Federal Employee Retirement Vs. Divorce

Jul 31, 2013

Federal Employee Retirement Vs. Divorce

If federal employees finds themselves in the situation of a divorce, there may be some financial concerns associated with their work that shouldn’t be disregarded. Along with the tough emotional issues that must be overcome during a divorce, federal employees must also start thinking about their legal rights to financial assets and maintenance related to their work. Because of a divorce, federal employees must begin to consider not only the right to their expected retirement, but also the right to retirement benefits they didn’t expect – their Office of Personnel Management (OPM) Federal Disability Retirement.

Understanding the Impact of Divorce on Federal Disability Retirement Benefits

At the beginning of federal employment, employees typically enroll in a Civil Service Retirement System (CSRS) or Federal Employees’ Retirement System (FERS) retirement program. Generally, this retirement program, which accrues throughout their work life, overlaps with a marriage and sometimes a divorce. Under the U. S. Code of Federal Regulations, Title 5, Section 838.101 (a) (1); if a divorce decree awards a portion of the federal employee’s CSRS or FERS retirement benefit, the OPM must comply with this decree. Divorces, marriage annulment, and legal separations of members, employees, or retirees of CSRS and FERS are all included under this code.

The OPM should receive a copy of the divorce decree official court order to ensure that the order was created in an acceptable manner. Because of this, it is important that the divorce decree includes the proper clarification of any asset award. For instance, the decree may state that a former spouse or survivor should receive the same amount they would have received if the marriage had never ended. In which case, the OPM must comply with this court order.

It is notable that should the federal employee leave their federal job and die before retirement that no survivor annuity be paid. In a situation like this, only a refund of contributions is to be paid; and this goes to the person named as a beneficiary (or close relatives if no beneficiary is named).

Importance of Legal Guidance during Divorce

It is important to get these matters squared away at the time of a divorce. Having a divorce lawyer that is competent in matters of federal employee retirement benefits and rights will save time and effort trying to amend court orders. It is both difficult and expensive to do this and may sustain unintended consequences between you and your ex-spouse. Planning early for retirement rights is overall beneficial in the long run in case of divorce.

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