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What happens to my FERS pension if I get a divorce?

On Behalf of | Jul 2, 2021 | Blog, Divorce

If you are a federal employee living in Texas, it is important to understand what will happen to your pension should you get a divorce. Although no one goes into marriage thinking they will end up in divorce, the fact is that many marriages do end. If you are part of the Federal Employee Retirement System, there are thing you need to know.

Court-ordered divorce decree

Although you may not realize it, as a federal employee, you could be facing a complex property division process, even if you and your spouse own no other property. The courts can divide your your annuity and require you to continue covering your ex-spouse on your health insurance. The court can also require you to provide certain distributions from your Thrift Savings Plan account, garnish an annuity to pay alimony or child support, and force you to continue life insurance coverage on a former spouse.

Federal law and spouse equity

One of the reasons FERS can become complicated is that federal law includes spouse equity clauses which could make a domestic relations order invalid under the Civil Service or FERS system. State court orders also cannot override benefits payable under CSRS and FERS. Under the Employee Retirement Income Security Act, your ex-spouse could begin collecting their share of your pension as soon as you reach retirement age, even if you continue working. However, under FERS, they are not permitted to do so until your benefit is payable. In other words, you will have to retire and receive your own pension before your ex-spouse is eligible.

Calculating spousal benefits

In most cases, your ex-spouse will be eligible for half the pension you earned while you were married. If your pension is calculated on $100,000 with a multiplier of 1%, your annual FERS pension would be $30,000. If you and your ex-spouse were married 10 or more years, your ex-spouse would receive around $5,000 of your pension while you would receive the remaining $25,000. If you are a federal employee, you need to work with an attorney who not only understands complex property division but is also well-versed in federal pension law.

Divorce can be complicated and stressful under any circumstances. If you are a federal employee, you need to work with an attorney who can help guide you through the complex pension system to be sure your settlement is fair and equitable as well as to be sure that there are no surprises when you retire.