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Military Reserve Benefits


At times, such as the present, our armed forces have been augmented by a large increase in the number of Reserve Component soldiers called to active duty as a result of higher levels of military activity. Troyan, Inc. believes it is useful for the family lawyer to have at his or her disposal basic information regarding the retirement benefits available to all Reserve/National Guard soldiers. The task of this Practice Aid is to provide the practitioner with some basic information regarding the retirement benefits of Reserve/National Guard soldiers, including Reserve/National Guard soldiers who have been called into active service. Such “called up” Reserve/National Guard soldiers are not Regular Army Components, i.e. Career Soldiers, rather they are what is termed “Reserve Component” forces. These soldiers upon completion of their period(s) of full time service return to civilian life, most continuing to serve in the Reserve/National Guard as “other than Regular Component Military Personnel”. A percentage will leave the military prior to earning a right to retirement benefits.

Retirement benefits are earned by these Reserve Component/National Guard soldiers during the following phases of their military service:

  • before being called to Active Status,
  • period(s) of Active Status,
  • return to Reserve/National Guard

These military retirement benefits can be significant. The practitioner must have a working knowledge of Reservist/National Guard Military Retirement Benefits; how they accrue, their present and potential future worth and the procedures to divide these retirement benefits incident to a marriage dissolution action.

To effectively determine the present cash value of military retirement benefits and when appropriate or necessary to negotiate and draft an Order against Military Retirement Benefits the practitioner must have a current copy of the soldier’s “Chronological Record of Military Service” (CRMS). It is suggested that the practitioner not begin this process until in possession of the CRMS! Please reference the Practice Aid, “Attorney Malpractice” to see a discussion of the need for the practitioner to first have a clear knowledge of the retirement benefits that will be subject to division upon divorce. Absent the CRMS the practitioner can only guess the soldiers date of entry into military service and the number of “retirement points” accumulated before and during the marriage. This form details the service history of the soldier from his or her “DIEMS”* up to the ending date shown on the CRMS form. The CRMS clearly states the total number of “retirement points” earned by the soldier as of the end date indicated on this form. This form is provided to the soldier annually.

*DIEMS: Date of Initial Entry Military Service. This date is useful in determining the marital/community retirement benefits available to the soldier involved in your matter.

Additionally, this form enables the practitioner to compute a Coverture Fraction (Time Rule) which shows marital/community and non-marital service. Based on the CRMS form the total accumulated retirement points of the soldier as of a given date can be determined. Unlike ERISA and other government plans the basis for determining Reserve Component retirement benefits is “earned points” not years of service (consider a “retirement point” as a “day of credited military service”). In the calculation of the soldier’s actual accrued retirement benefit these points are converted into years of service by dividing the total number of retirement points by 360. For example if the CRMS indicated 2,952 points then:

2,952 ÷ 360 = 8.2 years of military service.

The next step in the calculation of the soldier’s retirement benefit is a determination of the soldier’s rank. Once rank has been established the practitioner can reference the applicable pay charts to determine the soldier’s military base pay. Military base pay is predicated upon grade (rank) and years of service. The rank must be converted into a military designation that can be used to reference a pay chart.

  • For enlisted personnel the designations are: E1 - E9
  • For Warrant Officers the designations are: W1 - W5
  • For Commissioned Officers the designations are: O1 - O10


Use the applicable chart (year) to determine the soldier’s E, W, or O rank. Absent a knowledge of rank shown on these charts it will be difficult to compute a pay grade and retirement benefit for the soldier.

Assuming the practitioner is in possession of the following information regarding the soldier; rank, pay grade and pay we can illustrate the procedure to compute the soldier’s monthly accrued benefit. For purposes of this discussion: assume the rank is O-5 (Lt. Colonel) who at the jurisdiction’s end of marriage date: e.g. Date of Filing of Summons, Date of Filing of Complaint, Date of Separation, etc. (hereafter this point will be referenced as the End of Marriage Date), has accumulated 2,952 points.


