2 Feds, Divorce and Pension
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Anonymous
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Ex-dh and I are both in FERS, same pay grade at same agency. When we got divorced 2 years ago, our order stated that I get 50% of his pension and survivors benefits. He gets 50% of my pension and survivors benefits (identical orders). I guess we didn't really think about this, but now-both of us would rather have just kept our own pension and survivors benefits. Also, it states that if I, or he, remarries before 55, the married one does not get survivor benefits. I'm not planning to remarry but he may want to.
We live in FL (for legal reference). Is it possible, or even legal, for us to change the order? Or is that not doable? I just don't like the idea of thinking about him in my retirement planning. We're amicable, but I don't want to consider him LOL. What happens if one of us retires first? Yes, I'm kicking myself for not understanding this 2 years ago, and he doesn't understand it at all. All the other stuff is done (the tsp stuff). |
Anonymous
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You would be losing out on getting your spousal share of his retirement. Why would you want to do that? That is a hefty price to pay just to erase him from your thoughts.
I can see why he would want to drop you on his survivor benefits (i.e. b/c he wants to take care of soon-to-be-wife #2). It would be a really dumb financial move for you to release your claim to survivor benefits on his retirement. Is it possible to change the order --- sure. It would just be really dumb. If you want to do it, then he should be legally obligated to pay you a sum that you can invest today to pay out an annuity that would be equivalent to the survivor benefits. But, instead of going through the hassle of all that.... he should just take out life insurance on himself with wife #2 as the beneficiary and call it a day. You should keep your survivor benefits. He probably won't lose much by signing away HIS right to your survivor benefits b/c statistically speaking -- women tend to outlive men. So, most likely he wouldn't have received any payments b/c you wouldn't have died first. You are the big loser if you do this. |
Anonymous
| Maybe she has integrity and doesn't want to mooch off of her ex. |
Anonymous
| I would think a judge would agree given it really makes no sense if both are worth about the same amount. The survivor benefit order may be how it's written. If he gets remarried, you may not be eligible anymore. If one retires first, the other gets that pension. |
Anonymous
Disclaimer: I am a lawyer, but I am not your lawyer. First, to answer the question you asked: yes, divorce terms generally can be modified. You'd need to file a motion for modification with the court. (Not only am I not your lawyer, I not licensed in Florida, so I have no idea how things work there.) But you might want to double-check that things work how you think they work. I think that what you're describing is a function of how FERS survivor benefits works. If you and your ex stayed married until retirement, the retiring spouse could opt to take a reduced benefit in exchange for the other spouse to get 50% of the retiring spouse's benefits when the retiring spouse died. You can set up do the same thing when you divorce, but it requires a court order. So your divorce decree says that if your ex dies before you do, you get FERS benefits equal to half his benefits; if you die first, he gets FERS benefits equal to half of yours. This does not mean that he takes half of your benefits—you still get your benefits but he gets an amount equal to 50% of those benefits if you die before he does (and vice versa). See this page, in the sections under "Former Spouse": https://www.opm.gov/retirement-center/fers-information/survivors/ Another detail that may not matter in your situation: you'd need to modify the court order before retiring. "While court orders can be changed before the employee retires or dies, in general court orders cannot be modified to affect survivor benefits after the employee retires or dies after retiring." https://www.opm.gov/retirement-center/publications-forms/pamphlets/ri84-1.pdf (p. 6) Before changing anything, I'd suggest talking to someone who can walk you through the financial implications of that change. You'll want to talk to someone who is familiar with how FERS survivor benefits work for ex-spouses, though. |
Anonymous
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OP here- to be clear, he and I would be happy to BOTH just keep our own pensions.
