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The reader will be advantaged by reading another Practice Aid prior to continuing with this Aid. The earlier Aid is a general discussion of the allocation of federal benefits upon divorce. Its title is:

Federal Civil Service Retirement System Survivor Benefits
Domestic Relations Orders

Regarding this Practice Aid:
EACH TIME A RELEVANT TERM IS USED FOR THE FIRST TIME IT WILL BE MARKED “(G)” AND MAY THEN BE REFERENCED IN THE GLOSSARY AT THE END OF THIS PRACTICE AID.

FEDERAL CIVIL SERVICE RETIREMENT SYSTEMS
SURVIVOR BENEFITS
DOMESTIC RELATIONS ORDERS

Query:
What is the difference between CSRS and FERS?

Answer:
Civil Service Retirement System or CSRS means the retirement system for Federal employees described in subchapter III of chapter 83 of title 5, United States Code. Generally, this is the Retirement System for individuals who joined prior to January 1, 1984.
Federal Employees Retirement System or FERS means the retirement system for Federal employees described in chapter 84 of title 5, United States Code. Generally, this is the Retirement System for individuals who joined subsequent to December 31, 1983

Query:
Can a Former Spouse Survivor Annuity(G) be awarded to a Former Spouse (G) subsequent to a Judgment of Divorce?

Answer:
It depends on the circumstances at the time of divorce. The only circumstance that will permit a post-divorce award of Former Spouse survivor benefits is a matter in which the Decree of Divorce was silent on the division of marital property. Then and only then will first court order (G) or court-approved property settlement agreement incident to such Decree be able to award to a Former Spouse a Former Spouse Survivor Annuity. [5 USCS 8341(h)(4)]

Query:
Because of the rigid interpretation by the Office of Personnel Management (G) regarding an award of Former Spouse survivor benefits, what is the safest procedure to follow regarding such award that will minimize the potential for denial of this award by OPM?

Answer:
A Former Spouse is entitled to a Former Spouse survivor annuity if and to the extent expressly provided for pursuant to the terms of any decree of divorce or annulment or any court order or court-approved property settlement agreement incident to such decree. [5 USCS 8341(h)] Troyan, Inc., suggests consideration of the following: 5 CFR 838.804

The practitioner must be certain that his or her Court Order expressly awards a Former Spouse survivor annuity or expressly directs an employee or retiree to elect to provide a Former Spouse survivor annuity. Be clear on this point: a court order awarding a Former Spouse survivor annuity is not a court order acceptable for processing unless it expressly awards a Former Spouse survivor annuity or expressly directs an employee or retiree to elect to provide a Former Spouse survivor annuity. We reemphasize the term “expressly.”

The practitioner will identify the subject retirement system using terms that are sufficient to identify the specific Federal Retirement System, [838.911] For example, "CSRS," "FERS," "OPM," or "Federal Government" survivor benefits, or "survivor benefits payable based on service with the U.S. Department of Agriculture," etc., are sufficient identification of the retirement system.

The practitioner will avoid language referring to benefits under another retirement system, such as military retired pay, Foreign Service retirement benefits and Central Intelligence Agency retirement benefits. These terms must not be used when dealing with CSRS or FERS.

The Court Order must specify that it is awarding a Former Spouse survivor annuity. Again, your Court Order will repeatedly use terms such as "survivor annuity," "death benefits," "Former Spouse survivor annuity.

Alternatively, a Court Order may provide that the Former Spouse is to "continue as" or "be named as" the beneficiary of CSRS or FERS survivor benefits. Although the CFR indicates this language is acceptable, Troyan, Inc. suggests that clarifying language be added to establish the magnitude of the Former Spouse’s survivor benefit.

Query:
What specific advice will the practitioner give to the Former Spouse regarding said Former Spouse’s duties and responsibilities?

Answer:
1. If the practitioner does not then the Former Spouse shall file a certified copy of the Court Order that made an award to the Former Spouse, together with a certified copy of the Judgment of Divorce and if applicable the Property Settlement Agreement.

2. The Former Spouse shall keep OPM advised of the Former Spouse’s current mailing address;

3. The Former Spouse shall notify OPM of any change in circumstances that could affect entitlement of benefits, e.g. remarriage.

Query:
Is OPM the proper venue to resolve disputes between the parties regarding the terms of divorce or the contents of a Court Order?

Answer:
No. The sole issue for OPM is the compliance of the Court Order with applicable Federal Regulations. All other matters must be resolved in the state court.

