDER AWARDING MORE THAN 50% OF THE MEMBER’S TOTAL DISPOSABLE RETIRED PAY.
6. Is the Member in the Blended Retirement System? – In 2018, the Military began offering a combination retirement plan that reduces the monthly benefit payable at retirement, but allows the Member to participant in a Thrift Savings Plan. Participation in this new blended retirement plan is based upon the Member’s enlisting date, and is further granted to certain member’s through a grandfathered system. IT IS IMPORTANT TO KNOW WHAT BENEFITS THE MEMBER HAS AND WHAT ACTUALLY ACCUMULATED DURING THE PERIOD OF MARRIAGE.
7. Do you also need a court order dividing benefits accumulated in the Thrift Savings Plan? – A court order served on the Military Retirement System (DFAS) will only be sufficient to make an award of the monthly benefit accrued by the Member. If the member participates in the Thrift Savings Plan through the new blended system and benefits held in that plan are also to be divided pursuant to the terms of the divorce, YOU WILL NEED TO DO ANOTHER COURT ORDER FOR THE THRIFT SAVINGS PLAN.
8. You have to fill out the required forms. – Drafting the Qualifying Court Order is not enough. You must fill out the appropriate forms relative to your specific situation.
9. You must submit the Certified Court Order and required forms to the appropriate DFAS¬ - The Qualifying Court Order certified by the court within 90 days prior to the date of receipt AND ALL completed forms must be sent to the designated DFAS Center based upon the Member’s branch of military service. If the former spouse was awarded the SBP, the Qualifying Court Order certified by the court within 90 days prior to the date of receipt plus ALL completed forms SHOULD ALSO be sent to the DFAS in Indianapolis, IN - ATTN: SBP Coverage for Former Spouse. Further details regarding submitting these documents can be found in your account on your Documents Page. IT IS IMPERATIVE THAT YOU FOLLOW THE SUBMISSION INSTRUCTIONS LOCATED IN YOUR ACCOUNT.
10. Confused or unsure of the information provided? - IF YOU HAVE QUESTIONS PLEASE CALL US. We are here to help you.
