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Dividing Military Reserve Early Retirement Pay
Brian Mork, Ph.D. [Rev 2.32]
marriage asset of military
retirement pay due to divorce, Active Duty and Reserve retirement are
similar, but not the same. This web page describes an issue unique to military Reserve (or National Guard) members. When the marriage occurred wholly before or spanned
January 28, 2008 and military duty extended beyond that date, these issues need to be considered.
your concerns are more general in nature, see other
web pages describing Dual Coverture
methods, Promotion Enhancement,
or Area Method
calculations (with example divisions). There is also a Facebook.com discussion group.
This web page is about early Reserve retirement created by Federal law 10
USC 12371(f)(2)(A) enacted in January 2008, which does not negatively impact or commingle in any
way with the traditional Reserve retirement described in 10 USC 12371(f)(1). Do not confuse early Reserve retirement with civilian
buy-outs to retire early, nor military buy-outs like SSBs or VSIs. In almost all jurisdictions, dividing Reserve early retirement is
an issue of first impression.
You will find that if a court is
familar with military retirements, it is probably
limited to Active Duty Retirement. Beyond that, a court must
learn about Reserve retirements and it's often a challenge
to introduce even the concept of retirement point value rather than days. Resources I publish are here
to help you; please feel free to send me an email with questions.
This web page includes:
Background about Early Retirement
Litigation about military retirement typically center around the the amount
of military payments to be
received each month by the non-military ex-spouse. If there is
possibility for future military promotions after the divorce, you
should read about how to properly do calculations to handle promotion enhancements after divorce. In 2017, the Federal NDAA mandated a common method across the nation.
In contrast to those issues, the salient point on this web page is that
a military retirement asset value is the multiplication of the amount each month multiplied by which months
payment is received. Up until 2008, this distinction has not
mattered because both amount of checks and number of checks comingled
together. After January 2008, the comingling no longer happens.
As of January 2008, a new Federal Law offers a retention bonus to military Reservists in the form of an additional and distinct
retirement. For a
Reserve military retirement, there are now two quantifiable
different military retirements to be individually assessed to
be a marital asset or not. The two retirements do not comingle in
any way, and the new retirement does not modify or affect the
retirement in any way.
Retirement pay paid after a
Reserve military member turns 60 is the traditional retirement that
courts may be familiar with. For a Reservist,
the new 2008 law authorizes retirement payments before age 60.
Specifically, for every 90 days of additional days of duty done after
28 January 2008, three additional monthly retirement checks are
In the simplest case, if a marriage ended before 28
2008, the before-age-60 payments are not a marital assets at all and
are not subject to division.
The magnitude of this asset is equal in value to a house or real-estate
property. For an O-6 retiring with 6300 duty points
and 27 months of early credit, the early retirement asset is worth 27
monthly payments of 2.5% * (6300/360) * $10,878 => $4759, or
$128,500 in 2016 dollars. The question at hand is if this asset is
earned from active work only after the divorce, should a spouse receive
up to half of the value (the max percentage set by USFSPA Federal
law) when it is actively earned after the divorce? A Depart of Defense Congressional report suggest an answer in a way consistent with every state law:
ex-spouse a portion of
post-marriage benefit] of military retired pay is
inconsistent with the treatment of other marital assets in divorce
proceedings—only those assets that exist at the time of divorce or
separation are subject to division. Assets that are [actively] earned
divorce are the sole property of the party who earned them."
The default position of DFAS is to divide any and all retirement
checks. A division order must specifically address a Reserve
early retirement and tell them to not divide the early checks or divide
Without guidance, DFAS assumes early payments
are to be divided the same as payments after age 60.
Typical of confusion in this area, DFAS interprets the "pay at the same time" clause in
many division orders as a mandate to divide early
retirement. The problem is that this clause came from a 2004 Mark
Sullivan template which Mr. Sullivan himself describes in the source for a different
purpose (direct DFAS to pay according to the 10-year rule). DFAS'
interpretation is incorrect because it conflicts with the stated intent
of the author and ignores the fact that the clause existed in the
template nearly 4 years before the early retirement law existed.
My points is this: any lack of clarity on the part of division order
will create inequity against Reserve retirees who did duty both before
and after the date
of the new law.