The specific date for the determination of this soldier’s monthly accrued benefit is October 25, 2004.

Step I.

From the CRMS we note 2,952 retirement points. Divide the points by 360 to compute the equivalent “years of service”. 2,952 ÷ 360 = 8.2 years

Step II

Reference the applicable Rank/Pay Grade Chart .
For an O-5 with more than 8 years of service but less than 9 we observe that the monthly base pay is $5,341.84.

Step III

Now compute the soldier’s monthly accrued benefit. Recall that 10 USC 12739(a)(2), provides an accumulation rate of 2.5% for each year of service. Since our illustration indicated 8.2 years of military service the percentage of accumulation is 20.5%.

.025 multiplied by 8.2 years = 20.5%

Therefore the soldier’s actual monthly accrued benefit as of October 25, 2004 would be:

20.5% multiplied by $5,341.84 = $1,095.08.

Because the military rounds down to the next whole dollar the actual benefit would be $1,095.00.

At this point the practitioner knows the soldier’s total accumulated retirement benefit as of the jurisdiction’s End of Marriage Date. By application of a Coverture Fraction (Time Rule) the marital/community property portion of the retirement benefit is computed and the present cash value of same is then established. If the practitioner requires a formal pension evaluation to determine retirement benefits and the present cash value of said benefit, consider contacting Troyan, Inc. Their cost for a pension evaluation of a soldier is generally $125.00.

Once the present cash value of the marital/community property portion of the retirement benefit has been computed the practitioner must then decide on a Settlement Option:

Option One: Immediate Offset
Option Two: Deferred Distribution

Electing the Immediate Offset method means the practitioner will use the present cash value of the soldier’s retirement benefit to offset other marital/community assets. The soldier retains his or her retirement assets in exchange for a transfer to the Former Spouse of an asset of equivalent worth. The advantages of the Immediate Offset method are simplicity, ease of implementation and its effecting a clear economic cleavage between the parties. An added impetus is the fact that the military does not follow ERISA rules, nor does it comply with the Retirement Equity Act. Crafting a Domestic Relations Order against Reserve/National Guard retirement benefits can for the reasons indicated below be a daunting task.

Prior to rejecting an Immediate Offset settlement option the attorney for the Former Spouse will confirm that the Former Spouse in the matter being considered unquestionably meets the statutory criteria to assign a part of the soldier’s military retirement benefits to a Former Spouse. A copy of the CRMS is essential for such confirmation.

The discussion of the Immediate Offset settlement mode did not confront the issue of the right of a state court of competent jurisdiction to assign to a Former Spouse a portion of the soldier’s military retirement benefits as divisible marital/community property. A Deferred Distribution Settlement differs from an Immediate Offset in that under the Deferred Distribution settlement mode the Former Spouse does not receive an offsetting asset, rather the Former Spouse will actually receive a portion of the soldier’s military retirement benefits. It is Troyan, Inc.’s view that applicable federal law, i.e. The Unformed Services Former Spouses Protection Act (USFSPA) can be a bar to this settlement mode. This act does not bar state courts from treating military retirement benefits as marital/community property. However, the fact that military retirement benefits are treated as marital/community property does not mean that the USFSPA permits an actual division between spouses of military retirement benefits pursuant to a Domestic Relations Order. Quite the contrary the USFSPA definitively prohibits a state court from dividing and assigning military retirement benefits, unless such division meets the criteria established at 10 USC 1408(d)(2) which provides:

If the spouse or former spouse to whom payments are to be made under this section was not married to the member for a period of 10 years or more during which the member performed at least 10 years of service creditable in determining the member's eligibility for retired pay, payments may not be made under this section to the extent that they include an amount resulting from the treatment by the court under subsection (c) of disposable retired pay of the member as property of the member or property of the member and his spouse.

Based on the above statute the practitioner may not consider an actual division of the soldier’s military retirement benefits by a Domestic Relations Order unless the parties were married at least ten years during which the soldier accumulated ten years of service credit.

