Changes to Military Retirement Benefits

Retirement benefits can be a substantial asset up for division in the context of a divorce action. The same is true in the case of military retirement benefits. There is a certain time requirement for service in order to be eligible for military retirement. Once this threshold is reached, a spouse is then entitled to their share of the military retirement benefits no matter how insignificant. Under the ten year rule, where the parties have been married for 10 years and the service member has accumulated 10 years of service, DFAS (Defense Finance and Accounting Services) can pay the spouse directly. When the ten year rule has not been met, the spouse can still receive a portion of the military retirement benefits however the service member will be responsible to pay the spouse themselves. A court can only award a division of a military pension if it has jurisdiction over the service member via residence, domicile or consent.

As of January 2018, the framework for military retirement benefits is changing. All new service members will automatically be enrolled into the blended retirement system which is a combination of the traditional military pension as well as a Thrift Savings Plan. Members with up to twelve years of service can elect to switch to the new blended retirement system. There is a new continuation pay option between years eight and twelve of service contingent on an additional three years of service and a new lump sum payment option. The new rules will also freeze members pay grade as of the time of divorce for use in calculating the marital portion of the pension. This will have the effect of reducing the share to the spouse.