'Radical' proposal would change the way retired pay is divided in divorce cases

Former spouses might get a smaller share of a military member's monthly retirement pay if Congress passes legislation that some are describing as a “radical rewrite” of the law regarding the division of marital assets when military couples divorce.

It would require state courts to award payments to ex-spouses of service members based on the rank and years of service at the time of divorce — not the rank and years of service at the time of retirement, as is currently the case. In some cases, it will mean the spouse will get a smaller share of the service member’s monthly retirement.

“We’re trying to protect warriors out there fighting for our country. We see a lot of marriages failing, unfortunately, and we want to make sure warriors have benefits at the end of the trail,” said Rep. Steve Russell, R-Okla., who introduced the legislation in the House to amend the Uniformed Services Former Spouse Protection Act.
He gave the example of a constituent in Oklahoma who served for 35 years in the Air Force, and was divorced from his first wife after two years of marriage, in the first years of his career. The former spouse was able to receive half of his retirement pay based on those two years of marriage. Given that the service member’s current wife had been married to him for more than 30 years, “it’s just not equitable” that the former wife would receive that much of the service member’s retirement pay, Russell said.

Russell, a retired Army lieutenant colonel, said his proposal has nothing to do with him personally, noting he has been happily married to his wife for 35 years, and they moved 15 times during his 21-year career.

He tried to address the problem when he was a state senator in Oklahoma, he said, but was unable to because of conflicts with the federal law. But state legislation adopted encouraged state judges to consider the service member's rank and time of service in their decisions.

He said the response to the proposal has been “absolutely overwhelmingly positive,” although people have complained that the proposal would not be retroactive.

Some attorneys oppose the proposed changes, including the American Academy of Matrimonial Lawyers Board of Governors, which adopted a resolution against in June 24.

An AAML report on the issue stated that virtually all states have adopted the rule of division of retirement based on the rank and years at the time or retirement, because “of all the options available, it comes closest to doing equity in the greatest number of cases to everyone affected."

“It is used for all defined benefit pension plans, including military pension cases.”

Mark Sullivan, a retired Army colonel in the Judge Advocate General's Corps who is a family law attorney in Raleigh, North Carolina, and specializes in military divorce, described the proposed change as a “radical rewrite” of the Uniformed Services Former Spouse Protection Act. He noted that the current system allows division of the retirement pay based on state law, and that there is no federal formula, giving states more latitude to deal with individual divorce cases.

The proposed revision “would torpedo this ‘state law approach,’" he said. “It would reserve all power to the federal government on how the pension should be divided.”

The Former Spouses Protection Act doesn’t give former spouses an automatic entitlement to any portion of service members’ retirement pay; that’s decided by state law. But the federal law allow state courts to consider military retirement pay as part of the property that can be divided in a divorce.

“By freezing the benefit to be divided at divorce, rather than the actual retired pay of the service member, this proposal would cause great harm to spouses and former spouses going through separation and divorce, people that have sacrificed their careers and their own retirement, with the hope of sharing the military member’s final retired pay — or, upon divorce — of getting a fair share of that actual retired pay, not a benefit frozen in time for years before,” Sullivan said.

The proposed new approach “completely ignores the ‘marital foundation theory,’ which recognizes that the individual’s final retired pay is based on a foundation of marital effort,” he said.

Some military family advocates are in favor of the change, as long as it corresponds to the Senate version of the bill. That provision would allow payments to former spouses based on rank and years at the time of the divorce — but that amount would be updated to reflect the current pay table for someone with the same rank and years of service as that retired service member was when he or she retired.

In other words, if the service member retires as a colonel with 30 years of service — 14 years after the divorce when he was a major with 16 years of service — the payments to the former spouse should be based on the current pay table for a major with 16 years.

Spouses' retirement benefits, such as their 401(k) plans, can also be divided as part of a divorce, as can the service member's Thrift Savings Plan. “My biggest concern is spouses being abandoned and not being able to afford an attorney, and not getting anything at all,” said Kelly Hruska, director of government relations for National Military Family Association.

The idea of using the paygrade and years of service at the time of divorce rather than the time of retirement has long been proposed, and NMFA has been OK with the idea as long as the former spouse benefits from increases in the pay table approved by Congress, said Joyce Raezer, executive director of the association.

Defense Department officials also recommended that approach in their September 2001 report to Congress on changes to the Former Spouse Protection Act, which was enacted in 1982. “The objective in this regard should be to provide the former spouse, on a present value basis, with approximately the same amount,” the DoD report stated.

This approach is reflected in the Senate version of the bill, but not the House version. Members of the House and Senate Armed Services committees are negotiating the differences in the bills.