Court-Ordered Benefits for Former Spouses

RI 84-1
Revised February 1999
Previous editions are not usable

Introduction

This pamphlet is for Federal employees or their spouses who want general information about how their retirement and insurance can be affected by a court order related to a divorce or separation. Attorneys who prepare court orders need to use the law and regulations, which are available in another publication that is described on page 2.

What Benefits Can be Affected By a Court Order?

A court order related to a divorce or separation can -

1. Divide a Civil Service Retirement System (CSRS) or Federal Employees' Retirement System (FERS) annuity;
   
   
2. Divide a refund of CSRS or FERS employee retirement contributions;
   
   
3. Provide a survivor annuity payable upon the death of an employee or retiree;
   
   
4. Permit a former spouse to continue coverage under the Federal Employees Health Benefits (FEHB) program; and
   
   
5. Require an employee or retiree to assign his or her Federal Employees' Group Life Insurance (FEGLI) coverage to a former spouse or children.
   
   
6. Require an employee to name his or her former spouse or children or beneficiaries under FEGLI.

In addition, retirement benefits may be garnished for alimony, child support, or in cases involving child abuse.

Do the Same Rules that Apply to Private Sector Employees Apply to Federal Employees and Retirees?

No. The rules governing Federal employees retirement benefits are in title 5 of the United States Code and title 5, part 838, of the Code of Federal Regulations.

Court orders that affect private sector pensions are governed by the Employee Retirement Income Security Act (ERISA). However, CSRS and FERS are exempted from ERISA as governmental plans.

Court orders that are used to divide private sector pension plans, called Qualified Domestic Relations Orders or "QUADROS," may not be valid under the FERS or CSRS. For example, under ERISA, the former spouse's share of the benefit can begin when the employee reaches the minimum retirement age, even if the employee is still working. However, this benefit is not available under the CSRS or FERS because court orders cannot affect a retirement benefit until the benefit is actually payable to the former Federal employee. This means that the employee must be eligible for the benefit and must have made a proper application for the benefit.

Be sure that the person who is drafting a court order that is intended to affect a Federal employee or annuitant's CSRS or FERS benefit is familiar with CSRS/FERS rules.

Court orders affecting Federal Employees Health Benefits (FEHB) are governed by 5 CFR 890. Court orders affecting Federal Employees Group Life Insurance (FEGLI) are governed by 5 CFR 870.

Where Does My Attorney Find the Rules that Apply to Court Orders Affecting CSRS, FERS, FEHB, and FEGLI Benefits?

The provisions of law that govern Civil Service Retirement System (CSRS) benefits are in sections 8341, 8342, 8345, and 8346, of title 5 of the United States Code. The law governing Federal Employees Retirement System (FERS) benefits is in sections 8401, 8424, 8445, 8467, and 8470 of title 5 of the United States Code. The regulations covering both CSRS and FERS benefits are in part 838 of Title 5, Code of Federal Regulations. The regulations contain extensive model language that the U.S. Office of Personnel Management (OPM) encourages attorneys to use in preparing court orders.

A former spouse may be able to continue Federal Employees Health Benefits (FEHB) coverage if he or she meets the requirements in sections 8901 and 8905 of title 5 of the United States Code concerning health benefits. The regulations are in subpart H of part 890 of title 5 of the Code of Federal Regulations.

Assignments of Federal Employees' Group Life Insurance (FEGLI) are authorized by section 8706 of Title 5, United States Code. Regulations are found in subpart I of part 870 of title 5 of the Code of Federal Regulations. Court orders and beneficiaries are found in section 8705 of 5 United States Code. Regulations are found in subpart H of part 870 of title 5 of the Code of Federal Regulations.

These provisions of law, along with the retirement, health insurance, and life insurance, regulations are contained in "A Handbook for Attorneys on Court-ordered Retirement, Health Benefits, and Life Insurance Under the Civil Service Retirement System, Federal Employees' Retirement System, Federal Employees Health Benefits Program, and Federal Employees' Group Life Insurance Program," RI 83-116. The booklet comes with a computer diskette that contains the model language in three common word processor formats, as well as the printed version in the text.

OPM's regulations on garnishment may be found in parts 581 and 582 of Title 5, Code of Federal Regulations.

Please note that a different agency, the Federal Retirement Thrift Investment Board (the Board) administers the Thrift Savings Plan for Federal employees. The Board's regulations governing court orders are in subparts G and I of part 1650 of Title 5, Code of Federal Regulations. A recent pamphlet, Information About Court Orders, TSP BK 11 is available from the Thrift Savings Plan, 1250 H Street NW, Washington DC 20005. The Web Site for the Thrift Savings Plan is http://www.tsp.gov.