Query:
May a Court Order provide a separate timetable for annuity payments to a Former Spouse?

Answer:
No. Benefits will not be paid to a Former Spouse prior to the commencement of benefits to the employee. The payment timetable for the Former Spouse will be the same as for the retiree.

Query:
What is the maximum award of a Former Spouse survivor annuity that may be made to a Former Spouse?

Answer:
For CSRS: The maximum Former Spouse survivor annuity is 55% of the retiree’s self-only annuity.[831.641]
For FERS: The maximum Former Spouse survivor annuity is 50% of the retiree’s self-only annuity.(5 USCS 8442)

Query:
What is the maximum annuity (this is not a survivor benefit Q&A) payment that may be paid to a Former Spouse?

Answer:
Payment to a Former Spouse under a Court Order may not exceed the retiree’s net annuity. (G) Thus, a Former Spouse can receive 100% of the employee’s net annuity, but, the maximum Former Spouse survivor annuity is as indicated above:
CSRS: 55% of the employee’s self only annuity
FERS: 50% of the employee’s self only annuity

Query:
How is the cost of a Former Spouse survivor annuity computed?

Answer:
The cost of a Former Spouse survivor annuity is determined as follows:
2.5% of the first $3,600.00 of the employee’s basic annuity used to compute the Former Spouse survivor annuity,
10% of the balance of the employee’s basic annuity used to compute the Former Spouse survivor annuity,
For example:
Assume the employee’s total annual basic annuity at retirement is $26,400.00.
Assume the Former Spouse’s annual survivor annuity is $9,000.00
Then the cost of the Former Spouse’s survivor annuity would be computed as follows:
$3,600.00 multiplied by 2.5% = $90.00
$5,400.00 ($9,000.00 less $3,600.00 = $5,400.00) multiplied by
10% = $540.00
Total annual cost of Former Spouse’s survivor annuity is $630.00 or $52.50 each month.

Query:
How is the cost of the Former Spouse survivor annuity allocated between the spouses?

Answer:
OPM will allow virtually any allocation of cost, e.g. it may be fully attributed to either spouse, proportionately allocated.

Query:
If a Former Spouse remarries prior to age 55 what is the status of his or her Former Spouse survivor annuity?

Answer:
The remarriage of a Former Spouse prior to age 55 results in loss of survivor benefits (note this does not say loss of living benefits). However, if the Former Spouse’s spouse dies or the parties divorce the Former Spouse’s survivor annuity is restored. [5 uscs 8341(g)]

Query:
If the award of benefits to a Former Spouse significantly diminishes or takes all of the benefit otherwise payable to the employee, can such employee simply waive his or her benefit and thus deny any benefit to a Former Spouse?

Answer:
Yes. Waivers of employee annuity payments exclude the waived portion of the annuity from availability for payment under a court order if such waivers are postmarked or received before the date that OPM receives a court order acceptable for processing. The practitioner cannot bar this waiver by the employee, but, a foundation can be prepared for swift punitive and remedial action. If the practitioner deems such action by the employee possible it is suggested that you contact Troyan, Inc. for language to be inserted into the Property Settlement Agreement/Judgment of Divorce to minimize the potential for such action. [5 CFR 838.211]

Query:
Based on the above Q&A’s, does this mean that the FERS Former Spouse maximum survivor annuity is 5% less than the CSRS maximum Former Spouse survivor annuity?

Answer:
Be careful here. In an absolute sense the difference is of course 5%, however, because of the method of computing survivor benefits, the survivor benefits payable under CSRS are significantly larger than the survivor benefits payable under FERS. The survivor annuity is based on the size of the employee’s basic annuity and CSRS annuities accrue at the following rate: 1% for the first 5 yrs. of service, 1.5% for the next 5 yrs. of service and thereafter at 2% per yrs. of service. The uniform rate of accrual for FERS is 1% (if the employee retires at age 60 with not less than 20 years of service then the uniform rate of accrual for all years is 1.1%).

Further, the alert practitioner will note that there are additional death benefits that may be awarded to a FERS Former Spouse.

Query:
Is there a “Death Benefit” payable under FERS that does not exist for CSRS?

Answer:
Yes. If the deceased employee had at least 18 months of creditable civilian service, the basic employee death benefit amount is a lump sum payment (at time of writing was $23,386.98) plus a lump sum equal to the higher of half of the final salary at the time of death or half of the high-3 average salary.

Query:
Is this “Death Benefit” available to a FERS Former Spouse?

