Pension in Military Divorces: the Law has Changed
In December of 2016, every state had its own laws about how military divorces handled pensions. Most states handle all pensions the same way: by giving the spouse a percentage of the pension equal to the percentage of years-married to years-worked, divided by 2.
For example, if you worked for 20 years to earn your pension, and you were married for 5 of them (25%), your spouse would receive 25% of half of your pension, or a total of 12.5%. If you worked for 20 years and were married before you started and divorced on the day before you retired, your spouse would receive a full 50% of your compensation. This is commonly known as the “Time Rule.”
But last December, Congress passed the National Defense Authorization Act for Fiscal Year 2017, and with it, they added a Federal law that supercedes all state laws and forces military pensions to be handled in a specific way. In specific, it rewrites a portion of the Uniformed Services Former Spouses’ Protection Act. The changed law requires that the pension be divided as if the military officer had retired on the date of the court order dividing the pension between spouses.
In other words, instead of dividing the total benefit earned at retirement between the two spouses, only the benefits the military spouse has earned at the time of divorce are split. Any pension the military spouse earns after the divorce are treated as separate property. This is known as the “Frozen Benefit Rule” or “Snapshot Rule.” (So much for ‘Former Spouses’ Protection.’)
This obviously creates a significant disparity in states where the default is the Time Rule and both spouses have a pension. If the military spouse’s pension is split according to the Snapshot Rule, but the non-military spouse’s pension is split according to the Time Rule, the non-military spouse can lose out, hard.
It’s important to note that there is no wiggle-room in the new law: even if the military spouse wants to give more of their pension to their ex, the law doesn’t allow it. Whether or not the non-military spouse can be granted the ability to use the Snapshot Rule for the sake of equity will depend on the laws of each individual state — and even if the law allows it, will still be up to each individual family court judge to decide whether or not it should apply to each divorce they oversee.
There are already several lawyers penning petitions regarding this problem — some to the judiciary, some to the legislature; some to the state governments, some to the Federal government. But until the tangle gets resolved, the best a soon-to-be ‘Former Spouse’ going through a military divorce can hope for is that their state and judge are both willing to compensate for Congress’ mistake.
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