YOUR QUESTION: Would like to know what the dollar amount my spouse would get at my retirement? I need a working number to take to court, not officially of course just a working number to assist me in my decision making.
What is the” nominal martial portion” worth that I will have to pay him when I retire?
I understand it would be one lump sum. How do they come up with a “set dollar /amount”, i.e. how is that calculated?
ANSWER: The dollar amount you former spouse would get at your retirement is based in large part on what YOU get at retirement, and the dollar amounts, if any, depend on future military service not yet performed. You would be engaging in guesswork, conjecture and speculation if you try to use the approach you seem to have in mind. Keep in mind that you may in fact never qualify for military retirement. So there is a risk. And that risk ought be shared by both spouses. If you never get a penny of military disposable retired pay, neither should your former spouse.
Next, I do not understand why you believe a lump sum would have to be paid. You will not receive a lump sum of disposable retired pay, so why should he? You get it in monthly payments for your lifetime, and he gets his marital share only during your lifetime. It all ends when you die. Unless you have been order to elect SBP coverage for your former spouse.
The “set dollar amount” of the spouse’s share of the marital portion of disposable retired pay will normally be determined by a formula award, as discussed hereinbelow.
Under Pennsylvania law, the entitlement to the present or future receipt of military disposable retired pay, to the extent the entitlement was acquired during the years of marriage, is treated as a property asset of the marriage (i.e., marital property) and is subject to division incident to dissolution of marriage.
(NOTE: Under applicable federal law, 10 USC § 1408(e)(1), “The total amount of the disposable retired pay of a member payable under all court orders * * * may not exceed 50 percent of such disposable retired pay.” So 50% of disposable retired pay is the absolute maximum that can be awarded by the divorce court to the former spouse.)
As a general rule, and in the absence of substantial reasons for not doing so, the “marital portion military spouse’s present or future entitlement to receive military disposable retired pay is deemed and treated as “marital property” for divorce purposes and is subject division between the spouses incident to the dissolution of the parties' marriage. Typically, as part of the division of marital property incident to dissolution of marriage, the nonmilitary spouse is awarded 50% of the “marital portion” of military spouse’s entitlement to disposable retired pay.
The “marital portion” of the servicemember’s disposable retired pay entitlement is typically determined by a
“formula award” expressed in the divorce decree in terms of a “marital fraction” (or “coverture fraction”).
The
numerator of the fraction is the period of the parties’ marriage while the military spouse was performing creditable military service, up to the date of the parties' separation from one another, or the date of the parties' divorce, or some other date as determined by agreement or by applicable state law. (NOTE: Pennsylvania law, as I understand it, uses the date of the parties’ separation as the cut-off date, unless the parties agree to some other date.)
The
denominator of the fraction covers the military spouse’s total period of military service creditable for military retirement entitlement. In cases where divorce occurs while the military spouse is still on active duty or still performing reserve duty, the denominator necessarily awaits future determination. The divorce decree resolves that problem by using a “formula award.”
The
“formula award” provides the basis for making the future determination of the specific “marital portion” of the military spouse’s disposable retired pay entitlement. Divorce decree language would typically read as follows:
“The former spouse is awarded a portion of the member’s future disposable military retired pay, said portion to be computed by multiplying 50% times a fraction, the numerator of which is ______ [months of service time during marriage, or number of retirement points acquired during marriage], divided by the denominator, being the member’s total number of months of creditable military service [or total retirement points] as determined at the time of retirement.” When the military spouse ultimately separates from military service, the denominator of the marital fraction is determined. The calculation is then made by dividing the marital fraction’s numerator by the denominator, resulting in the specific “marital portion” percentage. In accord with the formula set forth in the divorce judgment, when the retiree commences actual receipt of disposable retired pay, the retiree’s former spouse will then receive one-half (i.e., 50%) of the calculated “marital portion” of the retiree’s monthly amount of disposable retired pay.
For example, assume the military spouse accumulates a total of 240 months (20 years) of creditable military service for retirement purposes, of which 132 months (11 years) [assume June 1, 1997, to May 31, 2008) coincided with the years of marriage. Assume military spouse ultimately receives disposable retired pay of $2,800 p/m based on 20 years of military service. Applying the formula as spelled-out in the divorce decree, the “marital portion” would be determined by dividing the total number of months of marriage (132) by the total months of creditable military service (240). Thus, the “marital portion” would be 132/240, which is 55.0%, one-half of which is 27.5%. Typically, most divorce courts would then award the nonmilitary spouse an interest in the military spouse’s entitlement to disposable retired pay, the specific amount thereof being one-half (50%) of the “marital portion” (to be paid at such time as the military spouse commences actual receipt of disposable retired pay). Assuming the marital portion to be 55% of $2,800, the nonmilitary spouse would then receive $770 per month, being one-half (50%) of the marital portion (55%) of $2,800. Stated differently, the nonmilitary spouse receives 27.5% of the military spouse’s $2,800 monthly disposable retired pay benefit, as adjusted in the future to include a proportional amount of COLAs..
Where the entitlement to military disposable retired pay is based on service in the military reserves (or a combination of reserve service and active duty service), the calculation of the marital fraction becomes a bit tricky, particularly when the marriage and the service career do not exactly overlap. Depending on how active a reservist is, the reservist could accumulate more points before marriage than are accumulated during marriage, even though the reservist has spent more calendar time as a married reservist than as an unmarried one.
