FERS & Equitable Distribution

In March of 2023, we published a blog about how to split retirement accounts during a divorce. Because we have offices in Northern Virginia and North Carolina, our family law attorneys work closely with military members and people the government employs. In terms of the divorce process, a civilian and a Marine, for instance, will file the same way through the same courts. However, government employees and military members have unique assets—and their retirement accounts speak to this. 

Our previous blog briefly mentioned “FERS,” the Federal Employee Retirement System. Federal civilian employees, such as those working for the Federal Bureau of Investigation, use this. FERS replaced the Civil Service Retirement System (CSRS) in 1986, which is a three-tiered system. It includes the Basic Benefit Plan, Thrift Savings Plan (TSP), and Social Security. Let’s look at how these can be divided during a divorce. 

Dividing The Three  

The Basic Benefit Plan is a pension plan in which employees can receive a monthly annuity. The money they receive is based on their years of service and their highest average salary. The longer your work, the higher the percentage. The Basic Benefit Plan is viewed as marital property, which can be subject to equitable distribution. It will be marital property if earned while you and your spouse were married and before you were separated. It can be divided in several ways.

  • A percentage (e.g., 60/40, 50/50)
  • A flat amount 
  • A pro rata share (I.e., a pro-rata share is a proportional distribution based on a formula)

The Thrift Savings Plan is a retirement savings plan, which can be viewed as similar to a 401(k). Government employees contribute a position of either their pre-tax or after-tax dollars. Depending on the job, the government may match the employee’s contributions. In Virginia, the courts can divide this but must do so in accordance with a retirement benefits court order. The order will be part of a property settlement agreement, and the employee’s spouse will likely receive a percentage of the total of a fixed sum. 

Employees who are part of FERS are entitled to Social Security because they pay Social Security taxes. Like non-government employees, these benefits are based on their earnings history and when they start drawing benefits. Virginia does not have the authority to divide a federal employee’s Social Security benefits as part of the divorce process. If you were married to someone for more than ten years, at retirement, you could choose to keep your benefits or use the spousal benefits from the marriage—whichever is greater. 

Select Law Partners, PLLC

As we said at the beginning, Virginia and North Carolina are homes for over a hundred thousand members of the military and federal employees. We have extensive experience handling special circumstances regarding their assets and how they are treated during a divorce. If you have further questions or want to meet with one of our attorneys, contact our office today to schedule your consultation.

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Matt Kurylo

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