Federal Retirement Benefits for Divorced Spouses

By Heather Frances J.D.

Divorce can impact various types of retirement benefits, making some retirement savings accounts eligible for division and effecting the divorced spouse's eligibility for others. Federal retirement systems generally permit state courts to split federal pensions as part of a divorce, but survivor benefits and Social Security benefits have special rules.

Splitting Federal Benefits

As with other retirement benefits, a state court can divide federal benefits at the time a couple divorces. This includes federal retirement systems, thrift savings plans and military benefits. The amount of benefit given to each spouse can vary by state law based on the circumstances of the divorce and how long the spouses were married while the benefits were being earned. For example, spouses who were married for most of the federal employee's working years might be more likely to see an equal split of benefits. Spouses can agree to a method of splitting the benefits or let the court decide the issue.

Valuing and Distributing Federal Benefits

It can be difficult to determine a value for federal retirement benefits, particularly when the benefits are not fully earned or when the spouses were married for only a short time while the benefits were being earned. For example, the employee spouse's monthly contributions may not directly relate to the value of the pension he will ultimately receive. Divorcing spouses can hire a financial expert to analyze their situation and appropriate valuation methods. Benefits typically must be divided through a Court Order Acceptable for Processing, which is similar to a Qualified Domestic Relations Order required to divide other types of retirement plans. These orders are not identical, however, so it is important to ensure that each plan's order appropriately divides the benefits.

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Survivor Benefits

The federal retirement system offers employees the option to sign up for survivor benefits to be paid to the surviving spouse when the employee spouse's benefits are discontinued due to his death. Employees generally elect these benefits at the time of retirement -- and a divorce decree can order the employee spouse to pay for the survivor benefit for the non-employee spouse. The federal retirement systems allow some survivor benefit adjustments as a result of a divorce. Courts can also order the employee spouse to purchase life insurance to compensate for the financial loss to his ex-spouse if he dies first.

Social Security

A divorce court cannot divide Social Security retirement benefits. These benefits are based on federal rules. A divorced spouse can collect Social Security benefits based on her retired ex-spouse's earnings record if the marriage lasted at least 10 years and the spouse seeking benefits is unmarried and at least age 62. Further, the benefit the spouse would receive based on her own work history must be less than what she would receive based on her ex-spouse's work history -- and the working ex-spouse must actually be entitled to Social Security retirement or disability benefits.

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Divorce Laws and State Pension Plans in Oklahoma
 

References

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California Divorce Law & Pensions

Because California is a community property jurisdiction, upon divorce, each spouse is entitled to half of all "community" property acquired during the life of the marriage. This rule applies to pensions; however, the issue is complicated due to the difficulty of determining how and when a pension was earned.

Divorce Laws in Indiana Concerning Pensions

When Indiana spouses divorce, they can agree about how they want their property divided or the court will divide it for them. Either way, a spouse’s pension may be considered an asset divisible in the divorce according to Indiana law. When the pension is divisible, the court must issue the proper orders to effectively transfer part of one spouse’s pension rights to the other spouse.

About Ohio Divorce Laws & PERS Benefits

You may not consider your retirement benefits as assets, but Ohio law does. If you divorce in Ohio, the court can divide your retirement benefits, including benefits you earned under the Public Employees Retirement System (PERS). The judge will award a portion of your PERS benefits to your spouse, even if you are not currently receiving benefits because you have not yet retired.

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