Note two criteria are to be met for the division of military retirement benefits pursuant to a Domestic Relations Order:

A period of marriage
A period of service

It is essential that the practitioner recognize that the measuring criteria for each period is different.

The ten year marriage requirement means that the time between the date of marriage and the date of divorce was ten years determined by reference to a calendar.

For Reserve/National Guard retirement benefits the ten years of service requirement is not measured by reference to a calendar. In our illustration above we indicated that the soldier had 2,952 points which equaled 8.2 years of service. That calculation format is not relevant to a Deferred Distribution settlement governed by 10 USC 1408(d)(2). In determining a soldier’s eligibility for retired pay the term “years” means “qualifying years”.

Qualifying Year: Since July 1, 1949 any year in which at least 50 retirement points were earned is a year of qualifying service.

Assuming one point is equal to one calendar day this means that 50 days of service each year for ten years while married would meet the statutes criteria for “performed at least 10 years of service creditable in determining the member's eligibility for retired pay…” By reference to the soldier’s Chronological Record of Military Service” (CRMS) the practitioner will know if the soldier in his or her matter meets the criteria of the above cited statute.
Once you confirm that the parties in your matter meet the standards of the “ten ten rule” you may consider a Deferred Distribution Settlement and the preparation of an applicable Domestic Relations Order.

Drafting Format A. Fixed Amount Coverture Fraction
Drafting Format B. Traditional Coverture Fraction (“Time Rule”)

The experienced practitioner representing the Non-Titled Spouse knows that jurisdictions such as Florida, Pennsylvania, Texas and Virginia (by statute Va. Code Ann. §20-107.3(G)(1), follow format A: Fixed Amount Coverture Fraction.

With minor variations the majority of states follow; In re Brown (544 P.2d 561) and apply the Traditional Coverture Fraction (“Time Rule”).

For the practitioner to effectively implement a Deferred Distribution Settlement i.e. the preparation of a Domestic Relations Order against the soldier’s military retirement benefits, he or she recognizes that these negotiations and subsequent drafting will deal with two separate and distinct components of the broader term “retirement benefits”.

Part One:
The allocation of retirement benefits upon the soldier’s retirement and up to the time of said soldier’s death.

Part Two:
The allocation of survivor benefits as a result of the soldier’s death subsequent to retirement. Recall, the retirement age for a Reserve Component Soldier is age 60.

Failure to specifically assign a survivor benefit to a Former Spouse** will result in loss of such entitlement to said spouse. The term “retirement benefit” will not be interpreted by the military to include “survivor benefits”.
**Former Spouse. This Practice Aid does not reference the Non-Titled Spouse as an Alternate Payee since the relevant statutes reference such spouse as “Former Spouse”. It is suggested in drafting your military order that you avoid use of the term “Alternate Payee” and consistently use the term “ Former Spouse”.


Drafting Format A. Fixed Amount Coverture Fraction

Practitioners using this format will recognize that the Former Spouse will be given a FIXED BENEFIT. This benefit will be determined as of a date certain, generally the jurisdiction’s end of marriage date or date of marriage dissolution. See CAUTION below regarding this format and post-retirement COLA.

To give effect to this format the practitioner will use the retirement benefit computed pursuant to the above illustrated method. It is observed that the above method produced a specific monthly benefit as of a specific date. The amount of this specific retirement benefit to be inserted into the Military Order is a function of the Coverture Fraction/Time Rule. This fraction produces the marital/community portion of the retirement benefit. For example: As of October 25, 2004 the soldier’s total monthly retirement benefit was $1,095.00. Assume the total number of retirement points accumulated during marriage was 930 and the total points accumulated to the end of the marriage was 2,952. Based on these two retirement point accumulations the marital/community part of the benefit would be:

930 ÷ 2,952 = 31.5%
The total retirement benefit on October 25, 2004 was $1,095.00.

