August 24, 2007Federal employees who have gone through a divorce have an additional complication: their former spouse (and other family members) may be eligible for some of their retirement benefits.
Courts can issue orders awarding benefits to legally separated spouses, former spouses, and children of current employees, former employees and retirees. Here are the benefits that can be awarded:
Entitlement to any of the above benefits must be specifically spelled out in a divorce agreement. If the agreement (in the form of a court order) is silent on any of these benefits, the former spouse is not entitled to receive them.
Attorneys should consult this Office of Personnel Management handbook when drafting the language used to award these benefits.
Who to Call
So if you've gone through a divorce, how do you know exactly which of the above benefits might be awarded to your former spouse? There isn't a one-stop shop to find out, at least not before your actual retirement.
But if you find yourself in this situation, there are three people and organizations you should contact:
When sending the court order, the employee should include his or her full name, complete mailing address, a certified copy of the court order granting benefits, and a signed statement that the order has not been amended, superseded or set aside; and identifying information concerning the employee (or retiree), including full name, date of birth, Social Security number and mailing address.
When Payments Begin
OPM begins paying part of your retirement benefit to your former spouse when the following requirements are met:
Survivor benefits may be awarded to a former spouse pursuant to a court order, or an employee may voluntarily elect a fully or partially reduced annuity to provide a former spouse a survivor annuity. (If the employee has remarried, his or her current spouse must consent to this decision).
A former spouse's annuity terminates upon the death of the former spouse, upon remarriage of the former spouse before age 55 (unless the marriage lasted 30 years or longer), or upon terms established in the court order.
For more information about survivor benefit elections, see these previous columns: Spousal Benefits (March 10, 2006) and Single Concerns (July 21, 2006).
Social Security benefits are not included in court orders, since they are provided by law. Your ex-spouse can receive benefits on your Social Security record as long as he or she:
If you have not applied for Social Security benefits, but are qualified to receive them because you are 62 or older and have more than 40 credits of coverage, your ex-spouse can receive benefits on your record if you have been divorced from him or her for at least two years and meet the requirements listed above.
A fFormer spouses also can receive benefits on your Social Security record even though you were not married to them for 10 years, if they are caring for your child who also is their natural or legally adopted child and the child is under age 16 or disabled at the time they become eligible -- as long as the former spouse is unmarried and not entitled to an equal or higher benefit on his or her own Social Security record.
The amount of benefits your former spouse receives does not affect the amount of benefits you or your current spouse receive.
For more information, see the Social Security Web page on Marriage, Divorce and Name Changes.
Government Pension Offset
If you or your former spouse receive a substantial CSRS retirement benefit, it is unlikely that you (or they) will be eligible to receive any former spouse or widow's Social Security benefits due to the effect of the Government Pension Offset. The GPO reduces your Social Security spousal entitlement by $2 for every $3 in CSRS benefit.
If you were hired under FERS without a CSRS component to your retirement, you are not affected by the GPO. If you are covered by CSRS Offset, you will need to have 60 months of Offset coverage to be exempt from the GPO. Also, those CSRS employees who transferred to FERS before July 1, 1988, and those who transferred after June 30, 1988, and remained covered by FERS for a minimum of five years, are exempt from the GPO.
To learn more about the GPO, see Offsetting Penalty (June 9, 2006).
Finally, if you learn best from mistakes, maybe it would be less painful to learn from someone else's errors or misunderstandings. Here's a link to some Merit Systems Protection Board decisions concerning divorce and the benefits payable to former spouses.
Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.
August 24, 2007