Nobody is mooching LOL |
Anonymous
| Is it 50% of the retirement benefits or 50% of what accrued during the marriage? For example if you were married 10 years and retired with 20 years, you get 25%. |
Anonymous
| OP, just to clarify: do you have a court order in which each of you get 50% of the other's pension, or do you just have a court order for survivor benefits set up on the other's pension? If the former, I'm curious why your attorneys set it up that way. Is there some hidden benefit under FERS for doing that, or is that just what you (or the court) thought was fair? |
Anonymous
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17:42- I agree, I don't think it works how I think it works! It's confusing and especially with us both being feds. I need to find someone here who understands FERS.
I guess what I am imagining happening is- say I retire and my pension is $1000 (just using a round number for clarity). I retire. I get $500 per month. He gets my other $500. If he retires, same. What if he, or I , retire first? Or die? |
Anonymous
50%. All of both of our years of service were during the marriage. |
Anonymous
What does the court order say? Because while I can guess based on the OPM sites, I'm kind of curious how it works in practice. In theory, I think you're right that if the court order splits your benefits 50/50, if your benefit is $1000/month then you get $500 and he gets $500. And if his is $1000/month, then you get $500 and he gets $500. So you both get $1000—if you both retire at the same time at the same benefit amount. But what if you retire at 62 and he doesn't retire until, say, 77? Does he get $500/mo. for the 15 years when he's still working? Or do his benefits only start once he retires too—in which case you'd get $1000/mo until he retires, at which point you get $500/mo (inflation-adjusted) plus half of his pension (which would be higher, since has more years in his benefits calculation), and he gets $500/mo plus the other half of his pension? The latter seems fairer, but I have no idea what really happens. Then there's the spousal benefit aspect. Normally, electing a survivor benefit takes 10% off your own benefit amount. So if your pension would be $1000/month without a survivor benefit, you could get $900/month in exchange for your spouse getting $450/month after you die. (Or you could take a 5% hit for a 25% benefit.) A court order is needed to set up a survivor benefit for ex-spouses. I assume that includes the 10% or 5% hit to benefits (otherwise you could set up a pension for an ex-spouse for free, which would be a nice gesture, but odd). But if that's combined with splitting the pension, does the reduction happen to both sides of the split? In other words, if you take a "full" survivor benefit for your ex spouse and the pension is split, does that mean you split $900 two ways ($450 each)? Lots of questions, and I don't know the answers. But what I am sure of is that if you changing the 50/50 split or survivor benefit, someone is going to be better off and someone is going to be worse off. For example, what if your pension ends up at $1000 and his is $1500? Once you're both retired, you'd each be getting $1500/month. Good for you, sucks for your ex. If you're both retired for 30 years, that's an extra $180,000, not adjusting for inflation or COLA increases. Is the simplicity of each of you having your own pension worth that much to you? OTOH, maybe he's the one who would get the extra $180,000. Or maybe it's more. Or less. My point: you should figure out the numbers before you make a decision, because the difference could be big. |
Anonymous
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Keep in mind if you are getting FERS survivors benefits you can stay on FEHBP (I assume this is true in your situation as well bit might be worth confirming)
This doesn’t matter if you stay a fed, but it might be handy if you leave federal service and he doesn’t. |
Anonymous
Obviously, that should say you'd each be getting $1250/month. So make the example $1000 and $2000 a month to make the math in the rest of the example work out. But hopefully you get what I meant. |
Anonymous
You ARE keeping your own pensions. That's why it's so stupid to give up your 50% right to his if he dies first. The cost to each of you is that you both get 10% less than the full FERS annuity benefit. So, if you outlive your ex-spouse, you would be giving up receiving 50% of his pension when he dies. Statistically you are likely to outlive him. If he outlives you, then he is entitled to receive 50% of your FERS pension. It could happen that you die first, but it's less likely. Therefore, OF COURSE he's happy to make a deal where he gives up the chance to have 50% of your pension when you die -- b/c it is more likely that you will outlive him. He is NOT taking 50% of your pension while you are living. You are not getting 50% of his pension while he is living. This is long-term financial protection for you. NO sane financial advisor or attorney would advise you to give up the survivor annuity. |
Anonymous
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If you want to give up any right to his actual pension -- fine. But, do not give up your right to survivor benefits.
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