You served in the military for years, and you’re looking forward to retirement. Life changes such as divorce and remarriage can affect your pension. The intersection of civilian law and military rules can be confusing, especially when it comes to a Qualified Domestic Relations Order (QDRO). Your pension is your financial future, so you need to know what’s going to change. Read our overview about how a divorce and remarriage relates to your military pension.
Qualified Domestic Relations Order (QDRO)
A qualified domestic relations order (QDRO) is a judicial order pertaining to the division of property in a divorce. It divides a pension plan, including a military pension, by recognizing the former spouse’s share of the asset. It awards a part of the plan’s participant to another payee; in this case, the ex-spouse.
QDROs are issued by a State domestic relations court. Then they are reviewed for compliance with the terms of the order and other applicable laws. A QDRO may be part of a divorce decree or it may be a separate document. The order is valid as long as it meets qualified domestic relations order standards and the standards of the plan in question.
The 20/20/20 Divorce Rule
When dealing with pensions and how they are affected by divorce or remarriage, it also helps to understand something known as the 20/20/20 rule. This policy affects military spouse divorcees and establishes a qualification of benefits. The rule states that ex-military spouses are entitled to keep certain military benefits under the following conditions:
- The former service member spent at least 20 years in service
- The couple was married for at least 20 years
- The couple’s marriage overlapped the member’s military service by at least 20 years
Under the 20/20/20 rule, former spouses of military members are eligible to receive Tricare benefits, commissary privileges and MWR after a divorce.
Military Pensions Are an Exception
Although the 20/20/20 rule covers many benefits, a military pension is not controlled by the Department of Defense. Civilian state courts make determinations about military pensions because they are considered to be a “marital asset” and not a military benefit. Therefore, these pensions are deemed part of all other financial assets that would be awarded in the event of a divorce.
During a divorce, the court decides how to divide a military pension. All the typical factors are considered for dividing assets, such as income, whether the ex-spouse can work or is disabled, and assets accrued jointly during the marriage. The courts then determine the amount of the pension to divide.
The Uniform Services Former Spouses Protection Act
The Uniform Services Former Spouses Protection Act is the federal statute that orders states to treat military pensions as an asset and governs the conditions for dividing a pension in the event of a divorce. Prior to 2017, state courts could split a military pension an even 50-50 based on the value of the pension at the time of the servicemember’s retirement.
The dollar amount was based not on the rank at the time of the divorce, but on the rank the member achieved at the time of retirement. So your ex-spouse would receive half of the pay you earned for staying in the military for an additional 10 years after the divorce.
New Revision to the Rule
However, the rules for calculating pension awards changed in 2017, as a result of the previous rule often being an unfair burden on servicemembers. Under the 2017 Rule, dividing a military pension in a divorce is based on the rank and member’s time in the service at the time of the divorce, in addition to a Cost of Living Adjustment. It is no longer based on the total time in service.
As an example, suppose someone divorces their military spouse after the person has put in 10 years of service. The ex-spouse will receive 50 percent of the military pension for an O-3 level servicemember, including a Cost of Living adjustment. The pension value will remain at that level, even if the member retires as an O-5 with 20 years total service.
It is important to note that the 2017 ruling is not retroactive. The change only applies to divorce decrees finalized after the enactment of the Act.
Effects of Remarriage on a Military Pension
One of the most common questions regarding a military pension is, “If I remarry, do I lose the pension I get from my spouse?” There is a common misconception that the answer to this question is “yes”; however, that is incorrect. This assumption is based on the Former Spouse Survivor Benefit Plan (SBP) awards but has nothing to do with pensions and remarriage.
Even if the former spouse remarries, military pension payments continue, regardless of how the remarriage changes the ex-spouse’s financial standing. As mentioned previously, a former spouse’s military pension payment is an asset right: it is unaffected by any subsequent remarriage. The share of retired pay awarded to an ex-spouse only terminates in one of two ways: the former spouse dies or the servicemember dies.
The Former Spouse Survivor Benefit Plan (SBP)
A Former Spouse SBP is an annuity purchased by a servicemember to provide an alternate source of income in case the service member dies and the military pension stops. If an ex- spouse remarries before the age of 55, eligibility is suspended for Former Spouse SBP. This is the cause of the blurring of the rules regarding former spouse military pensions.
It is essential not to confuse these two sources of former spousal income. It is also crucial to note that if the subsequent marriage of the former spouse ends by annulment, divorce or death, eligibility for the Former Spouse SBP is reinstated.
Experienced QDRO Attorneys
At QDRO Masters, our goal is to ensure that you know your rights. This guide to military pensions takes the confusion out of divorce and remarriage pension rules. Our trusted legal team knows it’s not always easy to understand domestic orders. Visit our website for more information on military pensions. We will gladly answer your questions and can draw up any legal documents you need. Stop by our Las Vegas office at 3591 E. Bonanza Road, Suite 200 or call us at (702) 438-4100 today to schedule an appointment.