Answer:
Yes. This benefit may be payable to a Former Spouse (in whole or in part) if a qualifying court order is on file and the Former Spouse was married to the deceased for a total period of at least nine months and did not remarry before reaching age 55. Naturally, this benefit must be specifically provided for in your COAP.

Query:
Can a survivor annuity be awarded to more than one spouse or Former Spouse?

Answer:
Yes. A survivor annuity may be divided into a combination of Former Spouse annuities and a current spouse annuity so long as the aggregate total of current and Former Spouse annuities does not exceed the maximum limitation of 55% of the self-only annuity for CSRS and 50% for FERS.

Query:
If a Court Order seeking to give to the Former Spouse a Former Spouse survivor annuity, simply provides:
The benefit payable to the Former Spouse shall be for the lifetime of the Former Spouse, or
The employee’s annuity shall continue after the death of the employee or retiree,

Will the above language successfully award to a Former Spouse a Former Spouse survivor annuity?

Answer:
No. For a Court Order to successfully award to a Former Spouse a Former Spouse survivor annuity it must employ proper language in a section separate and distinct from the award of a portion of the employee’s annuity. This separate section of the Court Order will establish that this award of a Former Spouse survivor annuity is apart from any award of a part of the employee’s annuity and will use required language. This is a drafting trap. Consult Troyan, Inc. for guidance on this point.

Query:
If the Decree of Divorce was silent regarding an award to a Former Spouse of a Former Spouse Survivor Annuity, can it be modified by a subsequent Court Order?

Answer:
Yes, provided this subsequent Court Order is entered prior to the earlier of the death or retirement of the employee. [5 USCS 8341(h)(4)]

Query:
If the parties are married, the Employee retires and elects a Survivor Annuity and the parties divorce subsequent to the Employee’s retirement will the Employee’s pre divorce designation of Survivor Benefits remain in effect?

Answer:
No! For this survivor annuity to remain in effect or to continue at a reduced or enhanced level, the Judgment of Divorce and the ensuing COAP must specifically assign this benefit to the Former Spouse. If there is no such language in the Judgment of Divorce, the pre-divorce survivor rights of the Former Spouse will end.

Query:
Can a COAP be amended by a subsequent court order?

Answer:
If the parties were married at the time of the employee’s retirement and at that time the Wife waived her right to a survivor annuity, then the subsequent divorce may not give the now Former Spouse a Former Spouse survivor annuity. Absent this circumstance it is generally possible to amend a COAP.

Query:
How does OPM treat amended court orders?

Answer:
If the employee, separated employee, retiree, or Former Spouse submits an amended court order pertaining to payment of a portion of the employee annuity, OPM will process the amended court order prospectively only. However, if a court order expressly directs OPM to adjust for payment made under the prior court order; and the court clearly delineates the total amount of the adjustment or the length of time over which OPM will make the adjustment.

It is the practitioner’s duty to provide a specific monthly amount of adjustment or a formula to compute the amount of the monthly adjustment. If the amended court order contains clear language that can be implemented by OPM then OPM will comply. [5 CFR 838.225]

Query:
Can an amended court order provide for arrearages?

Answer:
Yes: The crafting of this language can be complex. It is suggested you contact Troyan, Inc. for appropriate language. [5 cfr 538.234]

Query:
Absent provision in a COAP for a Former Spouse survivor annuity, what happens to the benefits that were being paid to the Former Spouse upon the death of said Former Spouse?

Answer: [5 cfr 8338.237]
The Former Spouse's annuity terminates on the last day of the month before the death of the Former Spouse, and the Former Spouse's share of employee annuity reverts to the retiree.
HOWEVER, OPM will honor a an amended COAP that directs OPM to pay, after the death of the Former Spouse, the Former Spouse's share of the employee annuity to--
(1) The court;
(2) An officer of the court acting as fiduciary;
(3) The estate of the Former Spouse; or
(4) One or more of the retiree's children
Troyan, Inc. suggests that when the parties are in agreement on the continuation of payments as indicated above that provision for same be inserted into the initial COAP. Time and circumstances change. A employee may be more amenable to this successor language prior to establishing a new relationship.

Query:
What is the procedure to follow if the employee seeks to contest the validity of a Court Order?

Answer:
The employee shall:

Submit to OPM a Court Order that declares invalid the Court Order submitted by the Former Spouse or,

Submit to OPM a Court Order that sets aside the Court Order submitted by the Former Spouse. [838.425]

GLOSSARY
Accrue: when benefits begin.

