Unfortunately, the lawyers and the judge involved in your divorce did not understand the military retirement system and how is applies when divorce occurs. They either were ignorant of or oblivious to the Uniformed Services Former Spouses' Protection Act
(USFSPA), 10 USC § 1408, which is the law controlling this particular issue.http://www.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00001408----000-.html
Instead, what the lawyers and the court did in your case as to treat husband’s entitlement to receive military retired pay as if it were a private-sector retirement plan that is controlled by the federal ERISA law (Employee Retirement Income Security Act).
Apparently not understood is that the ERISA law (providing for the use of Qualified Domestic Relations Order
(QDRO) to divide a divorcing spouse’s interest in a retirement plan, does NOT APPLY to the government’s military retirement system. The means, methods, procedures, terminology, rights and liabilities, limitations and restrictions applicable to a state divorce court’s treatment of a military retirement entitlement under the USFSPA law are entirely different than those applicable to private-sector retirement plans that are controlled by the ERISA law.
The fundamental problem in your case (which you will soon come to realize) is the failure of the lawyers (particularly YOUR lawyer) to understand (and apply) the correct law so as to protect your legal and financial interests. (You might want to confer with some other attorney about a possible malpractice lawsuit against the lawyer who represented you in your divorce.)
Among other distinguishing features, a QDRO, as defined in 26 USC § 414(p), does not apply to the division of military retirement entitlements. As to the division of military retired pay incident to dissolution of marriage, there is no “Fund” or “Fund administrator,” nor is there a “plan participant” and an “alternate payee.” What the lawyers did in your case (trying to apply ERISA’s QDRO law to the division of military retired pay) is like trying to smash a round peg into a square hold. To say that “Payment shall be consistent with the distribution options available and the terms and conditions of the Fund prevailing at that time,” and that “The participant's benefit under the Fund shall be reduced by the value of the benefit to the Alternate Payee, determined as the date benefit payments are commenced to the Alternate Payee,” is TOTALLY WRONG and will not work with the entitlement to military retired pay. Further, a provision that says “To the extent permitted under the Fund, the Participant's death shall not affect the Alternate Payee's rights to receive benefits under the Fund” is utter nonsense when it comes to the payment of military retired pay. And also very important (and not understood) is that the USFSPA law does not allow the divorce court to divide a servicemember’s entitlement to receive “military retired pay” and award a portion thereof to the former spouse. Rather, the state court is limited to dividing only “DISPOSABLE retired pay,” as that term is specifically defined in the USFSPA law. (Also, “disposable retired pay” is a “pre-tax” amount; it is not the same as “net pay” as that term is commonly understood.)
Typically, a QDRO as applied to the division of private section retirement plans requires the “Fund administrator” to deduct from the “participant’s” retirement benefit the portion awarded to the “alternate payee” and make the payment directly to the alternate payee. But due to the USFSPA limitations as applied to military disposable retired pay, and your marriage being of less than 10 years duration, DFAS (the military’s payroll agency) will not be involved in your case and will not make any payment to you of the court-awarded share of your ex-husband’s disposable retired pay. Instead, you will have to look to and rely upon your ex-husband to write a check to you each month in order for you to get your court-awarded share of his disposable retired pay. And because DFAS will not be involved in your case, there is absolutely no need nor purpose for any special type of court order (be it a “military QDRO” or a “Military Retired Pay Division Order.” (Hope you did not pay any money for such to be prepared.)
As to the method to be used for calculating the division of a retirement interest incident to divorce under Utah law, that state generally uses the same approach used in most other states, applying to “coverture fraction” formula when divorce occurs prior to retirement. The methodology was enunciated by the Utah Supreme Court in the case of Woodward v. Woodward,
656 P2d 431 (Utah, 1982), in which the Utah Supreme Court concluded that (unless the parties agree to some other arrangement) the appropriate method for dividing defined benefit retirement interests when divorce occurs before the employee spouse has gone into retirement status and the present value of the future retirement benefit cannot accurately be determined at the time of the divorce is to use a “deferred distribution” approach based upon fixed percentages. The court said that “the marital property subject to distribution is a portion of the retirement benefits represented by the number of years of the marriage divided by the husband's [or wife's] employment. The wife [or husband] is entitled to one-half of that portion.” Woodward
, 656 P2d at 433-34. This is what the “Woodward Formula
” is all about.
For more info as to just how this applies to military disposable retired pay, check out the following websites:
NEXT, here’s what my colleague in North Carolina, Col. Mark Sullivan (USA ret.), tells us about dividing national guard and reserve service pension rights incident to divorce:----->
There are two key considerations
to keep in mind. First
, since Guard and Reserve personnel do not begin to get paid until age 60 (regardless of when they retire), this deferral of payment must be taken into account in the negotiations and the present value calculations. The second
consideration concerns the marital fraction. In those cases where the marriage and the service career do not exactly overlap, the nonmilitary spouse usually receives one-half of the marital fraction times the servicemember’s pension benefit. This marital fraction should be computed twice -- once using marital years of service over total years of service, and then again using marital retirement points over total retirement points -- to determine which computation will best benefit the client. ----->
To see what a difference this might make, let's take an example. Major Bill Smith has five years of Army active duty and 15 years of Army Reserve service. He married when he left active duty. When dealing with Reserve or National Guard issues, be sure to ask the servicemember for a copy of his most recent “points statement” to see how many points have been acquired and how many were during the marriage. To calculate the marital fraction using points, calculate the points he acquired during active duty by multiplying 5 times 365 to get 1825 points. Then count his Reserve points. Assume that he acquired 60 points a year (for weekend drill, "summer camp" and membership) for 15 years, or 900 points. Thus his total points at 20 years are 2725 [1825 + 900], of which 900 (or about 33%) are marital. This should mean that 33% of his retirement pay (assuming retirement and date of separation both occur at year 20) is marital. If we apply the marital fraction using years to his retirement pay, however, then his pension is 75% marital (15 years/20 years = 75%).----->
What a difference! Recognition of these two ways of calculating the marital benefit, and the difference when Major Smith's pension is calculated, is essential to competent representation in the Guard/Reserve pension case. Once again, the federal statutes do not tell us what to do, what fraction to use or what results to expect. This is state-law territory, not something set out in the USFSPA.
