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Dividing Retirement Funds in a Military Divorce

by Norris Law Group on October 9, 2014

Dividing Retirement Funds in a Military DivorceEarlier this week, this blog series covered the rights of men and women who divorce spouses in the military under the Uniformed Services Former Spouse Protection Act (USFSPA, the rights of service members who divorce as outlined in the Servicemember’s Civil Relief Act (SCRA), and how military pensions are divided between military couples who divorce. In this edition, we examine the various methods used to calculate the percentages of a military pension to which each spouse may be entitled. This information is taken from an article that first appeared on Military.com.

Since different methods are used to calculate the percentage of a pension that each ex-spouse will receive, court documents must clearly state the formula used to determine the payments. The length of the marriage is one of the primary considerations.  Typically, the US military counts the amount of points toward retirement that were accrued during the marriage rather than how many months the marriage lasted. This method is very often used for couples with one or both spouses are in the Reserves.

Three methods are used to determine retirement payments:

  1. Net Present Value. This method is commonly used if one spouse prefers an “up-front” buyout.
  2. Deferred Distribution.  Payments are calculated at the time of the divorce, but disbursement of the payments is deferred until the service member retires.
  3. Reserve Jurisdiction. The former spouse’s payment is calculated when the service member retires. This is the most common method.

Thrift Savings Plan (TSP)

Military thrift savings plans (TSP’s) are viewed as a civilian 401(k), but certain requirements must be met in the court order that are different from a division order that would apply to a civilian retirement division order.  See the TSP website for more information.

Survivor Benefits Plan

While some military spouses believe that if they are the beneficiary of a Survivor Benefit Plan (SBP) during the marriage, this will be true after a divorce. This, however, is not the case. The Survivor Benefit Plan must be directly addressed in the final divorce decree.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

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