Federal Employee Divorce IN KANSAS CITY

When A Federal Employee (or Their Spouse) Needs a Divorce

An entire sub-specialty of family law is knowing about federal employees and the benefits that they receive. Divorce is always a detailed, complicated and intricate division of the parties’ unique assets. The question of how their benefits are received (and in fact, what constitutes a benefit of value that can be divided) is a complicated topic. How are various federal benefits affected by divorce? If you are a federal employee, or the spouse of a federal employee, it is important that you work with a knowledgeable and experienced family law attorney so that your benefits are fairly and accurately accounted for, and divided as appropriate.

If your spouse is a federal worker, many people want to know whether they have an opportunity to keep or maintain any of their federal benefits after a divorce.

What is the Law Governing Federal Employee Benefits?

An entire sub-specialty of family law is knowing about federal employees and the benefits that they receive. Divorce is always a detailed, complicated and intricate division of the parties’ unique assets. The question of how their benefits are received (and in fact, what constitutes a benefit of value that can be divided) is a complicated topic. How are various federal benefits affected by divorce? If you are a federal employee, or the spouse of a federal employee, it is important that you work with a knowledgeable and experienced family law attorney so that your benefits are fairly and accurately accounted for, and divided as appropriate.

If your spouse is a federal worker, many people want to know whether they have an opportunity to keep or maintain any of their federal benefits after a divorce.

Are All Federal Employee Retirement Benefits the Same or Different?

They are all different. Simply because a lawyer is familiar with one type of federal retirement benefits does not mean that he or she has familiarity with your specific program. The programs can vary vastly from one another.  For example, some of the federal plans restrict the former spouse (non federal employee) from remarrying until they are a certain age. If they remarry prior to that time, they risk losing their benefits. The age restrictions and the requirements can vary by individual plan. It is important to work with an attorney who understands federal pension. 

What are FERS retirement benefits?

FERS is a three-tiered retirement program for United States federal civilian employees. A federal worker’s ability to receive retirement benefits is determined based on the employee’s age and years of service and they are generally enrolled in the program automatically when they begin their federal employment. 

Retirement benefits for FERS generally come from three separate sources. The first is a Basic Benefits Plan, which is a traditional pension plan/program. The second tier is social security benefits, and the third benefit is a Thrift Savings Plan, which is fairly similar to a 401k retirement account. These benefits are paid to the employee on a monthly basis after they leave government service and become retired, assuming qualification criteria have been met. 

How is a Federal Employee’s FERS Retirement Benefits Divided?

Monthly FERS benefit payments can be either partially or fully marital, meaning that they can be subject to division during a divorce or dissolution of marriage. The amount of time that a federal employee’s service overlaps with their marriage is the predominant/significant determining factor for the other spouse’s/former spouse’s share. When a properly prepared order is entered and provided to OPM (office of personnel management), they can then pay the former spouse their share of the federal pension directly to the former spouse so the federal employee does not have to process ongoing retirement money/payments received.  The settlement/court order can be structured as a flat, one-time sum or as monthly payments. The payments cannot be more than the amount the federally employed spouse has actually received. 

The marital share of the federal pension is the number of months between when a federal employee becomes married, while simultaneously working their federal job/employment. Generally this period of time is divided by the federal employee’s total number of months of service/employment for the federal government. This fraction determines the marital portion of the federal benefits earned and then usually, the alternate payee/non-federal employee spouse, is entitled to a 50% share of the marital portion of the federal benefits. 

If the federal employee is still employed by the federal government at the time of the divorce, a Court Order Acceptable for Processing (COAP) needs to be entered and kept on file with OPM (office of personnel management) until the federal employee actually retires. Once the total number of service months are tallied, the marital share can then be calculated with the above-referenced fraction. The spouse’s share of the retirement benefit will begin at the same time that the federal employee begins receiving their retirement payments. 

A spouse is also able to be designated as the beneficiary of a federal employee’s survivor benefit plan, which protects the spouse in the event the former employee passes away while the payments are in pay status. 

In order for federal benefits to be divided an appropriately prepared court order must be entered. If the court order is not prepared correctly, it could result in the necessity of another court process to get the order corrected/appropriately prepared. 

How is a Thrift Savings Plan Divided? 

Federal employees can make an election to participate in a Thrift Savings Plan. This allows the employee to contribute payroll deductions that go into an investment account, with the funds being specifically invested in the investment options that the federal employee selects. The money the federal employee contributes to his or her TSP plan during the marriage is considered marital property and is divided by a Retirement Benefits Court Order (RBCO). 

The former spouse (non-federal employee) can obtain their share of the TSP plan by obtaining a distribution, i.e. a payout from the TSP, which results in a direct transfer to a different/alternative retirement account, or a combination of these options. The spouse will not be required to wait until the federal employee retires to receive their share of the TSP. Instead, the transfer can happen immediately/quickly upon the divorce being finalized. 

How Does a Divorce Affect Federal Employee Health Benefits?

A federal employee’s former spouse is not permitted to remain on the employee’s medical, vision or dental insurance coverage after the divorce has been finalized. However, if the former spouse is not a federal employee, they will be given a 31-day extension of FEHB (federal employee health benefits) coverage when they lose their coverage due to losing status as a family member.  During this extension period, the former spouse may elect to convert their benefits to an individual contract or remain insured on FEHB coverage using the Temporary Continuation of Coverage (TCC) provisions outlined by FEHB law. TCC is similar to what people think of as COBRA coverage and allows continuation of insurance benefits through a contract/payment of costs for 36 months. 

In situations where the former spouse is entitled to a portion of the federal employee’s annuity or survivor annuity, they have 60 days from the date the divorce decree/court order is entered to send a written request to the federal employee’s agency for FEHB coverage under the Spouse Equity Law. The federal employee dental and vision insurance programs end on the date of the divorce and there are no provisions or programs that allow them to be extended or continued.  

In some situations, generally as the result of a negotiation between the parties, in lieu of the non-federal employee spouse receiving their portion of the FERS retirement benefits, they are given alternative assets of equal value such as real estate or bank account money to offset the value of the FERS. This an be somewhat difficult to effectuate as it can be difficult to determine a cash value of the FERS program, particularly if the employee’s number of continued years of employment is unknown. 

How is FEGLI (Federal Employee Group Life Insurance) affected by Divorce?

For a federal employee, it is important that they change the beneficiary on their policy if they no longer wish for their former spouse to receive those benefits. In other cases/situations, the divorce order or judgment may require (either by order or agreement) that a federally employed spouse assign their FEGLI policy benefits to the former spouse. 

Schedule your Consultation Today!

If you are a federal employee, or the spouse of a federal employee, and you believe a divorce will be necessary, it is important to skillfully navigate addressing and dividing your federal benefits and assets. Pingel Family Law is licensed in both, Kansas and Missouri and we have the privilege of being knowledgeable in federal employment issues so that we can skillfully and expertly assist our clients in completing their family law process cost efficiently and time efficiently.  Our firm prides itself on finding solutions to even the most challenging family law situations. To schedule your consultation with one of our skilled attorneys, please call Pingel Family Law at (816) 208-8130 today.