A 2009 State of Michigan Appellate court also ruled that retention bonuses earned after the divorce belong only to earner of the bonuses. The court
(12/29/2009 Skelly v. Skelly, No 287127) overturned a lower court
ruling and clarified that retention bonuses earned or accrued after the
marriage are not divisible property. Reserve retirement payments
before age 60 are precisely a retention bonus earned only after
The 1988 Michigan Appellate Kilbridge decision agrees and intentionally levies their opinion on lower courts cases:
offer the following guidelines for the trial court in determining the
present value of the pension in accordance with the statute. To begin,
we believe that an equitable distribution under the pension statute
requires that the method employed reflect the fact that the value of
the pension for distribution purposes in a divorce proceeding is only
that value which accrued during the course of the marriage. Any accrual
of value before or after the marriage may not be considered.
Furthermore, the decisions of the parties following the judgment of
divorce must not affect the value of the distribution of a portion of
the pension to the nonemployee spouse."
The new Federal law 10
USC 12371(f)(2)(A) has big implications on how the military retirement
division order should be written if military duty occurs after 28 January 2008, and any portion of the marriage was before that date. In almost all jurisdictions, early retirement will be an issue of first
impression. The rest of this document presents arguments for or
arguments againt dividing the early retirement asset.
Regardless of when a military Reserve member enters retired status, 10
USC 12371(f)(1) authorizes retirement payments
only at and after military member age
60. However, as of January 2008, 10
USC 12731(f)(2)(A) authorizes a Reservist to receive additional payments before age 60
duty days after January 28th, 2008. An Air Force
explains this new
law which creates a new, separate, and
distinct, marital asset. The new asset is additive to the estate
of the marriage, and does not comingled or impact in any way the normal
retirement assets which are permitted for division since USFSPA became
With the prior traditional Retirement military retirement, there is
of effect of marriage duty years such that years are treated equally
division based on a count of how many military years were also married
years—this is the “coverture fraction” allowed by the USFSPA.
Comingled means that a date of duty (before or after divorce) could be
swapped with any other period of the marriage and military career and
retirement value does not change. This is not true
when moving a duty date across the 28 January 2008 boundary, and therefore
demonstrates that the two retirements are not combinable or
It’s important to note 10
clearly and quantifiably
defines the receipt of retirement pay before age 60 dependent if and
only if military duty was done January 28th, 2008 and after. Because of
date in the sand, there is no
commingling, and USFSPA does not authorize "reaching across" this date and combining retirements. Division of the
benefit requires handling as
a separate asset. Points earned before January 28, 2008 create
coverture fractions for payments after age 60. Points earned after
Janaury 28, 2008 create coverture fractions for before age 60
payments. If a marriage ends before January 28th,
no division should occur for payments before age 60.
In summary, Reserve retirement consists of two separate and distinct, and not
comingled retirements, which may require two coverture fractions if one of them is not zero.
- Retirement earned after 1/28/08 --> retirement payments before
- Retirement earned before 1/28/08 ---> retirement payments after
Argument For and Against
The rest of this document discusses why early retirement earned after a marriage should not be divided. If you want to know how to actually do it, please refer to another web page on Dual Coverture or Area Method
or the DFAS Hypothetical Method.
For divorces after 2016, the NDAA 2017 law requires a national standard
to the Dual Coverture method I promoted for seven years prior and DFAS
has chosen to implement that law by mandating only the Hypothetical
Method be used.
For before-age-60 retirement checks, one could argue in a talmudic way that the military member is re-using
shared marital points to calculate the
before-age-60 benefit, or that additional benefit is
"based on" the
marital portion of the benefit, and therefore the ex-spouse should “get
of the benefit. This argument lacks viability in the face
a division order that awards division of military retirement benefit
"accrued during the marriage" or "earned during the marriage".
To be precise, value is divided, not points. When the points are
emptied of marital value and divided, if a military member then adds
additional and different value into those points, that additional value
is not a marital asset. Think of it this way: the points are like
a bucket filled with value. When the bucket is emptied at the time of divorce, the
division is over and complete. If someone adds additional value,
it is theirs alone.