CSRS: Civil Service Retirement System or CSRS means the retirement system for Federal employees described in subchapter III of chapter 83 of title 5, United States Code.

Court order: any judgment or property settlement issued by or approved by any court of any State, the District of Columbia, the Commonwealth of Puerto Rico, in connection with, or incident to, the divorce, annulment of marriage, or legal separation of a Federal employee or retiree.

COAP: Court order acceptable for processing is the Federal equivalent of a Qualified Domestic Relations Order. This Order must comply with the Code of Federal Regulations guidelines as they relate to the award of an employee annuity, death or survivor annuity benefits to a Former Spouse.

Employee: an employee or Member covered by CSRS or FERS.

Employee annuity: the recurring payments under CSRS or FERS made to a retiree. Employee annuity does not include payments subsequent to the death of the employee or Member. This award must be delineated separately.

ERISA: the Employees Retirement Income Security Act.

FERS: Federal Employees Retirement System. This is the retirement system for Federal employees described in chapter 84 of title 5, United States Code.

Former Spouse: a living person whose marriage to an employee has been subject to a divorce, annulment of marriage, or legal separation resulting in a court order, or (2) in connection with a court order awarding a Former Spouse survivor annuity, a living person who was married for at least 9 months to an employee or retiree who performed at least 18 months of civilian service covered by CSRS or who performed at least 18 months of civilian service creditable under FERS, and whose marriage to the employee of retiree was terminated prior to the death of the employee or retiree.

Former Spouse Survivor Annuity: a recurring benefit under CSRS or FERS, or the basic employee death benefit under FERS, that is payable to a Former Spouse after the employee's or retiree's death.

Gross annuity: the amount of monthly annuity payable after reducing the self-only annuity to provide survivor annuity benefits, if any, but before any other deduction. Unless the court order expressly provides otherwise, gross annuity also includes any lump-sum payments made to the retiree.

Member: a Member of Congress covered by CSRS or FERS.

Net annuity: the amount of monthly annuity payable after deducting from the gross annuity any amounts that are --
(1) Owed by the retiree to the United States;
(2) Deducted for health benefits premiums;
(3) Deducted for life insurance premiums;
(4) Deducted for Medicare premiums;
(5) Properly withheld for Federal income tax purposes, if the amounts withheld are not greater than they would be if the retiree claimed all dependents to which he or she was entitled;
(6) Properly withheld for State income tax purposes, if the amounts withheld are not greater than they would be if the retiree claimed all dependents to which he or she was entitled; or
(7) Already payable to another person based on a court order acceptable for processing or a child abuse judgment enforcement order.
Unless the court order expressly provides otherwise, net annuity also includes any lump-sum payments made to the retiree.

Office of Personnel Management (OPM): This is the federal equivalent of a Human Resources department. It is OPM that determines the acceptability of any submitted Order. In other words they determine if the Domestic Relations Order submitted to this entity is a COAP.

Reduction to provide survivor benefits: the reduction required by section 8339(j)(4) or section 8419(a) of title 5, United States Code.

Refund of employee contributions: a payment of the lump-sum credit to a separated employee. Refund of employee contributions does not include lump-sum payments.

Retiree: a former employee or Member who is receiving recurring payments under CSRS or FERS based on his or her service as an employee. Retiree does not include a person receiving an annuity only as a current spouse, Former Spouse, child, or person with an insurable interest. Self-only annuity means the recurring payments to a retiree who has elected not to provide a survivor annuity to anyone. Unless the court order expressly provides otherwise, self-only annuity also includes any lump-sum payments made to the retiree.

Self-only annuity: the recurring unreduced payments under CSRS or FERS to a retiree with no survivor annuity payable to anyone.

Separated employee: a former employee or Member who has separated from a position in the Federal Government covered by CSRS and FERS, and is not currently employed in such a position, and who is not a retiree.

Cases reviewed for this Practice Aid

1 CONSTANCE BERRY NEWMAN, DIRECTOR, OFFICE OF PERSONNELMANAGEMENT, Petitioner, v. LOIS G. LOVE and ESTHER E. PENN, and MERIT SYSTEMSPROTECTION BOARD, Respondents.
91-3268
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
962 F.2d 1008; 1992 U.S. App. LEXIS 6845; 92 Daily JournalDAR 5625
April 15, 1992, Decided

2 Hokanson v. OPM, US Ct. of App. Fed Cir, 122 F.3d 1043;August 22, 1997