The last article on “Magic Words” pointed out the unique language required to effect a valid former-spouse election for the Survivor Benefit Plan. This exploration will cover life, not death. When the military pension is divided by the court, the order which grants lifetime pension division can be a divorce decree, a settlement incorporated into the decree or a consent order, sometimes called a military pension division order (MPDO). The order is required to have two special phrases (or what you might call “magic words”) to comply with federal law.
The Frozen Benefit Rule
The law, of course, is the federal statute which allows the division of military retired pay by state courts; that’s the Uniformed Services Former Spouses’ Protection Act, or USFSPA, located at 10 U.S.C. §1408. An amendment in 2016 restricted the division of military retired pay to that which exists on the day of divorce. The “Frozen Benefit Rule” thus limits any further growth of the pension by taking a snapshot at the time of divorce. To provide information which the retired pay center needs to make this calculation, the law requires that every pension order state two data points: a) the High-3 pay of the servicemember on the date of the dissolution and b) the member’s years of creditable service (or, in the case of Guard/Reserve members, the date-of-divorce number of retirement points). This rule applies, pursuant to 10 U.S.C. §1408 (a)(4)(A), to the military pension division cases where the divorce was granted after December 23, 2016 and the member was not receiving retired pay at divorce.
There is no exception if you’re within this window. Congress did not leave a loophole for the parties to “consent otherwise.” Thus the husband and wife are not free to write their own agreement, since Congress has decided to tell them what they can do.
“High-3” Pay, Years of Service
The High-3 compensation of an individual is his or her highest three years of base pay, stated as a monthly amount (e.g., “John Doe’s High-3 at divorce was $4,567.89 per month”). That will require a clear understanding of John Doe’s current rank and years of service, as well as his date of initial entry into military service (or DIEMS) and his last promotion date, unless counsel somehow “gets lucky” and obtains the appropriate number of past pay statements from the servicemember. While not on a par with calculus, the computations are not easy for most attorneys.
The years of creditable service will depend on pay records (and other documents when there was a break in service). Counsel must know the difference between DIEMS (see above) and the PEBD, or Pay Entry Base Date. The retirement points calculation means that counsel must have access to John Doe’s annual Reserve/Guard points statement.
None of this is simple, and it’s often a wise idea to hire an attorney who’s “been around the block” with these problems a couple of times. That’s what we call a co-pilot or – in the words of Tom Cruise – a “wingman.” It’s also possible to attempt this alone by reading “Military Pension Division and the Frozen Benefit Rule: Nuts ‘n’ Bolts,” a Silent Partner infoletter which may be found at https://www.americanbar.org/groups/family_law/ > Military Law Committee, or at www.nclamp.gov > Publications.
All of this (and more) can be found at “The Frozen Benefit Rule” in Chapter 8 of THE MILITARY DIVORCE HANDBOOK (Am Bar Assn., 3rd Ed. 2019).