In such cases, two projections of the marital fraction should be computed --- once using marital service time divided by total service time (stated in terms of months) for retirement purposes, and then again using reserve points acquired during marriage divided by total retirement points qualifying for retirement benefits --- to determine which computation will be most advantageous. Under either calculation, the nonmilitary spouse usually receives one-half (50%) of the marital fraction times the retiree’s dollar amount of disposable retired pay.
NOTE: Typically, under the laws and procedures in most states, the “cut-off” date for determination of the marital interest, as marital property, is the date of divorce. However, if the parties agree, any other date can be used, such as the date the parties physically ceased living together, or the date of filing of the petition for dissolution of marriage. As I understand it, PENNSYLVANIA LAW uses the date of the parties’ separation from one another as the normal cut-off date.
NOTE: Time during the marriage that the parties lived apart from one another, regardless of reasons, is irrelevant. What counts is the duration of the marriage (up to the date of separation, under Pennsylvania law, irrespective of prior periods of noncohabitation.
NOTE: For YOUR CASE and for purposes of this discussion, I am going to use June 1, 2008, (date of separation) as the cut-off date for determination of the marital fraction.
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IN YOUR CASE (for example)...... Using TIME...... Based on months (rounded off) and assuming you acquire 240 months (20 years) or more of creditable military service for retirement purposes......
Total months of marriage coinciding with military service (assuming the marriage commenced May 27, 1997, and ending on June 1, 2008.: 132 months (11 years).
So....... 132/240 = .55 = 55%. One-half of 55% is 27.5%. Husband would be entitled to 27.5% of your monthly disposable retired pay benefit (as adjusted to include future COLAs as provided by law).
The following language is an example of an acceptable way to express a formula award based on months of military service:
“The former spouse is awarded a percentage of the member’s disposable military retired pay, to be computed by multiplying 50% times a fraction, the numerator of which is 132 months of marriage during the member’s creditable military service, divided by the member’s total number of months of creditable military service.”
NOTE: The marital fraction should be expressed by using whole months. If a court order is submitted to DFAS that expresses the period of marriage coinciding with military service in terms of years or days, DFAS will convert it into whole months. In doing so, DFAS will drop any odd days or partial months.
Using POINTS......Points based on a/d prior to marriage:
May 18, 1994, to May 27, 1997: Points: 1103
Points based on a/d during marriage:
May 28, 1994, to May 1, 2005. Points: 2899
Points based on reserve duty during marriage:
May 2, 2005 to June 1, 2008: 216
Total points acquired from DIEMS to divorce
(May 18, 1994, to June 1, 2008): 4218
Points (active duty + reserves) DURING marriage (2899 + 216): 3115 The following language is an example of an acceptable way to express a
reserve duty formula award.
“The former spouse is awarded a percentage of the member’s disposable military retired pay, to be computed by multiplying 50% times a fraction, the numerator of which is 3,115 reserve retirement points earned during the period of the marriage, divided by the member’s total number of reserve retirement points earned as of date of commencement of disposable retired pay.”
Comment from DFAS: In the case of members retiring from reserve duty, a marital fraction award must be expressed in terms of reserve retirement points rather than in terms of whole months. The numerator, which for reservists is the total number of reserve retirement points earned during the marriage, must be provided in the court order. Failure to list the reserve points earned during the marriage in the court order will cause the court order to be rejected. DFAS will supply the member’s total reserve retirement points for the denominator.
PROJECTION: Assumptions: 14 years of military service at time for divorce, another 6 years are needed for retirement eligibility. Assume that over the six post-divorce years, the servicemember remains in the reserves and accumulates 75 points each year. Thus, 6 years @ 75 points p/y = 450 points.
Calculation:
Total points during marriage: 3115.
Total accumulation of all points: 4668 (4218 pre-divorce + 450 post-divorce)
Marital fraction would ultimately be: 3115 divided by 4668 = .67 = 67%
Husband’s share: One-half (50%) of 67% = 33.5%
COMPARE: Husband’s share based on Time would be 27.5%
BOTXXXXX XXXXXNE: In my opinion, based on my understanding of the law and your facts, and the assumptions the necessarily have to be made, it would appear that division of the military retirement interest based on a TIME formula (132 months divided by 240 months times 50% times monthly amount of disposable retired pay at retirement) would be more advantageous method to use for the servicemember spouse.
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Some helpful resources:
10 USC § 1408(a)(4) - Definition of “disposable retired pay”:
http://www.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00001408----000-.html#a_410 USC § 12732
http://www.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00012732----000-html
“Silent Partner” Series from North Carolina State Bar: (MUST reading!)
http://www.nclamp.gov/s_milpens.pdf
http://www.nclamp.gov/s_soldiers.pdf
http://www.nclamp.gov/s_mpdspous.pdf
http://www.nclamp.gov/s_pension.pdf
http://www.nclamp.gov/s_wording.pdf
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
Higdon on Military Retirement Divorce
http://www.texasfamilylawinfo.com/docs/Higdon-Military_Retirement_Divorce.pdf
Retired and Annuitant Pay: Concurrent Retirement and Disability Pay (CRDP)
http://www.dfas.mil/retiredpay/concurrentretirementanddisabilitypay.html
Treatment of Disability Pay in Military Divorce
http://www.womansdivorce.com/disability-pay.html
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