Military pensions seem complicated – and often because they are. A whole host of federal regulations govern the qualification and disposition of military pay and pensions. In this post, we will look at one interesting aspect – pre-marital military service years.
In order to qualify for a full military pension, a servicemember must have 20 years of active service. After accruing those 20 years, that servicemember, at retirement, pays out for the rest of that person’s life. Under the Uniformed Services Former Spouses Protection Act, a former spouse of a servicemember can collect up to half of the servicemember’s retirement pay so long as the former spouse had been married for at least 10 years of those active duty years.
What happens when a servicemember leaves the military before the 20 year vesting? If that servicemember becomes a federal government employee, something interesting happens: if the servicemember has a total of 20 years of federal employment, that servicemember qualifies for a full government pension. Further, if that servicemember chooses, that person can pay a certain sum into the pension so that all the unused military years can count in the federal pension – a potential windfall of thousands of dollars a month, depending on the pay grade and the years of unused service.
Now, suppose that all of the years of service took place before marriage. During the marriage, the servicemember spouse makes the payments to buy those unused years into a federal pension. When the servicemember retires, that person’s pension will now include the increase for the unused service years. After making these payments but before retiring, the servicemember divorces. What benefits would the former spouse be entitled to?
Under most recent case law, the former spouse would be entitled to the marital portion of the federal pension, but at the full rate of the pension, including the pre-marital years of military service. Why? The courts consider the payments made to count the pre-marital service years as federal service years as marital property because they came from marital funds. As such, the former spouse should share in the benefit it bought.
If you are the spouse or former spouse of a servicemember, it is important to know the full extent of your rights to your spouse’s or former spouse’s retirement benefits.
If you have questions about military retirement benefits and divorce, contact us – we can help.