Federal retirement benefits/ court order

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PoppyA
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Federal retirement benefits/ court order

Post by PoppyA » Mon Jun 24, 2019 11:24 am

Does anyone know the answer to this question....my friend asked me, and I didn’t know...

If a spouse signed off on federal retirement benefits (to not take any) prior to divorce, can a court order change that post divorce?
“Your labor income makes you rich, not your investments.”

fabdog
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Re: Federal retirement benefits/ court order

Post by fabdog » Mon Jun 24, 2019 11:58 am

What do you mean "signed off on federal retirements (to not take any) prior to a divorce"?

Was this part of a mediated separation/divorce proceeding? A pre-nup?

Courts can invalidate items agreed to if the spouse now claims they were coerced, didn't understand, unequal power in relationship... it all depends on what it is, when created, etc...

Or was this all agreed in a divorce that was settled and now the spouse has had a change of heart? That should be harder to dislodge unless there was some fraud or bad faith dealing in the divorce process

Mike

dbr
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Re: Federal retirement benefits/ court order

Post by dbr » Mon Jun 24, 2019 12:14 pm

Do you mean the husband is already retired and the spouse signed off on the choice of rate of survivor benefits?

The situation may be explained here: http://www.federalretirement.net/survivorconcerns.htm

I am not an expert but it seems unlikely a pension choice like this can be reversed because payments that are affected by the choice have already been made.

But I am not an attorney nor an expert in Federal benefits.

Your friend needs to consult an attorney or might get an answer from OPM.

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PoppyA
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Re: Federal retirement benefits/ court order

Post by PoppyA » Mon Jun 24, 2019 12:43 pm

Thank you.

Yes, my friends spouse retired. My friend was talked into not making a spousal annuity claim at the time the retirement paperwork was submitted. They remained married for sometime, but are now divorcing.
“Your labor income makes you rich, not your investments.”

Dottie57
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Re: Federal retirement benefits/ court order

Post by Dottie57 » Mon Jun 24, 2019 12:51 pm

PoppyA wrote:
Mon Jun 24, 2019 12:43 pm
Thank you.

Yes, my friends spouse retired. My friend was talked into not making a spousal annuity claim at the time the retirement paperwork was submitted. They remained married for sometime, but are now divorcing.
This Is a good reason to get a good divorce attorney. Don’t rely on an internet forum.
Last edited by Dottie57 on Mon Jun 24, 2019 12:51 pm, edited 1 time in total.

dbr
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Re: Federal retirement benefits/ court order

Post by dbr » Mon Jun 24, 2019 12:51 pm

PoppyA wrote:
Mon Jun 24, 2019 12:43 pm
Thank you.

Yes, my friends spouse retired. My friend was talked into not making a spousal claim against the (federal employee) spouses pension. They remained married for sometime, but are now divorcing.
Right. I don't know enough about the legal standing of disputes about these claims to say more. If your friend agreed to the pension terms at the time and that is evidenced by signing off as required at the time and the payments have been in effect between then and now, then your friend would have to consult an attorney familiar with Federal retirement benefits and divorce law to get an answer.

stan1
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Re: Federal retirement benefits/ court order

Post by stan1 » Mon Jun 24, 2019 2:00 pm

PoppyA wrote:
Mon Jun 24, 2019 12:43 pm
Thank you.

Yes, my friends spouse retired. My friend was talked into not making a spousal annuity claim at the time the retirement paperwork was submitted. They remained married for sometime, but are now divorcing.
Your friends divorce attorney needs to sort this out. Sounds like your friend may have signed the paper work required by the OPM to waive a spouse's survivor benefit to the pension. That's different than a claim to part of the retirement payout while the ex is still alive and receiving retiree benefits.

pahkcah
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Re: Federal retirement benefits/ court order

Post by pahkcah » Mon Jun 24, 2019 2:09 pm

There are two separate issues here.

1. What would happen upon the Federal employee's death. Federal employees and their spouses must decide prior to retirement whether the spouse will receive a full, reduced, or no survivor annuity. For anything less than a full survivor annuity, including no annuity at all, the spouse can agree by signing the appropriate document. Unless the spouse agrees to a reduced annuity, or no annuity at all, the spouse is automatically entitled to the Maximum Survivor Benefit. At least that's the way it was when I retired under the old Civil Service Retirement System (CSRS) plan.

According to Reg Jones in FEDWeek, "If your former spouse waived the right to a survivor annuity, he or she can’t come back later and get one, even if backed by a court order. OPM won’t honor it. What’s done is done."

2. What happens with the employee's pension while he/she is still alive. Well, that's subject to whatever the husband and wife (or the courts) agree on.

pahkcah

delamer
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Re: Federal retirement benefits/ court order

Post by delamer » Mon Jun 24, 2019 2:14 pm

PoppyA wrote:
Mon Jun 24, 2019 12:43 pm
Thank you.

Yes, my friends spouse retired. My friend was talked into not making a spousal annuity claim at the time the retirement paperwork was submitted. They remained married for sometime, but are now divorcing.
To my knowledge, the decision is forego a survivor annuity is irrevocable.

