Comments on the 1996 Amendment to Civil Service Retirement System and Federal Employees Retirement System Statutes Relating to Payments to a Former Spouse Under 10 USC Section 1408
Section 637 of Public Law 104-201 added a new paragraph to the CSRS and FERS retirement system statutes. These provisions address the matter of the waiver of military retired pay in order to credit military service for an enhanced civil service retirement. The Uniformed Services Former Spouses' Protection Act defines disposable retired pay as follows:
(4) The term "disposable retired pay" means the total monthly retired or retainer pay to which a member is entitled less amounts which--
(B) are deducted from the retired pay of such member as a result of forfeitures of retired pay ordered by a court-martial or as a result of a waiver of retired pay required by law in order to receive compensation under title 5 or title 38;
The amendments discussed in this comment concern the "title 38" waiver. Based on the definition of disposable retired pay, if the member waives military retirement in order to credit it for civil service retirement, it reduces the payments to the former spouse from the military because such waived military retired pay is deducted in arriving at disposable retired pay. Counsel who were not aware of this who represented the non-member spouse usually did not include protection for the non-member spouse from such waiver.
These amendments to the CSRS and FERS retirement statutes, in effect, say that the military member cannot receive credit for waived military retired pay unless the member authorizes appropriate payments to the former spouse out of the civil service retirement. The amendments are effective after January 1, 1997.
Following is the text of the amendments.
Sec. 637. PREVENTION OF CIRCUMVENTION OF COURT ORDER BY WAIVER OF RETIRED PAY TO ENHANCE CIVIL SERVICE RETIREMENT ANNUITY.
(a) Civil Service Retirement and Disability System.--(1) Subsection (c) of section 8332 of title 5, United States Code, is amended by adding at the end the following new paragraph:
"(4) If, after January 1, 1997, an employee or Member waives retired pay that is subject to a court order for which there has been effective service on the Secretary concerned for purposes of section 1408 of title 10, the military service on which the retired pay is based may be credited as service for purposes of this subchapter only if the employee or Member authorizes the Director to deduct and withhold from the annuity payable to the employee or Member under this subchapter an amount equal to the amount that, if the annuity payment was instead a payment of the employee's or Member's retired pay, would have been deducted and withheld and paid to the former spouse covered by the court order under such section 1408. The amount deducted and withheld under this paragraph shall be paid to that former spouse. The period of civil service employment by the employee or Member shall not be taken into consideration in determining the amount of the deductions and withholding or the amount of the payment to the former spouse. The Director of the Office of Personnel Management shall prescribe regulations to carry out this paragraph.".
Paragraph (1) of such subsection is amended by striking out "Except as provided in paragraph (2)" and inserting in lieu thereof "Except as provided in paragraphs (2) and (4)".
(b) Federal Employees' Retirement System.--(1) Subsection (c) of section 8411 of title 5, United States Code, is amended by adding at the end the following new paragraph:
"(5) If, after January 1, 1997, an employee or Member waives retired pay that is subject to a court order for which there has been effective service on the Secretary concerned for purposes of section 1408 of title 10, the military service on which the retired pay is based may be credited as service for purposes of this chapter only if the employee or Member authorizes the Director to deduct and withhold from the annuity payable to the employee or Member under this subchapter an amount equal to the amount that, if the annuity payment was instead a payment of the employee's or Member's retired pay, would have been deducted and withheld and paid to the former spouse covered by the court order under such section 1408. The amount deducted and withheld under this paragraph shall be paid to that former spouse. The period of civil service employment by the employee or Member shall not be taken into consideration in determining the amount of the deductions and withholding or the amount of the payment to the former spouse. The Director of the Office of Personnel Management shall prescribe regulations to carry out this paragraph.".
(2) Paragraph (1) of such subsection is amended by striking "Except as provided in paragraph (2) or (3)" and inserting "Except as provided in paragraphs (2), (3), and (5)".
(c) Effective Date.--The amendments made by subsections (a) and (b) shall take effect on January 1, 1997.