The situation is analagous to dividing a 401(k)
account, and then having one person contribute more to the 401(k)
post-divorce. The value of the 401(k) is divided at time of divorce, and the financial account continues. If a person puts more money into he account (aka into the bucket) after divorce, the additional value
is not converted to a marital asset by simply existing in the same
account number. Similarly, if a person does more work and creates more
value into military points after divorce, the additional value does not
suddently become a marital asset by simply existing in the same point
buckets. The additional contributions are not divisible. In a
pragmatic sense, it is trivial to property divide the value - checks
after age 60 and checks before age 60.
you want to (incorrectly) accept the argument of "based on", then the
same argument could be used against the ex-spouse: a 50:50
division of duty is unfair when it's "based on" solo military
time before the marriage. (See where the white portion overlays
the dotted portion in the Area Method diagrams introduced elsewhere.)
The second argument has been an anathama in the courts, so the first argument should be declined,
The legally undefined and vague concept of "based on" logic is often
introduced after the divorce decree to invade the additional retirement
value while creating a division order. However, in addition to
the taboo argument above, this
logic is faulty because it would lead
to absurd and
inequitable ramifications if applied to each spouse equally (see
numbered points below). State laws and divorce decrees explicity
say ex-spouse payments are to be calculated from benefit accrued during the marriage, not vaguely "based on"
events during the marriage. Post hoc ergo propter hoc arguments are false.
A correct litmus test regarding
the division of retirement asset should ensure ex-spouse value does not go up or down based on anything either party does after the divorce, and this includes earlier payments. Remember a military retirement is asset division, not income
division. A marital (shared) asset divided at divorce must be
caclulated so it does not
go up in value because one party does more work after divorce.
marital asset should increase in dollar amount while parties wait for
payment because of passive time-value-of-money (COLA or pay-chart
increases). However, actively
earned increase in value after divorce belongs only to the person who
earned it. If this is not true with your proposal to do the
division, your proposal is inequitable. If you want to be
equitable but cannot figure out how to do the math, please conctact me
and I will help.
Parlaying duty credit, that at the time of divorce is shared, into higher value via additional duty is a legitimate military member solo effort,
and does not invoke
divisibility of the
higher value enhancement. Duty credit or duty points are worth nothing; it is the use of the points that creates value and Early Retirement creates such a new use.
Here are multiple reasons why the separate and non-comingled asset
value in the form of early retirement payments must not automatically be lumped in with the traditional retirement:
- Allowing benefits earned and accrued after the marriage to be
classified as a marital asset
because because the idea is a) not applied with symmetry to both
spouses, and b) never allows lives to separate, dishonoring the very
- Analogy 1: Imagine a pilot military member, after the divorce, gets
job for a commercial airline. This job is quantitatively and
qualitatively based on and because of pilot experience in
the military during the marriage. Nonetheless, because the
benefit was earned and accrued after the marriage, no commercial
airline benefit is divisible as a marriage asset. Although earnings go up for the military member, no division occurs.
- Analogy 2: When someone marries a military person, they
contribute to a military retirement that is "based on" prior solo work
by the military member. However, courts never allow that to
decrease the marital asset. Therefore, solo work after the
divorce "based on" marriage years should not be used to increase the
marital asset. If past solo work effort before the marriage
isn't enough to reduce the marital asset, then past dual work work
before the divorce isn't enough to increase the marital asset.
- Analogy 3: Imagine that during the marriage, firewood was
available on property the couple owned. After divorce and assets are
divided, the person with the property builds a house including a wood
stove to save fuel oil costs. Because the use and utility of the wood is created after the marriage, totally dependent on after-marriage investment, it
would not be appropriate to make that person send half the heating
savings to the other.
- Analogy 4: Imagine the ex-spouse who, after the marriage, writes a best-seller book
titled "My Life as a Military Spouse," based on marriage to the
military member. Even though this book is based on and can only exist
because of the marital years, because it was done after the marriage,
book profits are not divisible.
value of retirement points (payments before
age 60) earned by the military member after the marriage in no way
decreases the prior value to the ex-spouse and therefore
should not be encumbered. 5
8332(c)(4) is an example of how ex-spouse interests are already
Federal Law: if the post age 60 retirement value were decreased (it is not), then the ex-spouse
may invade the additional or dual-use value. However, Federal law limits how much the additional value can be invaded to the extent required to
make their original value whole.