Thus the marital/community part of the retirement benefit was:

$1,095.00 multiplied by 31.5% = $344.99

Assuming an equal division of the marital/community part of the benefit:

$344.99 ÷ 2 = $172.50

Remember the military round down rule. Thus, the Former Spouse’s share of the retirement benefit is 172.00.

It is this specific amount of $172.00 that is inserted into the Military Order.

The reader will note that Reserve Component Retired Pay begins 30 days after the 60th birthday of the soldier. The military does not permit a Former Spouse to begin collecting prior to the actual retirement of the soldier.

Use of a Fixed Amount Coverture Fraction will operate as a bar to a Former Spouse’s receipt of post retirement cost of living adjustments (COLA). Be clear on this circumstance. If you represent a Former Spouse and permit insertion into a Property Settlement Agreement and ensuing Domestic Relations Order of payment to said Former Spouse of a specific retirement benefit you have knowingly lost for your client any right to this valuable post-retirement benefit. The prudent practitioner will have within his or her file on such matter a letter to the Former Spouse clearly delineating the fact that this COLA benefit will not become available to said Former Spouse.


Drafting Format B. Traditional Coverture Fraction (“Time Rule”)

The central difference between the two drafting formats is the “Referencing Benefit”. The referencing benefit is the benefit used to compute the marital/community portion of the benefit to be paid to a Former Spouse. The referencing benefit for the Fixed Amount Coverture Fraction is the actual monthly accrued benefit of the soldier as of the End of Marriage Date. The referencing benefit for the Traditional Coverture Fraction (“Time Rule”) is the actual monthly accrued benefit of the soldier as of the date the Former Spouse’s benefit begins to be paid (date the soldier retires). Inherent in the Traditional Coverture Fraction (“Time Rule”) are period of growth of the benefit beyond the jurisdiction’s End of Marriage Date. The result is a significantly larger benefit subject to either the Coverture Fraction or the Time Rule.


It is suggested that attorneys preparing this part of the Order consider the following format.

Step 1.

Let the military determine the actual monthly retirement benefit of the soldier at the time of retirement.

Step 2

The monthly retirement benefit determined at Step 1 shall be multiplied by a fraction:
Total number of points accumulated by the soldier up to the end of marriage date. Note this is a specific number and such number will be inserted for the numerator.

Total number of points accumulated by the soldier. This number will be determined by the military at the time the member retires.

The product of this calculation is the marital/community part of the military retirement benefit.

Step 3.

The product of the Step 2 calculation shall be multiplied by (insert a percentage). The percentage value inserted is the portion of the monthly retirement benefit to be paid to the Former Spouse.

This commentary is not a statement of opinion from Troyan, Inc., rather it is the outcome of a series of mathematical models. Use of a Fixed Amount Coverture Fraction will in virtually every case advantage the Titled Spouse and alternatively use of the Coverture Fraction/Time Rule format will advantage a Former Spouse. We emphasize, this outcome is limited to Defined Benefit Plans. The reason for such results is the fact that the operation of a Coverture Fraction/Time Rule gives a Former Spouse a decreasing percentage of an increasing benefit. Significantly, the rate of decay of the marital/community share is slower than the rate of increase of the “referencing benefit”. Therefore, the Coverture Fraction/Time Rule results in a larger retirement benefit allocation to a Former Spouse. This was found to be true even if the annual rate of salary growth was less than 1%. Again, for Defined Benefit Plans application of the Coverture Fraction/Time Rule methodology results in a larger monthly benefit and a higher value asset for a Former Spouse. These outcomes are not limited to military retirement plans. These results are applicable generally for Defined Benefit Plans. Another interesting mathematical outcome arises when the salary used to compute the “referencing benefit” is held constant. If salary is fixed as of the End of Marriage Date then the resulting marital/community retirement benefit is identical for both methods. The mathematics used for these models is beyond the scope of this Practice Aid, however, attorneys who are users of our services may request these models on their letterhead.


See our Practice Aid at

Military Divorces — Former Spouse Survivor Benefits Drafting Advisory