Decision to apply "marital share" allocations to divorced retirees retroactively has led to many former feds to go into debt.
A group representing the federal law enforcement community last week sent a letter to acting OPM Director Margaret Weichert asking her to roll back an Obama administration decision to change how payments to divorced retirees are distributed to them and their former spouses.
The Federal Law Enforcement Officers Association, which represents more than 27,000 federal law enforcement professionals across 65 agencies, blasted a 2016 OPM decision to grant a “marital share” of the Federal Employees Retirement System Retiree Annuity Supplement to a retiree’s ex-spouse if the retiree is subject to a state divorce decree. Before that decision, the agency would only grant that share based on the basic annuity.
The retiree annuity supplement is the money that is paid to retirees who are not yet eligible for Social Security, which kicks in at age 62. Many law enforcement positions force officers to retire at 57. For decades, the supplement was not subject to a court-ordered marital share because OPM considered it to be a Social Security-type benefit, and thus not part of a divorce agreement.
“This policy change constituted an unwarranted reinterpretation of a 30-year old provision of the FERS statute and, more importantly, has caused real financial harm to federal law enforcement and other retirees for the more than two years that it has been enforced by the agency,” wrote association National President Nathan Catura.
In addition, the association said that OPM has applied the policy retroactively, leading to many officers suddenly owing money to the government to send to former spouses.
“[In] the more than two years since it implemented this revised policy, OPM has applied its reinterpretation retroactively and with little to no regard for the financial harm it has inflicted on retirees,” Catura wrote. “It has created individual retiree debts due to the federal government of as much as $28,389.96 (that we are aware of)—debts for which OPM has sought repayment in the form of prospective and retrospective assessments from annuitants’ retirement benefits.”
The decision to apply marital share to the annuity supplement has drawn criticism from both Congress and an agency watchdog. Sen. James Lankford, R-Okla., wrote in May that the policy change could constitute a violation of the Administrative Procedures Act, and the OPM Inspector General issued a report in February questioning the manner in which the policy was changed outside of the traditional rule-making process.
“OPM did not provide any public notice that it now considers the annuity supplement to be allocable and that, as a result, OPM will now apply the state court-ordered marital share to the annuity supplement, even when the state court order refers to the basic annuity only,” the IG wrote. “[OPM’s] new policy has been causing immediate financial disruption to annuitants. Moreover, OPM’s new policy improperly changes previously litigated final state court orders without notice to annuitants.”
OPM did not respond to a request for comment, but it disagreed with each of the findings of the IG report and suggested the report could jeopardize pending cases before the Merit Systems Protections Board. In April, the MSPB overturned a decision in which OPM sought to collect $24,000 in debt from a retired air traffic controller related to the policy change.
“As Sen. Lankford, the OIG, and MSPB have concluded, this policy change was implemented in a clandestine fashion without any regard for the court-ordered and previously-litigated provisions of the specific divorce settlements of affected retirees,” Catura wrote. “Instead, retirees and their former spouses only learned of OPM’s actions when their annuity payments changed, in some cases years after the parties had divorced and a state court had ordered a former spouse’s marital share.”