Federal Benefits Settlement Checklist

1. FERS and CSRS annuity (civilian federal employees)

• Decide whether the former spouse gets a share of the annuity at all, and how the share is set: a fixed dollar amount, a percentage or fraction, or a formula. OPM can only pay a share it can compute from the order and its own records. A "marital share" formula (years of marriage during service divided by total service) is one common approach, but it must spell out every variable. See 5 CFR Part 838, Subpart C.
• State whether the share is figured on the gross annuity, the net annuity, or the self-only annuity. If the order is silent, OPM applies the share to the gross annuity. Gross means after any survivor-benefit reduction but before other deductions. Self-only means the unreduced annuity with no survivor benefit. A share can never exceed the net annuity. See 5 CFR Part 838, §§ 838.103, 838.211, 838.306.
• Decide whether the share rises with cost-of-living adjustments (COLAs). Unless the order says otherwise, OPM gives the former spouse's share the same COLA at the same time and rate as the employee annuity (§ 838.241).
• Remember the timing. OPM pays only from an annuity already in pay status, so a former spouse generally receives nothing until the employee retires. Payment can start no earlier than the first day of the second month after OPM receives the order (§§ 838.211, 838.231).
• Decide whether payments end if the former spouse remarries. If the order says so, OPM requires a certified statement from the former spouse before it pays (§ 838.221).
• Former spouse survivor annuity. Decide whether the former spouse will receive a survivor annuity after the employee dies, and at what level. The order must expressly award it and must be issued before the employee retires or dies (or be the first order dividing the marital property). See 5 CFR Part 838, Subpart H. Deadline: this cannot generally be added after retirement.
• Agree who pays for the survivor annuity. Its cost is taken out of the annuity. Under FERS the reduction is 10 percent for a full survivor annuity and 5 percent for a partial one (OPM). OPM will not accept an order that requires payment any other way. Unless the order says otherwise, OPM takes the reduction from the employee annuity (§ 838.807). Also check the combined limits on survivor benefits for a current and former spouse on the OPM survivor benefits page.
• Ask your attorney to draft the order in language OPM can process. OPM follows only specific, unambiguous instructions and will not fill gaps or look up state law. Orders that tell the retiree (rather than OPM) to pay the former spouse are not acceptable, and an order labeled a "QDRO" must refer to Part 838. See 5 CFR Part 838 and OPM's court-ordered benefits guide (RI 84-1).
• Plan the filing. The former spouse applies to OPM in writing with a certified copy of the order and a statement that it is still in force (§ 838.221).

2. Thrift Savings Plan (TSP)

• Decide how the account is divided: a dollar amount or a percentage of the vested balance, as of an entitlement date that is not in the future. See the TSP booklet Court Orders and Powers of Attorney.
• Use the right kind of order. TSP divides an account only under a Retirement Benefits Court Order (RBCO), certified and signed by a judge or other state-approved court official. Private-sector QDRO rules do not apply to the TSP. See tsp.gov: Family Changes.
• Expect a freeze. A qualifying order freezes the account to new loans and withdrawals while the court action is pending.
• Address outstanding loans. Unless the order says otherwise, the loan balance counts in the account balance used to figure the award. The order may exclude it. The order cannot make the former spouse responsible for repaying the participant's loan (TSP booklet, above).
• Plan the tax treatment. For a spouse or former spouse, the traditional portion of a payment is taxable to the payee in the year paid, and Roth amounts are not taxed. The payee may roll the payment into a traditional IRA, a Roth IRA, an eligible employer plan, or their own TSP account (TSP booklet, above). Ask a tax professional how this applies to you.
• Confirm current rules on tsp.gov or the ThriftLine before the order is finalized.

3. Military retired pay (USFSPA)

• Decide the award as a fixed dollar amount or a percentage of disposable retired pay (gross pay less allowable deductions). DFAS treats a percentage award as a percentage of disposable retired pay. See DFAS: USFSPA legal.
• The 10/10 rule. For DFAS to pay the former spouse directly, the couple must have been married for 10 years or more and the member must have performed at least 10 years of creditable service. If the rule is not met, the award may still be valid, but the member pays the former spouse. Direct payments cannot exceed 50 percent of disposable income (DFAS FAQs).
• Frozen benefit rule. For divorces entered after December 23, 2016, where the order becomes final before retirement, disposable pay for the award is generally limited to the member's basic pay at the time of the order, adjusted for cost-of-living increases. Talk with your attorney about how this affects the formula (DFAS).
• VA disability pay. In Howell v. Howell (2017) the Supreme Court held that a state court may not order a veteran to repay or make up a former spouse's share of retired pay that the veteran waived to receive VA disability benefits. A court can still consider possible waivers when it sets the property division or support. Decide how the agreement handles this risk.
• Survivor Benefit Plan (SBP) for the former spouse. Decide whether SBP will cover the former spouse, and at what level. Deadline: a former spouse's "deemed election" request must reach DFAS within one year of the order requiring former spouse SBP coverage. A retiree who has already retired must make the former spouse election within one year of the divorce decree. See DFAS: SBP coverage.
• Agree who pays the SBP cost and how the award is adjusted for it.
• Plan the DFAS application. Complete applications that meet the rules are paid no later than 90 days after the effective service date, or after the member becomes entitled to retired pay (DFAS). Your attorney will use the DFAS application materials.

