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Federal Civil Service Former Spouse Survivor Annuities

Court Of Appeals For The Federal Circuit Changes The Rules

This Practice Aid covers a narrow but significant issue regarding federal employees and Former Spouse Survivor Annuities. To present this issue in a clear manner the following fact pattern is offered.

Husband, a federal employee, retired while married and elected a maximum survivor annuity for his wife.

Three years after retirement the parties divorce. The divorce gave the wife a portion of the husband’s retirement annuity but was silent on survivor benefits.

Eighteen months after the divorce the husband dies.

The Former Spouse promptly files for a Former Spouse survivor annuity. OPM (Office of Personnel Management) denies this claim for survivor benefits based on 5 USC 8341(h)(1) [2005], which provides:

(h) (1) Subject to paragraphs (2) through (5) of this subdivision, a former spouse of a deceased employee, Member, annuitant, or former Member who was separated from the service with title to a deferred annuity under section 8338(b) of this title [5 USCS §8338(b)] is entitled to a survivor annuity under this subdivision, if and to the extent expressly provided for in an election under section 8339(j)(3) of this title [5 USCS §8339(j)(3)], or in terms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such degree (emphasis mine).

As the facts of our illustration clearly state, this Former Spouse was not, pursuant to the divorce, awarded a Former Spouse survivor annuity. Nevertheless, it is Troyan, Inc.’s view that OPM’s denial of survivor benefits to this Former Spouse can under certain fact patterns be successfully challenged.

The form of a practitioner’s challenge to OPM on this issue is dependent upon the facts of your specific matter. The forum will be:
Step I: OPM
Step II: Merit Systems Protection Board (M.S.P.B.)
Step III: U.S. Court of Appeals for the Federal Circuit

NOTE: Troyan, Inc. provides litigation support on matters before OPM, MSPB and the Federal Circuit as they relate to the issue herein discussed and similar issues.
OPM’s Default Position:
An initial request by a Former Spouse for a survivor annuity based on an election made by the annuitant at the time of retirement may be met with rejection based on OPM’s view that the annuitant’s election of survivor benefits automatically terminated upon the couple's divorce, pursuant to 5 U.S.C. §8339(j)(5)(A). Troyan, Inc. believes that an OPM decision based on 5 U.S.C. §8339(j)(5)(A) can be effectively challenged.

Prior to a formal challenge the practitioner will mobilize data that rebuts OPM’s view. Using case law for guidance the practitioner must find procedural flaws in OPM’s handling of a Former Spouse’s claim for a survivor annuity. This requires an examination of how OPM’s Annual notice to annuitant of rights of election notice was actually implemented. The notice to annuitant requirement is found in a note (1988) to 5 U.S.C. 8339 and in relevant part provides:

"The Civil Service Commission [Director of the Office of Personnel Management] shall, on an annual basis, inform each annuitant of such annuitant's rights of election under sections 8339(j) and 8339(k)(2) of title 5…

Analysis of a number of cases from the United States Court of Appeals for the Federal Circuit provides guidance in determining whether the facts of your case support the view that OPM failed to comply with the Annual Notice to Annuitant of rights of election requirements. The informed practitioner recognizes that the cases do not generally deem mere annual notice to the annuitant as a sufficient basis to deny a Former Spouse a survivor annuity. The Federal Circuit has made clear that notice alone is not sufficient to bar a Former Spouse’s claim for a survivor annuity. The required notice to annuitants is deficient when it fails to inform an annuitant that, even if he had previously elected a spousal annuity when married, he must make a new election after his or her divorce. This is central to the practitioners argument.

Thus, it is necessary to review relevant correspondence to determine if the annuitant’s file reveals a communication from OPM that clearly and unambiguously informs the annuitant that even if he or she had made an election prior to divorce, that a pre-divorce election automatically terminates upon divorce and that an annuitant must make a new election to provide a survivor annuity for a Former Spouse. It is the burden of OPM to offer proof that the annuitant was clearly and unambiguously informed of necessity of making a new election to preserve the survivor spouse interest of a Former Spouse.

Instead of or in addition to the flawed annual notice argument the practitioner may argue that the annuitant by his or her actions subsequent to retirement “adequately manifested” an intent to provided a Former Spouse survivor annuity to the Former Spouse. For example in the Brush and Vallee decisions the court found that an employee's continued acceptance of a reduced annuity following divorce, standing alone, adequately demonstrated that employee's intent to provide a survivor annuity for the former spouse.

As to the best approach to a challenge to OPM we observe:
The cases appear to indicate that often it is the sum of the circumstances that appears to have moved the courts in favor of or against a Former Spouse.

When a matter of the type discussed herein arises consider use of our services.