You can save money for Col Smith in several ways in negotiations over his pension. The first one to use a set dollar amount in specifying the pension share for his wife upon divorce. This means that the spousal entitlement is calculated (usually with 50% of the marital share as the model) and then converted in today’s dollars to a specific monetary amount, such as: “Mrs. Smith shall receive $495 a month from the disposable retired pay of Col Smith.” This method of dividing the pension, if accepted by the other side, means that all future increases in Col Smith’s pay belong to him and, upon retirement, the cost-of-living adjustments (COLAs) which are applied to retired pay go solely to him. She receives none of these benefits. The COLA, when applied solely to Col Smith’s pension, will roughly double its value over twenty years.
Another option, if the first won’t work, is freezing the benefit for Mrs. Smith at the rank and years of service of her husband at the time of filing the complaint for divorce. That will mean that we’re dividing the pension of a colonel right now, not a two-star general, which he might be at the time of retirement.
Col Smith will also want to try to keep the denominator of the marital fraction as the total years of creditable military service, not the years up to the date of filing the complaint for divorce. In doing this, we are creating a marital fraction that is constantly shrinking in absolute value, not one that, in fairness, should be fixed as of the later date.
A third step would be to state that we are dividing the retired pay of a colonel with a certain number of creditable years of service, fixing the years of service at the date of filing the complaint for divorce. The years of creditable service would usually be stated in even numbers, so we could say “a colonel over 20” or “a sergeant over 16” to show how many years of service at that rank. This likewise keeps the divisible pay down.
Finally, we would want to fix the pay tables involved as of the date of the filing of the complaint for divorce. In doing this, we insulate Mrs. Smith from any future congressional pay raises; all of these accrue solely to the benefit of Col Smith.
If we specify these in the pension division clause for Col Smith, it could mean a savings of tens or hundreds of thousands of dollars for him, in comparison to using his final rank upon retirement, and the pay tables that would apply when he retires.
Because military divorce requires special knowledge of laws that do not apply to civilian divorce, it may be wise to speak with an experienced divorce lawyer who handles military divorce cases.
Contact the Law Offices of Renee Lazar at 978-844-4095 to schedule a free one hour consultation.