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Dallen Haws at Haws Financial Planning
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When going through a divorce, there are many factors to consider, especially when it comes to dividing assets and property. For federal employees who are covered by the Federal Employees Retirement System (FERS), their pension is often one of the largest assets to be dealt with in a divorce settlement.
Calculating a FERS pension after a divorce can be complex, but with the right information and guidance, it can be done accurately. Here are the steps to take in order to calculate your FERS pension after a divorce.
1. Understand the FERS pension system: Before diving into the calculation process, it’s important to have a clear understanding of how the FERS pension system works. FERS is a retirement plan for federal employees that includes three main components: a basic annuity, Social Security benefits, and the Thrift Savings Plan (TSP). Understanding how these components work together and how they are affected by a divorce is crucial in accurately calculating a FERS pension.
2. Determine the marital portion of the FERS pension: In most divorce cases, the marital portion of a FERS pension is calculated based on the number of years the federal employee was married while contributing to the FERS system. This is usually referred to as the “marital coverture fraction.” To calculate this fraction, divide the number of years of marriage during federal service by the total years of federal service. For example, if a federal employee was married for 10 years while contributing to FERS and worked for a total of 20 years, the marital coverture fraction would be 10/20 or 50%.
3. Obtain a court order: In order to divide a FERS pension in a divorce settlement, a court order known as a Qualified Domestic Relations Order (QDRO) is required. This order outlines how the pension will be divided between the federal employee and their ex-spouse. It is important to work with a qualified attorney who has experience in QDROs to ensure that the court order is drafted accurately and in compliance with federal regulations.
4. Calculate the ex-spouse’s share: Once the marital portion of the FERS pension has been determined and a QDRO has been obtained, it is time to calculate the ex-spouse’s share of the pension. This is typically done using a formula that considers the marital coverture fraction and other relevant factors. Again, it is important to seek legal and financial advice to ensure that the calculation is done accurately.
5. Consider other retirement assets: In addition to the FERS pension, federal employees may have other retirement assets such as the Thrift Savings Plan (TSP) or Social Security benefits. These assets should also be considered when calculating the overall division of retirement benefits in a divorce settlement.
In conclusion, calculating a FERS pension after a divorce can be a complex and daunting task, but it is vital to ensure that both parties receive their fair share of the marital assets. Seeking guidance from legal and financial professionals who are well-versed in federal retirement systems and divorce settlements is crucial in making informed decisions and achieving a fair outcome.
I also want to know does the FERS includes my social security and my TSP? Will my ex wife entitled half of that as well if she gets half of of FERS? Thank you.
Hi, I just came across this video and I’m glad I did because I’m in a similar situation. But how can I find out about my high 3 amount? Thank you.
What is you retire early, let's say after 20 years of service: would the ex-spouse be entitled to what your pension would be had you retired after 30 years? I know this might be a legal question.
Can we agree to not take any of our spouses pension in a divorce decree?
This info is so important before divorce. My husband has worked for 41 years thru CSRS. He was previously married for 18 years. He agreed to 50% of his retirement assuming that was 50% for the 18 years they were married. Always make sure you state "for the years married" in your divorce decree. It seems highly unfair a former spouse can collect 50% of your entire retirement!
Divorced in 2010! The decree states coverture portion. From date of marriage to to 12/8/2010. Shouldn’t they use my high 3 from the end date of marriage?
Scenario: I’ve been married longer than I’ve been eligible for FERS. (Got married in ‘09, became eligible for FERS in ‘11) However, I was a temporary federal employee from ‘08-‘10 but was ineligible to contribute to FERS. So, would my calculation go back to my temp time, before I was contributing to FERS? Or would it start when I became FERS eligible? Thanks in advance.
Let's say I was married for only 6 years… Is that long enough for my ex spouse to receive part of my pension when I retire? And for how long will she receive these benefits considering we were only married for 6 years? Thanx
I like how the gov't says that if you worked 30 years but married 20, your spouse is only worth 2/3. As if the first 10 years was worth a lot. Frankly if you have been married 20 years and you are not offered 50%, your lawyer sucks and you need to get another one.
That was a great explanation. Thanks.
what if you divorce and remarry the same person and then divorce them again..all while during the pension vesting years.
My situation is this.. was not married while active duty AF 8 years AF, Honorably Discharged in 1997 and married same year after separation from military, worked as a non federal employee from 1997 to 2007, then started back as a Fed Gov civilian in an internship as a GS 7. I bought my premarital military time back over 3 years time while married before going through a disastrous divorce in 2013 right after completing the internship and was a GS11. I wasnt married during the timeframe of military service that I bought back and was married and separated in 2012 divorced in 13. My NJ lawyer told me I had to Sign a QDRO for a portion of my retirement to my X. I dont feel that my x is entitled to this for reasons not discussed here… Basically she committed alot of fraud, theft by deception etc. and stole over $250K through alimony payments while she was cohabiting and engaged. I am wanting to know if I have any ability to get the QDRO overturned? I know you aren't a lawyer, but wondering what if anything you can recommend and what my options may be? I'm 52, a disabled vet really struggling to work with my disability for a long time now and am considering early retirement and trying to some plan for retirement together. Need help.