Divorce/Former Spouse Benefits
Former Spouse Benefits under the Foreign Service Retirement Systems
Former spouses of Foreign Service employees are entitled to a number of pension, survivor and health benefits. Since there are specific time limitations to qualify for some former spouse benefits, it is important to submit your divorce decree and property settlement documents promptly to HR/RET (State Department employees) or your agency HR office.
To qualify for benefits, a former spouse must meet the following requirements: (1) Marriage to the participant for at least 10 years during the participant’s creditable service; and (2) 5 of the 10 years of marriage must have been while the participant was a member of the Foreign Service; and (3) the former spouse must not have remarried prior to age 55.
The State Department’s Office of Retirement (HR/RET) determines former spouse pension and survivor benefits under the Foreign Service Retirement and Disability System (FSRDS) and the Foreign Service Pension System (FSPS) for all Foreign Service agencies. In addition, determinations are made on former spouse health benefits enrollment under the Federal Employees Health Benefits Program (FEHB).
Former Spouse Entitlements
A qualified former spouse is entitled to a pro rata share of certain pension and survivor benefits, or these benefits may be defined by court order: (1) Pension; (2) Survivor Benefits; (3) Court-ordered apportionment; (4) Court-ordered survivor benefit; (5) Pro rata lump sum payment; (6) Federal Employees Health Benefit enrollment. [See Section 814 (a) of the F.S. Act of 1980, as amended, and Section 820 (b) (1) of the Act.]
Former spouse pension (share of retiree’s annuity). In the absence of a valid court order or notarized spousal agreement specifying otherwise, a qualified former spouse is entitled to a pension in the amount of the pro rata share of 50% of the retiree’s annuity. The pro rata share is determined by multiplying the employee’s annuity by a fraction: the numerator is the years and months of marriage during creditable service and the denominator is the retiree’s total creditable service (sick leave is excluded from this calculation). The former spouse will not be considered married to a participant for any periods of creditable service which are extended, such as the special 40% disability or a death-in-service calculation. A former spouse receives extra credit if she/he resided with the participant during any certified extra service credit at an unhealthful post.
For example, if the marriage during the creditable service was 20 years and 6 months of the total service of 25 years and 6 months, the pro rata share is 20.5000/25.5000, or 0.8039. If the retiree’s annuity is $30,000.00, the former spouse pension would be $12,058.50 gross per annum ($30,000.00 x .50x .8039).
When the former spouse pension is paid. The former spouse pension is payable on the same date that the retiree’s annuity begins, unless employee retired on disability. If the employee is already retired, the pension will be paid on the first of the month in which the divorce occurs, provided that the former spouse has not remarried prior to age 55 and is not entitled to a simultaneous survivor annuity from any other retirement system for government employees based on a previous or subsequent marriage. If the court order indicates that the former spouse is to receive payment regardless of remarriage prior to age 55, the Retirement Office will honor this as a court-ordered apportionment rather than a pension benefit. (Please refer to section 3 below on Federal tax liability on court–ordered apportionment payments).
Application of COLA’s for former spouse benefits. The same cost-of-living increases applicable to the retiree’s annuity are applied to the former spouse’s pension. The former spouse is liable for Federal tax on the pension benefit, subject to small percentage tax exclusion on the basis of the former spouse’s share of the retiree’s total contributions to the Foreign Service Retirement and Disability Fund and IRS’ actuarial rates. The Retirement Accounts Division in Charleston S.C. www.Payhelp@state.gov will provide the former spouse with the figure on the share of the total contributions for purposes of calculating the tax liability.
If there is aValid Court Order. In lieu of a pro rata share calculation of the former spouse pension benefit, a valid court order or notarized spousal agreement will be honored providing it contains a different calculation or express waiver of the benefit.
A court order may change the amount of the pension, if the order is issued within 24 months of the date of the divorce. A notarized spousal agreement may change the amount of the pension at any time.
