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San Antonio, TX Family Law and Military Divorce Blog

Sunday, September 24, 2017

Clarifying Former Spouse Military Retired Pay Orders so DFAS can pay the Former Spouse—Part 1 of 3

The Defense Finance & Accounting Service (DFAS) will reject a decree or domestic relations order (DRO) that attempts to award the former spouse a share of military retired pay if the decree or DRO’s language is ambiguous or otherwise fails to meet DFAS' requirements for a valid award expression.  The 2017 National Defense Authorization Act (NDAA) levied more stringent requirements on decrees or DROs before DFAS can accept them.  Our firm has the expertise necessary to clarify your decree and/or DRO.  We’ve helped many a distraught former spouse obtain a clarified decree and/or DRO that permits them to get paid by DFAS.  Our firm even files the application for the former spouse (noting that a new application is required if the clarified order is submitted more than 90-days after DFAS’ letter notifying the former spouse of the need to obtain a clarifying order).

Here’s a real-life example of an award that recently we clarified.  The former spouse was awarded:

        “50% of the community value of Servicemember’s military retired pay.”  (emphasis added). 

Let’s break down what’s wrong with this award language.  DFAS cannot honor an award based solely on a percentage of the “community value” of retired pay accrued during the marriage for two reasons.  (emphasis added).  

First, DFAS cannot calculate the “community portion."1  (emphasis added).  The decree or DRO must either state the community portion as a percentage or provide DFAS with the necessary variables to perform the calculation.2  (emphasis added). 

Second, the value of military retired pay does not accrue over time, unlike a 401k.3  (emphasis added).  In reality, military retired pay is not really a “pension” at all.4 (emphasis added).  As DFAS states, military retired pay “is a statutory entitlement computed at the time the member retires and it is based on the member’s rank and total years of service at time of retirement, or [the] member’s high-3 [year’s base pay] and total years of service.(emphasis added).  Therefore, any attempt to award the former spouse a percentage of the "value of accrued retired pay" proves meaningless.6   See id.

In the second and third parts of this blog series, we’ll examine what the red text means when it comes to clarifying a decree and/or DRO.  Stay tuned.

Author Jim Cramp is a retired active duty colonel and the founder and principal attorney at the Cramp Law Firm, PLLC.  The firm provides a spectrum of family law-related services to clients in the greater San Antonio region, across the United States and throughout the world.  The firm specializes in Federal Civil Service and Military Divorce matters.  The firms also provides Wills and Estates and Probate services.

Notes1,2    — Department of Defense Financial Management Regulation 7000.14-R, Volume 7B, Military Retired Pay, Chapter 29, Former Spouse Payments from Retired Pay, Paragraph 290615, Awards of a Percentage of the Marital Portion.

Notes3,4,5,6  — Department of Defense Financial Management Regulation 7000.14-R, Volume 7B, Military Retired Pay, Chapter 29, Former Spouse Payments from Retired Pay, Paragraph 290614, Awards Based on Retired Pay Accrued During the Marriage.


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