Big Change in Military Pension Divisions Coming

Division of Military Pensions in Divorce.


Division of Military Pensions in Divorce.

I wonder how many readers have heard of the “National Defense Authorization Act of 2017”?  It sounds like a typical, mundane money authorization bill which we see so many times each year.

But if you’re in the military and are married, or the souse of a military member, and divorce even remotely comes across your mind, you better listen up.

And if you’re an attorney who handles military divorces and division of assets in divorce, this might be big.

How It Is Now

At the time this article is written, division of military pensions in a divorce is handled by state law and almost always involves giving the non-military spouse a percentage share of the military member’s pension (annuity) when the military member retires.

This is long-established practice and well-regarded by most state courts to be an equitable way to divide the pension as part of the couple’s assets.

Built In Inflation Proofing

Division of Military Pensions in Divorce.As a built-in form of protection to the non-member spouse the court order to divide the pension will be calculated into a dollar amount when the military member retires.  This protects him or her if the member gains substantial rank, time in service and time in grade (all of which control the members final retirement entitlement)before s/he actually retired.

In other words if the court awards the non-member spouse a 50% share of the annuity, s/he gets 50% of the members retirement pay upon the member’s retirement.

It Ain’t That Way No More

Under the 2017 authorization bill, the states will only be able to order a percentage based on what the member would earn if s/he retired on the date of the divorce.  Wow.

Good For Some

If you’re the military member in the divorce proceedings, this could be a really good thing.  Might save you a LOT.  Imagine if you divorce as, say an E-6 with 10 years service, but finally retire as an E-9 with 30 years service?  Your ex still gets her percentage, but it will be the percentage of an E-6 with 10 years service.  Big reduction.

Not So Good For Others

If you happen to be the non-military divorcing spouse though, this could be devastating news.  Without even any public comment period, Congress has just cut the pension you could be sharing in as much as half or more.  My guess is, President Trump is going to sign this bill into law as quick as it hits his desk.  Hope I’m wrong.

For Attorneys

If you’re an attorney who represents parties in a military divorce case,  better bone up on this right away.  It’s the biggest change of its kind in this business in many a year.  Don’t get caught flat-footed.

Full information here:
Provisions in National Defense Authorization Act would cut retirement benefits for former military spouses

Anything else I should write about along the lines of Division of Military Pensions in Divorce?

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