How splitting up with your spouse can affect your retirement benefits.
Federal 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:
- Retirement benefits under the Civil Service Retirement System or the Federal Employees Retirement System (while you and your former spouse are both living).
- Survivor benefits, payable upon your death before or after retirement. If a former spouse remarries prior to turning 55, he or she is not entitled to a survivor annuity, even if it was awarded in the court order.
- FERS basic death benefit, payable upon the death of a FERS employee.
- Refund of employee retirement contributions, if an employee resigns and applies for such a refund.
- Return of retirement contributions upon the death of an employee or recent retiree (payable only if there are no recurring survivor benefits due and only if the retiree has not already received an amount of retirement equal to the amount paid into the retirement fund).
- Under certain circumstances, continued enrollment in the Federal Employees Health Benefits Program.
- Federal Employees Group Life Insurance benefits paid to a former spouse upon your death. A court can require you to "assign" your life insurance to your former spouse so you will no longer be able to change the beneficiary.
- Thrift Savings Plan funds.
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:
- Your Attorney. Your lawyer drafts the court order that divides the benefits, so it makes sense to call and ask him or her to explain to you what was awarded at the time of the divorce and how much is payable to your former spouse upon your retirement. The only problem is the amount of your retirement benefit is generally not known when you get divorced (unless the divorce occurred post-retirement), so the best the attorney can do is guess the amount based on an estimate of your retirement.
- Your Agency. You can request an estimate of your retirement benefits, but don't ask the benefits specialist to make a determination of the amount payable to your former spouse. Retirement specialists should never advise an employee (or spouse or former spouse, for that matter) regarding construction, review or determination of a court order. Get the estimate from your agency first and then contact the attorney for an explanation of the portion that was awarded to your ex. Despite good intentions, an agency's efforts to advise individuals in legal matters involving domestic disputes can do more harm than good.
- The Office of Personnel Management. OPM has a court order unit that reviews orders and determines if they are acceptable for processing. But OPM officials can't determine the amount of the benefit until the employee's retirement is processed, since the salary and service information stays with the employee's agency until retirement.
- A court-certified copy of the divorce agreement should be on file with OPM at the following address: U. S. Office of Personnel Management
Retirement Services Program
Court Order Benefits Branch
P.O. Box 17
Washington, DC 20044-0017
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:
- The former spouse (or a representative) must apply in writing to be eligible for a court-awarded portion of an employee annuity. No special form is required.
- Information sufficient for OPM to identify the employee or retiree, such as his or her full name, CSRS or FERS claim number, date of birth, and Social Security number.
- Current mailing address of the former spouse.
- If the employee has not retired under CSRS or FERS or died, the mailing address of the employee.
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.
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:
- Was married to you for 10 years or longer.
- Is presently unmarried.
- Is 62 or older (if you die first or become disabled). He or she can collect benefits at 60 if you are deceased and at age 50 if you become disabled.
- Is not entitled to a greater benefit on his or her own record.
- Is not receiving a CSRS retirement benefit (because of the Government Pension Offset -- see below).
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.
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