ALSO, military retired pay ends when the military retiree dies. Unlike private sector retirement plans, there is no provision for military retired pay to be paid to anybody other than the retired servicemember while he is still alive. No provision to continuation of such retired to a surviving spouse. Thus, unlike private sector ERISA plans, USFSPA makes no provision for and Qualified Joint And Survivor Annuity (QJSA) or a “Qualified Pre-Retirement Survivor Annuity” (QPSA).
However, the military does provide a special life insurance program known as the Survivor Benefit Plan
(SBP). This will provide a monthly annuity for a military retiree’s surviving spouse in an amount generally equal to 55% of what the retiree had been receiving at the time of death. But this can only be provided upon the “election” of the military retiree. But in the case of divorce, the court may include a provision in the divorce decree that orders the military spouse to make such an “election” for “former surviving spouse SBP coverage.” And it if this done, a “DEEMED ELECTION
” application must be submitted to DFAS within one year from the date of entry of the order directing that the election be made. And failure to timely submit the deemed election application with the one-year window allowed for doing so will result in the total loss of surviving former spouse SBP benefits. (I note that your divorce decree says absolutely nothing about your ex-husband being require to elect SBP coverage for your benefit and protection. THIS SHOULD HAVE BEEN DONE!! And it was your lawyer’s responsibility to protect your interests.)
In sum, in order for the former spouse to remain eligible for survivor benefit plan coverage, the member must make an affirmative election for such coverage within 1 year of the date of the decree of divorce, dissolution or annulment. If the member neglects or refuses to make such affirmative election it is possible to protect the former spouse entitlement to the SBP coverage by having the former spouse make a "deemed election" for such coverage within the one year time limit. Accordingly, the member shall be deemed to have made the necessary elections thereby preserving the former spouse entitlement to the SBP coverage.
NEXT.....Unlike ERISA retirement plans, USFSPA makes no provision allowing you to be eligible for receipt of your share of the member’s disposable retired pay prior to his actual commencement of benefits. Also, a retired servicemember who is otherwise eligible may receive only “military retired pay,” as there really is no “military pension.” And there is no “second retirement.” And when he leaves military service, there is no provision of BAH & BAS and other misc. pay. Just retire pay.
FINALLY, here are some websites that will give you far more information than I can provide in this limited space. Be sure to look at each one of them (and hopefully all of the URLs work).....
Everyday Errors in Military Divorce Cases -- http://www.abanet.org/family/military/militarydivorce_errors.pdf
How To Find A Military Divorce Attorney --http://www.abanet.org/family/military/eagle_militarydivorceatty.doc
Dividing Military Retired Pay (from DFAS)http://www.dfas.mil/garnishment/retiredmilitary/speech8.pdf
Higdon on Military Retirement Divorcehttp://www.texasfamilylawinfo.com/docs/Higdon-Military_Retirement_Divorce.pdf
The “Silent Partner” series at the ABA website:http://www.abanet.org/family/military/silent/mpd_scoutingterrain.pdfhttp://www.abanet.org/family/military/silent/mpd_servicemember.pdfhttp://www.abanet.org/family/military/silent/mpd_spouse.pdfhttp://www.abanet.org/family/military/silent/pension_division.pdfhttp://www.abanet.org/family/military/silent/mpd_crdp_crsc.pdfhttp://www.abanet.org/family/military/militarydivorce_errors.pdf
The Uniformed Services Former Spouses’ Protection Act (USFSPA) is codified in the United States Code (USC) as 10 USC § 1408
. Verbatim text of the entire federal statute is online at:http://www.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00001408----000-.htmlhttp://www.militarydivorceonline.com/section1408.htmlhttp://supportavet.us/usfspa.htmlhttp://law.justia.com/us/codes/title10/10usc1408.html
And still more....http://www.dfas.mil/militarypay/garnishment/fs-qa.htmlhttp://www.dfas.mil/militarypay/garnishment/fsfact.htmlhttp://www.dfas.mil/garnishment/retiredmilitary.htmlhttp://usmilitary.about.com/cs/generalpay/a/retirementpay_2.htmhttp://usmilitary.about.com/?once=true&http://www.military.com/benefits/legal-matters/usfpa-overview
Apologies in advance for any duplicate links and any that may not work.
OK. That’s all I can offer for now. Hopefully, I have provided enough here to justify the $15 expense. I wish you well, and I thank you for allowing me to answer your questions.
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Edited by Lawrence D. Gorin on 8/10/2010 at 8:27 PM EST