Former Spouse entitlement to survivor benefits. In the absence of a valid court order or notarized spousal agreement specifying otherwise, a qualified former spouse is entitled to a survivor benefit in the amount of the pro rata share of the maximum spouse survivor benefit (55% under FSRDS and 50% under FSPS). A former spouse’s survivor benefit becomes payable the day after the participant’s death.
If the former spouse remarries prior to age 55 and prior to the commencement of the survivor benefit, the entitlement will be terminated and the participant may transfer the survivor annuity to a current spouse or, if retired, have the annuity recomputed to eliminate prospectively the reduction for the former spouse portion of the survivor benefit. There is no provision in the Foreign Service Act of 1980, as amended, that would allow one to retain the potential survivor entitlement in the event of the former spouse’s remarriage prior to age 55. (If the former spouse remarries after the employee’s death and later divorces, the survivor annuity can be reinstated).
If there is a Valid Court Order. A court order can change the survivor annuity up to the date of the employee’s or annuitant’s death. A notarized spousal agreement can change the survivor annuity if filed within 24 months of the divorce or at the time of retirement, whichever is earlier.
Court-ordered former spouse apportionment payment. The Department of State is required to comply with the express provisions of the law pertaining to the apportionment of retirement benefits in a valid state court order, decree, or court-approved property settlement agreement, in connection with the divorce, annulment of marriage, or legal separation of a federal employee or annuitant. A valid court-ordered apportionment affects only the Foreign Service participant’s annuity or refund of retirement of contributions. It does not affect a survivor annuity or a lump-sum death benefit. [See Section 820(b) (2) of the FS Act of 1980, as amended.]
Unless the court orders otherwise, a former spouse apportionment payment will be adjusted by applicable cost-of-living increases. The Federal tax liability on an apportionment payment is on the participant/retiree. Please consult with your tax accountant or financial adviser with respect to any Federal tax exclusion that may apply to a former spouse’s apportionment payment (in lieu of an alimony payment).
Court-ordered potential survivor benefit. The Department of State will comply with a valid court order providing a former spouse with a potential survivor benefit to the extent that such a benefit may be provided from the participant’s potential survivor annuity base or, if retired, the elected survivor annuity base.
Former spouse pro rata lump-sum payment. In the event that a participant separates from the Service before becoming eligible for an immediate annuity and has a qualified former spouse, the following options would be available in the absence of a valid court order or notarized spousal agreement specifying differently: (a) elect a refund of retirement contributions, in which case the former spouse would be entitled to the pro rata share of one-half of the retirement contributions; or (b) leave the contributions in the Fund for a deferred annuity with the former spouse retaining potential pro rata share pension/survivor benefits.
Federal Employees Health Benefits (FEHB) Enrollment
A former spouse’s health benefits coverage as a family member to the employee/retiree terminates on the date of divorce, subject to a temporary 31-day* extension of coverage and conversion privilege to convert to a non-group contract with the same health carrier. In lieu of the non-group contract conversion, the former spouse may qualify to enroll in one of the following FEHB programs:
Civil Service Spouse Equity Act of 1984, as amended. Former spouses may apply for this health plan enrollment within 60 days of the date of divorce or 60 days of the HR/RET notification letter of eligibility, provided that: (1) The former spouse was covered as a family member in the employee’s/retiree’s FEHB plan at any time during the 18 months prior to the divorce, and (2) the former spouse has current or future entitlement to receive a pension, survivor benefit, or apportionment payable under FSRDS or FSPS, and (3) the former spouse has not remarried prior to age 55, and (4) divorce occurs on or after 5/7/85.
A former spouse qualified for health benefits enrollment under the CS Spouse Equity Act pays the full employee and government share of the monthly health premium.
Temporary Continuation of Coverage (TCC), P.L. 100-654. A former spouse who loses FEHB coverage as a family member due to the dissolution of marriage on and after January 1, 1990, may be eligible to elect the FEHB coverage temporarily (36 months).
