Federal Retirement Benefits Bench Card

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Vocabulary
  • CSRS = Civil Service Retirement System, precursor plan to FERS. Only minor differences between the plans and they are divided by the same DRO.
  • FERS = Federal Employee Retirement System, pension plan for federal employees.
  • COAP = Court Order Acceptable for Processing, a DRO for FERS/CSRS.
  • OPM = Office of Personnel Management, the federal agency that processes and implements COAPs.
  • FSSA = Former Spouse Survivor Annuity, survivor benefit plan for FERS/CSRS.
  • TSP = Thrift Savings Plan, a defined contribution plan in which the vast majority of federal employees participate.
  • RBCO = Retirement Benefits Court Order, a DRO for TSP.
Federal Retirement Basics
  • FERS/CSRS
    • Generally divided via the time rule formula.
    • Out-spouse must wait for in-spouse to retire to receive their share from the plan.
    • OPM does not provide preapproval for draft DROs.
    • Not possible to place a hold on the pension with a Notice of Adverse Interest or Joinder; OPM will reject both.
  • TSP
    • Does preapprove draft DROs.
    • Notice of Adverse Interest will place a hold on the benefits.
    • The appropriate time for the parties to conduct discovery and make claims about separate property in retirement benefits is pre-trial, not after Judgment or when the DRO process begins. Pursuant to In re Marriage of Mix, the in-spouse bears the burden of proof regarding separate property in their retirement plans.1
    • Assuming they can prove it up, an in-spouse’s premarital separate property interest includes not just the funds in the account as of the date of marriage, but also gains/losses on those premarital funds accrued during the marriage.
FERS DRO Processing
  • Certified copy of the DRO must be served on OPM with a certified copy of the Judgment.
  • It takes OPM at least a year to process DROs.
  • Correspondence from OPM is very challenging for most litigants to understand.
Former Spouse Survivor Annuity (FSSA)
  • FSSA are pension payments made to the out-spouse after the in-spouse's death. From the plan’s perspective, these are a separate benefit from the pension payments made during the in-spouse's life.
  • First Order Rule: FSSA benefits must be included in the first order dividing the federal pension.2
    • If the Judgment does not award survivor benefits and if the in-spouse retires or dies before the DRO is completed, it is almost impossible for the out-spouse to obtain survivor benefits.
    • If Judgment does not award the FSSA, DRO may still be able to award the benefits so long as the in-spouse has not retired or died.
    • First order cannot be amended nunc pro tunc to provide for survivor benefits.3
  • Even if it is properly awarded, the out-spouse will lose the FSSA if they were married to the in-spouse for fewer than 30 years and remarry before reaching age 55.4
Federal Employees Health Benefits (FEHB)
  • DRO can award the out-spouse continued coverage under the Federal Employees Health Benefits (FEHB). To be eligible, out-spouse must meet several requirements, including being enrolled at any time during the 18-month period before the date of divorce.5
  • The out-spouse must submit an enrollment application within 60 days of the dissolution of marriage.6
Railroad Pension
  • Railroad Retirement Board Pension Plan has two benefits:
    • Tier 1
      • Calculated same way as Social Security benefit & is reduced by amount of any Social Security benefit received.
      • Is NOT divisible.
    • Tier 2
      • Based on retirement credits, similar to private employer pension plans.
      • Is divisible between spouses and can be payable for life of out-spouse even if they outlive the in-spouse.
  • Like with FERS, it is not possible to place a hold on the pension with a Notice of Adverse Interest or Joinder.

1 In re Marriage of Mix (1975) 14 Cal.3d 604.

2 5 C.F.R. § 838.1004(e)(1)(ii).

3 5 C.F.R. § 838.806(e).

4 U.S. Office of Personnel Management, Court Ordered Benefits for Former Spouses (RI 84-1, rev. July 2014) p.5.

5 5 U.S.C. § 8901(10).

6 5 U.S.C. § 8905(c)(1).

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This resource is provided by the California Access to Justice Commission through its State Legal Aid Infrastructure & Innovation Grant.