In the case of before-age-60 benefit, the value retained
by the ex-spouse is NOT decreased, so invasion of the new benefit is
limited to zero. Even if invasion of pre-age 60 payments were
appropriate, Federal law
requires that it should be
restored to only the original value, which means potentionally
additional value is NOT
to be divided. This statute
demonstrates the Federal intent that
point value actively earned after the marriage belongs
entirely to the military member doing the work except in the case where
ex-spouse payments, and then it is to be shared only to the extent that
restores original value. Reserve Early retirement never affects
the original, and is therefore not to be invaded or encumbered.
The ex-spouse contributes no partnership to the early payments,
and therefore should expect nothing from
the early payments. Because
the ex-spouse contributes nothing after the marriage, that is how they
should expect their payment to change: the ex-spouse value should be
blind to any increases the ex-spouse is not part of.
is one exception, where both parties are trapped by Federal law.
Although the retirement asset would be ideally
divided at the time of divorce (like a 401(k) or IRA), the Federal
government forces both parties to wait for disbursement until after the
military member retires. Because both parties have to wait for
distribution of the asset until some future time after the divorce,
they are both compensated for the "time-value of money" or "cost of
living adjustments" via passive annual increases of the military pay
chart, to which retirement payments are indexed. Note that passive
increases may be divisible, but earned active increases such as early retirement payments are not. The Area Method
of division is the simplest and most lucid way to do this.
Once the early retirement benefit is earned or authorized, and adjudicated to not be a marital asset, exactly
how it is calculated is a private benefit or entitlement matter between
the military member and employer. The method of calculation never authorizes invasion of an asset, only how the asset is earned matters. Additional value or
dual-use value of each duty day is added solely by the work of
one person after the marriage. Therefore, the added benefit
with the added value belongs to only that person contributing to that
value. By way of anology, some military members receive a
retention bonus after the marriage by signing a contract after the marriage to stay
in the military for an additional number of years. In these cases, the ex-spouse would
gain no portion of that bonus, even though the military member was
positioned for eligibility because of longevity including military
years done during
the marriage. The
new retirement is a
financial retention motivation tool, obtained via a performance
contract after the
marriage that does not include the ex-spouse.
The enhanced value of the aggregate retirement
asset is created by earning more pay dates, not changing how much is
paid on each pay date. Prior USFSPA law and case precedence
is about determining how much is paid to whom on each date.
Federal statute, the enhanced
value given by 10
USC 12731(f)(2)(A) is quantifiable separate and distinct
benefit. The ex-spouse contributed
nothing toward the extra days, which create additional
pay dates, not
additional pay amount.
Retirement payments before
military member age 60 are not marital
assets, so dividing them under UFSPA is inappropriate. In the case of a marriage that ended before January 28,
2008, a court order should simply state that payments before
military member age 60 are not to be divided. When
marriage and military duty span January 28, 2008, the court order
should state two percentages or fractions. One is
applicable for payments before age 60 and one is applicable for
payments after age 60. Alternately, because of DFAS bureacratic limitations,
division orders could choose to not address the issue with DFAS, but rather direct "overpayments" to one person or the other
be returned to the rightful owner. In a similar way, the court
order may simply state payments before age 60 be returned to the
a chronologically opposite case where the military person worked solo military for years
before marriage. Courts do not recognize that ex-spouse
portion is "based on" or
"because of" prior solo military duty and therefore they should get
than half of the marital years. If
solo military duty before marriage does not
reach into the future to reduce the division of marriage years because of a "based on" relationship, then marriage
years should not
reach into the future and increase the division of post-marriage years because of a "based on" relationship.