Your friend still could get part of his/her spouse’s existing annuity in the divorce. But the annuity will stop once the spouse dies. Also, if there is no survivor annuity then your friend cannot continue on the FEHB once his/her spouse dies (regardless of whether they are married or not).

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CAsage
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Re: Federal retirement benefits/ court order

Post by CAsage » Mon Jun 24, 2019 2:18 pm

The divorce asset split would probably consider all assets... but cannot (probably) change a prior contract. Maybe a larger share of other assets to compensate? Longer spousal support? All is open for division in divorce.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

Dottie57
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Re: Federal retirement benefits/ court order

Post by Dottie57 » Mon Jun 24, 2019 2:38 pm

CAsage wrote:
Mon Jun 24, 2019 2:18 pm
The divorce asset split would probably consider all assets... but cannot (probably) change a prior contract. Maybe a larger share of other assets to compensate? Longer spousal support? All is open for division in divorce.
This.

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Watty
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Re: Federal retirement benefits/ court order

Post by Watty » Mon Jun 24, 2019 2:45 pm

pahkcah wrote:
Mon Jun 24, 2019 2:09 pm
There are two separate issues here.

1. What would happen upon the Federal employee's death. Federal employees and their spouses must decide prior to retirement whether the spouse will receive a full, reduced, or no survivor annuity. For anything less than a full survivor annuity, including no annuity at all, the spouse can agree by signing the appropriate document. Unless the spouse agrees to a reduced annuity, or no annuity at all, the spouse is automatically entitled to the Maximum Survivor Benefit. At least that's the way it was when I retired under the old Civil Service Retirement System (CSRS) plan.

According to Reg Jones in FEDWeek, "If your former spouse waived the right to a survivor annuity, he or she can’t come back later and get one, even if backed by a court order. OPM won’t honor it. What’s done is done."

2. What happens with the employee's pension while he/she is still alive. Well, that's subject to whatever the husband and wife (or the courts) agree on.

pahkcah
+1

I would suspect that they may have signed off on getting survivor benefits in exchange for getting a larger pension while the spouse is alive. How that would affect what happens in a divorce is a different matter that would take a lawyer to straighten out and that may depend on the state law.

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CAsage
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Re: Federal retirement benefits/ court order

Post by CAsage » Mon Jun 24, 2019 7:05 pm

Dottie57 wrote:
Mon Jun 24, 2019 2:38 pm
CAsage wrote:
Mon Jun 24, 2019 2:18 pm
The divorce asset split would probably consider all assets... but cannot (probably) change a prior contract. Maybe a larger share of other assets to compensate? Longer spousal support? All is open for division in divorce.
This.
Now that I've had a bit longer to think... There is no way you can revisit the old contract. Just think of the absolute chaos that would happen if people could get a do-over on contracts. However.... state laws come in big here. QDRO's are definitely applicable, as in, depending on your state laws, each spouse is entitled to a chunk of any retirement assets. So need the divorce lawyer to look into splitting that annuity, but it will still end when the person dies. And I'm sure it was to get a higher payment up front ... always the choiceS!
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

ChrisC
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Re: Federal retirement benefits/ court order

Post by ChrisC » Mon Jun 24, 2019 9:21 pm

There are different Federal retirement benefits: pension/annuity under CSRS or FERS, FEHB health insurance coverage, FEGLI life insurance, TSP/401K plans, and lump sum/residual benefits. But selections by the employee or retiree are not really "irrevocable;" they can be thrumped or essentially changed or directed by a Court Order. But you need competent counsel and the right Court Order to change benefits that might have been selected by an employee or retireee. The lawyer should be familar with the nuances of Federal retirement benefits and the precise documentation and Order one needs to satisfy the Office of Personnel Management. One has to be very careful here. The lawyer should be following this guide issued by OPM: https://www.opm.gov/retirement-services ... 38-116.pdf

By the way, a divorce can, in and of itself, result in changing retirement selections made by an employee: an employee or retiree who selected a survivor annuity for his spouse can simply file his Final Divorce Decree with OPM and the survivor annuity is wiped out -- we did this for my BIL. Additionally, irrespective of an employee's or retiree's selection of health benefit coverage for his spouse (unless I think the covered spouse is a Federal employee or retiree), divorce also wipes out that coverage and the divorced spouse has to apply for separate spousal coverage, which I don't think carries the same Federal subsidized premium payment.

One other thing to keep in mind; some Federal agencies, like the State Department's Foreign Service or the Federal banking agencies, might augment government-wide benefits with additional benefits. For instance, some have separate 401k plans, in addition to TSP, separate dental insurance plans, generous retirement relocation benefits, or additional term life insurance. So, changing benefits might require consulting HR departments in those agencies in addition to satisfying OPM driven Court Order specifications.

IMO
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Re: Federal retirement benefits/ court order

Post by IMO » Mon Jun 24, 2019 10:39 pm

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Topic Author
PoppyA
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Re: Federal retirement benefits/ court order

Post by PoppyA » Tue Jun 25, 2019 9:38 am

ChrisC excellent find! Thank you.
“Your labor income makes you rich, not your investments.”

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