Dividing Military Retirement – The 20/10/10 Rule

The Uniformed Services Former Spouses’ Protection Act (USFSPA) combined with state law allows California courts to distribute military retirement benefits to former spouses and provides a method for enforcement of these orders through Defense Finance and Accounting Service (DFAS).  Military retirement benefits can be divided as a marital asset and can also be used as a source of child and spousal support.  In order to use military retirement benefits for child or spousal support, a certified court order must be served on DFAS.

There are some limits on the payment of military retired pay directly to former spouses by DFAS.  For example, a former spouse can only receive payments from DFAS for up to 50% of disposable retired pay (65% if there is a garnishment in arrears for child or spousal support).  However, please note that this limitation only applies to payments made directly from DFAS, a former spouse could be awarded 100% of the military retirement benefits, but would need to collect the additional 50% directly from the retired military member.

The Ten Year Rule / The 20/10/10 Rule

Another limitation on direct payments from DFAS is commonly known as the “Ten Year Rule” or the “20/10/10 Rule”.  Essentially, in order for a former spouse to be paid by DFAS, the parties must have been married for at least 10 years during which time the service member performed at least 10 years of creditable military service.  The “20” in the 20/10/10 Rule refers to the number of years of service needed to reach retirement.  However, if the marriage overlapped military service for less than 10 years, the former spouse may still be entitled to a portion of the retirement benefits, but she/he will have to collect monthly payments from the service member, not DFAS.

It is also important to note that for purposes of the Ten Year Rule, the years of marriage is determined from the date of marriage through the date of termination of marital status, i.e. the parties’ date of dissolution.  However, in contrast, the length of marriage for determining the former spouse’s share of the benefits in California is determined from the date of marriage through the date of separation.  As an example, if the parties were married on January 1, 2000, separated on July 1, 2009, and their divorce was finalized on January 2, 2010, the service member’s former spouse would be entitled to direct payments from DFAS, even though her total property interest will be determined on a time period of January 1, 2000 through July 1, 2009, a time period of less than 10 years.

Cost-of-Living-Adjustments (COLAs) and Survivor’s Benefits

When dividing military retirement benefits, the parties should come to an agreement about whether or not the former spouse will share proportionately in cost-of-living adjustments (COLAs).  Another critical issue is that of survivor’s benefits.  For a former spouse to continue receiving payments after the death of the service member, the former spouse must be named in a Survivor’s Benefit Plan (SBP).  It is important to note that unlike many private company survivor benefits, the SBP cannot be divided between a spouse and former spouse; i.e. if the service member remarries the spouse at the time of death and a former spouse cannot both receive benefits under the SBP.  In order to ensure SBP for a former spouse, an election must be filed with the appropriate Service Secretary within 1 year of the date of the court order for divorce, dissolution or annulment.  This election will bar the service member’s future spouse from receiving SBP benefits.  If a former spouse will be named in the SBP, the parties should also determine who will pay for the premium.  In simplified terms, the premium could be paid entirely by the former spouse, entirely by the service member, or it can be equally divided between the parties.

The division of benefits earned during military service can also vary based upon participation in the Reserves or by other employment with the Federal Government leading to benefits with the Civil Service Retirement System (CSRS).  The above information applies to traditional pension benefits.  Many members of the military also participate in the Thrift Savings Plan, which can also be divided during divorce.

Additional Questions?

If you have questions about obtaining a Domestic Relations Order to divide military retirement benefits, call 619-786-QDRO to speak with a California QDRO attorney today!  You can also click here to learn more about Death and Survivor Benefits for military retirement.

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