The problem is
that using vague "based on" arguments is kind of like
saying a person's 50th year of life is based on the fact that they
completed the 40th year of life. This logic is not allowed in the
court because then the entire rest of a person's life would be
marriage asset. There is no place for intentionally vague
and legally undefined "based on" or "because of" language in court
The number of days retirement is received early (before member age 60) is proportional
to the amount duty days after the law. For example, twice as many
days after the law earns twice as many days of retirements before age
60. The early retirement value is
proportional to the number of duty days of shared effort before 1/28/2008, mathematically showing that they are decoupled and separate.
because both assets here are called "retirement", that is not a reason
to divide both! The extra retirement pay dates require no
prior rank, seniority, or duty before the demarkation date. It is a
separate program. It is quantifiable separable and
independent, authorized by separate dates of duty, authorized by a new
paragraph in the Federal statute. Simply because
the separate benefit is also colloquially called “military retirement”,
courts may confuse the issue. However, if courts do not take
the time to understand and separately allocate this
retirement benefit, their error would be as egreggious as if they
“IRAs” or all
“401(k)s” or all “pensions” together just
because they have the same
It is unconsciousable and exhibits judicial malpractice to say that a
401(k) or IRA started after the marriage should be divided simply
because it's called the same name!
Summary of Differences
Reserve Early Retirement pay is different than other military retired
pay discussed in the context of USFSPA. The table below
Normal Military Retirement (USFSPA)
Military Early Retirement
before age 60
|Some retirement pay is a marrital asset and may be divided because part of may be earned/accrued during marriage.||Retirement pay is not a marital asset when it is earned/accrued after marriage.|
|Traditional Reserve retirement pay
occurs when two conditions are met: age 60, 10 USC 12731(f)(1); and “20
good years” defined by 12732(a)(2), 12731(a)(2).
Active duty retirement is after 20 years, USC 8911.
military command issues orders under 10 USC 12731(f)(2)(a), which
does not wait for age 60 - resultant pay is in addition to, and does not affect or comingle with any other military retirement.
|Asset value is accrued (retirement is earned) proportional to active duty dates across entire career.
|Value is accrued (retirement is
earned) counting active duty dates only after January 28, 2008. Days
of payment correlate exactly 1-to-1 with days of duty after January 28,
2008. If marriage did not continue past this date, none of the value
was earned during the marriage.
an active duty retirement, 20 years (7300 days) of military duty are
approved en-masse for
retirement credit. For a Reserve retirement, 20 "good years" of
duty status are approved en-masse for retirement credit. In
either case, this generates a “20 year letter” from the military
||Each and every date (not just days) must be submitted through MyPers
and reviewed, authorized, and approved by the Early Retirements branch
of the military reserves command. Each 90-day block of dates of duty
earns 3 more months of retirement pay. Separate date authorization
means there is no comingling of during and after marriage.
|The last duty date of one’s
20 year career enables the entire retirement. The
last date is functionally identical to all other dates because it is
the total of 20 years that turns on any and all of the retirement.
Note the U.S. Supreme Court (McCarty v. McCarty) ordered that military
retirements were not divisible because they don’t exist until this last
day of duty is earned, and hence were not earned during the marriage.
However, it was impossible to distinguish which duty date created the
total of 20 years; they were all the same. This confused “comingling”
of dates is why legislatures created the USFSPA to change the law of
|The last duty date does not
comingle with dates before Jan 28, 2008. The value of retirement is
not turned on by a sum of duty dates, rather the last duty block of
dates adds just one more block of payment. It is impossible to
construe that dates after the marriage were earned during the
|Paycheck for each month is the
same dollar amount as Early Retirement. However, the retirement asset
value is proportional to months of payment after age 60.
|Paycheck for each month is the
same as 20-year Reserve retirement. However, the retirement asset value is
proportional to months of payment before age 60.
|Expectation value of asset
exists since the first day of military duty. Military duty and
marriages start with knowledge and expectation of a possible future
|No expectation value exists
before January 28, 2008. Benefit never existed before this
date. Marriages and military careers start before this date with
no future expectation.
Rebuttal Questions and Answers
Q1: Aren't before age 60 payments based on points earned while married and therefore divisible?
A1: No. How a benefit is calculated is different than how the benefit
is accrued. There is no co-mingling of duty dates for the distinctly
separate early retirement payments. The before age-60 payments are a
distinct and separate different retirement contract between the Federal
government and military member. Early payments are enacted by
after USFSPA and certain cases, after the marraige. Early retirement is
a distinctly different marital asset and must be divided some, all, or
none, depending on marital and military activities after January 2008.