4. Foreign Service retirement (FSRDS and FSPS)

• Check whether the default rule applies. A former spouse is entitled by statute to a share if married for at least 10 years during the participant's creditable service, with at least 5 of those years while the participant was in the Foreign Service. The default is 50 percent of the annuity if married throughout the creditable service, or a pro rata share of that 50 percent if not. See 22 U.S.C. § 4071j.
• Decide whether to keep or change the default. A spousal agreement or court order can override it, including waiving the share or awarding one when the marriage was shorter than 10 years (State Department guidance on AFSA.org).
• Decide the survivor annuity. The default includes a pro rata share of the survivor benefit, subject to the same override (22 U.S.C. § 4071j).
• Note the remarriage rule. A former spouse who remarries before age 55, before the benefit begins, does not qualify (22 U.S.C. § 4071j).
• Send the divorce documents to the State Department's retirement office before retirement. The guidance above encourages sending them at or near the divorce, and says a court order generally must be issued within two years after the divorce becomes final. Confirm current timing with the State Department and your attorney.

5. Health coverage: FEHB, TRICARE and CHCBP

• FEHB ends at divorce. A former spouse's FEHB coverage ends when the divorce is final, with a 31-day extension, even if a court order says otherwise. Options are Spouse Equity, Temporary Continuation of Coverage, or converting to an individual policy. The enrollee can change enrollment within 60 days of the divorce. See OPM: separated or getting divorced.
• Spouse Equity. The former spouse must have been covered as a family member at least one day in the 18 months before the marriage ended, must be entitled to a portion of the annuity or to a former spouse survivor annuity, and must not have remarried before age 55. Deadline: apply within 60 days after the marriage ends (other 60-day windows follow OPM's notice of eligibility). There is no government contribution, so the former spouse pays the full premium. See OPM: Former Spouses. Because eligibility depends on an annuity or survivor award, settle that award first.
• TRICARE 20/20/20. An unremarried former spouse is covered in their own right if the sponsor has 20 years of creditable service, the marriage lasted 20 years, and all 20 years of marriage overlap the 20 years of service. See TRICARE: Former Spouses.
• TRICARE 20/20/15. Same, but only 15 years of the marriage overlap the service. For divorces on or after September 29, 1988, coverage lasts one year from the divorce or annulment date. Notify DMDC/DEERS as soon as the divorce is final. Remarriage, or coverage under an employer-sponsored health plan, ends eligibility (TRICARE page above).
• CHCBP. A former spouse who loses TRICARE can buy Continued Health Care Benefit Program coverage. Deadline: within 60 days of losing TRICARE eligibility. See TRICARE: Purchasing CHCBP.
• Decide who covers the children's health insurance, and record who pays the premiums.

6. Life insurance and security clearance

• FEGLI. Option C coverage on a spouse ends when the marriage legally ends, even if premiums continue. Divorce lets the enrollee make new elections within 60 days. A FEGLI beneficiary designation can be changed at any time, and proceeds may be paid under a valid court order. See OPM.
• Decide whether either spouse must carry life insurance to secure support or a pension share, and who is named beneficiary.
• If either spouse holds a security clearance, ask your security officer what must be reported about a change in marital status, and when. Reporting rules are set by each agency, so this page gives no specifics.

7. Who drafts what

• Each spouse has chosen an independent attorney to review the agreement.
• Someone is assigned to draft each order, with a date.
• Pre-submission review is planned where the agency offers it, and each deadline above is on a calendar.

How mediation helps

Federal benefits are easy to overlook and hard to fix after the divorce is final. Mediation gives you time to go through each item, trade one against another (for example, a larger pension share against keeping the house), and write down exactly what you agreed. Sara M. Khan, J.D., spent about 20 years in and around federal agencies, so terms like FERS, TSP and SBP are familiar. She is a private mediator, not Virginia court-certified, so court-referred cases go to a certified mediator. Mediation is available in Northern Virginia and online in all 50 states.

Learn more: federal employee divorce mediation, military divorce mediation, Foreign Service divorce mediation.

This checklist is general information, not legal advice. Olive Branch Mediation is a private mediation practice, not a law firm. Benefit rules change; confirm each item with the agency and an attorney. Sources are linked in each item.