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Military Members Keep Full Pension Through Divorce Proceedings

Ex-Spouse Law/Retiree Cola
Tom Philpott | October 20, 2006

Ex-Spouse Law Defies Change; Retiree Cola Set At 3.3%

A 1982 law that allows state courts to divide military retirement as marital property in divorce proceedings has grown skin of armor , making it impenetrable to court challenge or legislative change.

That, at least, is how it must seem to long-time critics of the Uniformed Services Former Spouses Protection Act (USFSPA) and to bureaucrats seeking changes just to improve how the law is administered.

Last month a federal appeals court rejected a host of constitutional challenges to the USFSPA brought by 58 divorced retirees and active duty members. Also last month, Congress declined to allow the first minor adjustments to the ex-spouse law in 14 years, shelving three Senate-passed provisions. The reason: Lawmakers were peppered with complaints from divorced members and ex-spouses, some saying more than planned should be done to ease their grievances and others wanted the law be left alone.

There is still power going through the third rail,” said a congressional staff member of the wave of complaints. He was comparing the political hassle of amending the USFSPA to the deadly “third rail ” that lawmakers believe they touch when they try to change the Social Security program.

Divorced members who continue to challenge the legality of the USFSPA in court suffered their latest disappointment Sept. 18 when the U.S. Court of Appeals for the Fourth Circuit, in Richmond, Va., ruled in the Adkins v. Rumsfeld case.

The three-judge panel upheld a district court judge’s rejection of the lawsuit, examining the various constitutional challenges raised and finding none has merit. The plaintiffs in this case raised money for their legal challenge through a limited liability corporation they established called the USFSPA Legal Support Group. The ULSG has almost 2500 members, half of whom donated money, the appeals court said.

Their lawsuit argues that the ex-spouse law violates divorced members’ rights to due process and equal protection. Persons who joined the military before the law was enacted should be protected from its effect because they served with the expectation of receiving full retired pay, not of seeing it divided as martial property, plaintiffs argued.

Also, the lawsuit contends, states don’t apply the law uniformly, which steps on Congress’ authority “to raise and support armies.” Plaintiffs also claim the law is discriminatory toward female service members. Their reasoning on this point is that the law was enacted so that ex-spouses are not left destitute after military marriages dissolve. Yet the 24-year-old law fails to recognize the number of women now in service, and the reality that their male ex-spouses are more likely to have independent incomes that lessen their financial need to share in military retired pay.

Writing for the appeals court majority opinion, Judge M. Blane Michael considered and dismissed each of these arguments. It is incorrect to allege that before the USFSPA was enacted, Michael wrote, that Congress had promised to shield military retirement from valid court orders. Some states were dividing retired pay until 1981 when the Supreme Court ruled in its McCarthy decision that such division was not back by law. Congress promptly nullified that decision by passing the USFSPA so it can’t be held that a promised benefit was taken in violation of due process of law.

Also, the appeals court found, because USFSPA gives state courts the option to divide military retirement upon divorce, it “tolerates variation among the states in how that pay is actually divided between spouses in individual cases. ” Congress can prescribe uniformity regarding treatment of service personnel but with this law it chose not to do so. Therefore, there’s no constitutional encroachment by state courts on federal authority.

Regarding the law’s impact on the guarantee of equal protection, Michael wrote that the USFSPA “does not distinguish between men and women but between retired service members and their former spouses.” That distinction, he concluded, is based on a legitimate government interest in the “personal and economic sacrifices” of spouses to sustain marriages through the rigors of service life.

Michael also addressed the argument that the USFSPA is inequitable because it allows ex-spouses access to retired pay without the same service obligation that retirees continue to face including possibility of recall to duty.

“This argument presupposes that the retirement pay can only be characterized as compensation for service rendered during retirement. The presupposition is false,” Michael wrote. “Although military retirement pay has some unique features, it also resembles an ordinary civilian pension in many respects, and Congress grasped that resemblance in passing the Act.”

The USLG intends to appeal the decision to the Supreme Court.

Congress, meanwhile, refuses to make any change to the USFSPA or even to hold hearings. Those Senate-passed provisions knocked from the final defense authorization bill would have repealed the “10-year rule ” that dictates what court orders the Defense Finance and Accounts Service deems eligible for automatic payment of retired pay to former spouses.

Another provision would have directed DFAS to honor all valid court orders involving making cost-of-living adjustments to ex-spouse shares of retirement. A third change would have ended a DFAS requirement to notify retirees when DFAS receives a court order directing division of retired pay.

RETIREE COLA SET – Military and federal civilian retirees, Social Security recipients, survivor benefit annuitants, and veterans drawing disability compensation will see a 3.3 percent cost-of-living adjustment, effective Dec. 1 and payable in January. The increase matches inflation for a market basket of goods and services, from third quarter of 2005 to third quarter of 2006, as measured by the government’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W ).