A former spouse is eligible if he/she meets the requirement of having been enrolled in a regular FEHB plan as a family member at the time of the divorce on and after 1/1/90, but does not meet one or both of the other two requirements for title to the FEHB coverage under the CSRS Spouse Equity Act. In other words, the former spouse: (1) has remarried before reaching age 55 on or after 1/1/90; or (2) is not entitled to a portion of the employees or retiree’s annuity benefit or survivor benefit based on the employee’s or retiree’s service on or after 1/1/90.
In order to qualify for enrollment in the TCC program, the former spouse must (a) lose eligibility for the regular FEHB program on or after 1/1/90, (b)
agree to pay the monthly employee share and government contribution plus
*In order to maintain continuity of FEHB coverage, the former spouse must submit FEHB application or letter within 31 days of the date of divorce.
a 2 percent administrative fee within 60 days of the date of the divorce or 60 days of the date of the HR/RET notification letter of eligibility, whichever is later.
If HR/RET determines that a court order is valid and qualifying, the former spouse and participant/ retiree are notified.
- Any applicable payment will be deferred for 30 days from the date of the determination letter, to avoid adjustments in the event that the court order is contested by the retiree or legal action is initiated.
- A court-ordered apportionment payment will be discontinued if the retiree’s payments are suspended or terminated (such as during full-time career Federal reemployment). However, a former spouse pension continues to be paid and the re-employed annuitant’s salary is reduced by the amount of the pension.
- In the event that more than one court order is served on an employee’s/retiree’s benefits, the court orders will be processed on a first-come, first-served basis.
- Since the former spouse is entitled to an apportionment or pension payment only while the retiree is living, the former spouse will be personally liable for any overpayment received after the death of the retiree.
- The former spouse may waive all or any portion of pension benefit; however, the waiver cannot be revoked retroactively.
Qualifying Court Order
A qualifying court order must expressly provide that the former spouse is entitled to a portion of the retiree’s annuity and that the Foreign Service Retirement and Disability Fund is to pay that amount directly, rather than the retiree making that direct payment. In addition, it must:
- State the amount of the court ordered payment clearly so that is readily calculated from HR/RET’s annuitant records and the gross annuity. The retiree’s net annuity will not be used to calculate the benefit.
- Be issued from any court of any State, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, or the Virgin Islands.
- Not be in conflict with any previously issued court order that remains valid.
Valid Spousal Agreement
A valid spousal agreement is a notarized agreement between the employee/retiree and former spouse with respect to the former spouse pension and/or survivor benefit. A notarized spousal agreement pertaining to the former spouse pension benefit may be filed at any time. However, one pertaining to the former spouse survivor benefit may be filed only within 24 months after the date of divorce or at retirement, whichever is earlier.
Tax Provisions Governing Reemployed Foreign Service Annuitants
For purposes of the salary/annuity limitation on reemployment of the annuitant on a WAE basis (Section 824 of the Foreign Service Act of 1980, as amended), any payment to a former spouse that reduces the amount of annuity payable to the retired annuitant, or any deduction from the gross amount of annuity (for alimony, child support, etc.), is considered income of the annuitant.
How to Apply For Former Spouse Benefits
The former spouse must submit to Department of State, HR/RET, Room H620, SA-1 Washington, D.C. 20522-0108: (1) a recently certified copy of the court order; and (2) a statement that the court order has not been amended, superseded, or set aside; and (3) the full name, date of birth, and Social Security number, correspondence addresses for the employee/retiree and former spouse.
HR/RET also needs to be notified of any subsequent remarriage and/or change in correspondence address.
Office of Retirement
2401 E Street, NW
Room H-620, SA-1 (Columbia Plaza)
Washington, D.C. 20522-0108
Phone: (202) 261-8960
Fax: (202) 261-8988