For those working in the U.S. Civil Service, a retirement system has been in place in some form since 1920, which is the date from which the “old” system, “Civil Service Retirement System” (“CSRS”), or those who began service before January 1, 1984, can be traced.
The retirement system is essentially a defined benefit plan, which takes into account years of service and highest salary in determining a monthly sum to be paid to an employee from the date of retirement until death. The entire system was altered for incoming employees in a “new” system labeled the “Federal Employees’ Retirement System” (“FERS”), for those who began service on or after January 1, 1984.
In 1992, sweeping changes were made to the regulations governing the division of Civil Service retirement benefits, making virutally every prior reference on the subject out of date, and potentially dangerous to clients if relied upon. A court order dividing Civil Service benefits is called a “Court Order Acceptable for Processing” (“COAP”). Any COAP should provide orders dealing with each of the the three types of benefits addressed in the “Office of Personnel Management’s” (“OPM”) detailed regulations: (1) the lifetime benefits (“employee annuity”); (2) the potential refund of employee contributions; and (3) death benefits (“former spouse survivor annuity”).
A “Thrift Savings Plan” (“TSP”) was also created at the implementation of FERS. The TSP is a defined contribution type of plan for federal employees; FERS employees get matching federal contributions up to a certain level. While the TSP program is open to CSRS employees, there are no matching contributions for them. It is expressly excluded by the regulations governing the CSRS and FERS retirement benefits. There are no “survivorship” benefits, per se, for a TSP account, as it is a cash plan like a 401(k). A TSP account can generally be divided in a COAP, but regulations do allow for the submission of a completely separate order dividing a TSP account under the title of a “Retirement Benefits Court Order” (“RBCO”).
The rules and regulations governing the division of Civil Service retirement benefits are fairly draconian, and great care must be given when drafting a COAP or RBCO. The attorneys and staff at QDRO Masters have been writing COAPs for over two decades. We have the experience and skill to avoid the pitfalls associated with drafting federal orders.