One of the best advantages of working for the federal government is the generous benefits and retirement package. However, when an employee goes through a divorce, these benefits could be at risk. Here is a look at what federal employees should start doing when headed into a divorce.
During the divorce, there will be endless decisions to be made that can have an impact on the couple and their children now and well into the future. It is vital to make these decisions from an informed standpoint. Federal employees should gather all of their relevant documents before their first meeting with a divorce attorney to facilitate the process.
A list of assets and debts is a good starting point, but employees should also obtain copies of statements and records such as their federal and state tax returns, pay stubs, mortgage and credit card statements and other financial information. It is also advisable to create a marital budget that shows current monthly expenses.
Federal employees will need statements pertaining to their Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS) Benefits, Thrift Savings Plan (TSP) and other federal benefits.
Learn More About The Division Of Federal Benefits
It is important to understand how federal benefits are divided in the case of a divorce. Here is a brief overview of the main considerations in some of the most common federal benefits.
Federal Employees Retirement System (FERS) Or Civil Service Retirement System (CSRS) Benefits
The main concern for many divorcing federal employees is their FERS or CSRS benefits, which are not governed by the rules for private sector pensions.
Federal employees will find a host of resources on the Office of Personnel Management’s (OPM) website. RI 84-1 explains how court-ordered benefits work in divorce cases, but it is a good idea to explore all the documentation there prior to meeting with a divorce attorney to develop a list of questions and concerns specific to your situation.
A fraction will be used to calculate the marital share of a federal pension in the divorce. This involves the number of months the spouse served as a federal employee earning pension during their marriage versus the total number of months during which they worked for the federal government. A spouse may be awarded as much as half of the marital share.
For employees who have not yet reached retirement age, a Court Order Acceptable for Processing (COAP) may be used. Because the marital share cannot be calculated until the employee retires, this order will be filed with the OPM until the total number of months of service is available.
Thrift Savings Plan (TSP)
Another major asset for many federal employees is a Thrift Savings Plan (TSP). The money that was contributed to this plan during the marriage is viewed by the court as marital property and is divided with a Retirement Benefits Court Order.
A spouse can request their share of the TSP in the form of a direct transfer, or they may ask for the money to be placed in a different type of retirement account. The spouse will not need to wait until the federal employee has retired to receive their share; the payment will be issued after the divorce is finalized.
Federal Employees Health Benefits (FEHB)
The spouses of federal employees who participate in FEHB will lose their coverage under the employee’s enrollment at midnight on the day their divorce is finalized, and the employee cannot be required to continue providing them with this coverage. They may, however, choose to continue their coverage under the Spouse Equity Act at their own expense.
Federal employees may continue covering other family members under their FEHB after the divorce. If they wish to switch to Self-Only or another plan, they must complete and submit Standard Form 2809.
Federal Employees Group Life Insurance (FEGLI)
One step that federal employees who are divorcing may wish to take is changing the beneficiary of their Federal Employees Group Life Insurance policy. It is not unusual for an employee to designate their spouse as the recipient of FEGLI proceeds when they pass away, and a divorce will not automatically change this.
Instead, employees must designate another beneficiary using Standard Form 2823. In some cases, a court order might require the employee to assign their FEGLI coverage to their former spouse or children or name them as its beneficiaries.
Choose An Attorney With Experience In Federal Employee Divorces
Divorces involving one or more federal employees can be very complicated, so hiring a divorce attorney with experience in these cases is highly recommended. They should also have experience practicing in the jurisdiction where the divorce will take place.
Federal coworkers who have recently divorced may be a good source of referrals. If there are children involved, be sure to seek attorneys who have experience in child custody cases.
Request A Consultation With SIEGELLAW
The experienced Maryland family law attorneys at SIEGELLAW can guide federal employees through the divorce process and make sure they receive the best representation and a fair settlement. Contact SIEGELLAW today to discuss your case and ensure your interests are protected.