Q2: Aren't the age 60 payments made higher based on commingled points?
A2: No. Payments are not "based on
" points. Payments are calculated from
joint points, solo points, Federal COLA numbers,
military pay tables, etc. Points do not have value to divide, and
are not owned by
anybody. Lawful division is based on when value of is
earned, not what point is calculated
with. The before age 60 payments are calculated using duty
details after January 2008. No matter how many total marriage points
are earned, the before age 60 payments are zero unless marriage duty is
done after January 2008. The ex-spouse is already compensated for full
during marriage because commingled points earn the spouse a higher
percentage of monthly payments from the traditional age 60
retirement. Additional value earned after divorce does not affect
the traditional retirement in any way.
Consider a Bucket Analogy: a point is like
a bucket that can hold something of value. Division of the normal
retirement divides and empties the bucket of all marital asset
value. Later in life, if one person puts value back into the
bucket, that is new and different value that does not comingle.
It's like dividing all the value of a 401(k) and then putting more
money into the 401(k) after divorce - the new contributions are not
marital asset just because the same bank account was opened during marriage.
Q3: But if the divided points were absent in the calculation, wouldn't the before age 60 payments be less?
A3: If commingled marriage points were absent, then ALL payments
and after age 60, and for both parties) would be less. Remember,
points are not defined as marital or not. They do not have value,
per se. Rather it's the value ~in~ the points that can be
accrued, divided, and replentished. Ex-spouse
payments are intended to divide asset value earned during marriage, and
the division formula preserves contant-year value of
payments, which do
not go up or down in value based on whether or not there are before age
60 payments. Points are not owned. The opportunity to USE those points
is earned. Using points for age 60 benefit is one thing. Using points
for payment prior to age 60 is a separate and distinct thing that does
not comingle. See bucket analogy in Answer 2
Q4: Aren't the payments paid before age 60 based on the same points
that were partially earned by the ex-spouse? In fact, the payments are
exactly the same dollar amount ~because~ they're based on the same
points. If those same *shared* points cause the dollars to be divided
after age 60, shouldn't they also cause the dollars to be divided
before age 60?
A4: If the asset being divided was points, the logic in the question works.
However, the asset is not points
The marital asset of concern is value "deposited into" each point like
a 401k retirement account: the bank account itself doesn't have value;
rather the results of work effort deposits new value into the account.
Making the distinction between points
and value in those points
is important. The military member should be free and clear to use
are left with after the divorce in order to improve life for themselves
after the divorce. In this case, what they are left with is
points, stripped of nominally half their value. The marital asset
of the points) was already divided with post-age-60 payments. The
points themselves, stripped of nominally half their value, should not
be encumbered if the military member avails themself of a post-divorce
new-law contract with the government that adds new value to the points
that does not comingle, nor increase, nor decrease the previously
stripped value. Like
a checking account that was jointly opened during a marriage, once the
value is divided at divorce, money later earned and deposited into the
account is not a marital asset and is of no concern to a divorce court
. See the Bucket Analogy
Division orders do not assign single-use privileges to point counts, which are artifacts used to
calculate retirement value, nor do they incumber the mathematical
formula used to calculate a contracts or third party agreement created
after a divorce. The work that earned the
right to receive payment is what must be used to proportion a
division. Specifically, if all points are used to calculate a
second benefit that was earned after divorce, congratulations to the
person who negotiated or earned the addition benefit; it is theirs
alone and the additional resultant asset is not a marital asset.
Q5: But won’t the military member’s income be higher because of shared work by the ex-spouse?
A5: No. Duty points earned during
the marriage have no
value. The shared work of the spouse causes division of the
retirement value. The right to use the
points in a new way was earned 100% after the divorce. The
additional paychecks happen if and only if the military member does
work after January 28, 2008. There is nothing either
party does after the divorce that should make the marital asset go up
or down in constant year dollars
; this is the Michigan appellate court Kilbride
Q6: Right, but if those points were not present, then the benefit would be lower for the military member, wouldn’t it?
A6: If points were not present, then
benefits would be lower for both parties. It’s problematic to
hypothesize about non-historical non-truth. Instead, we’re asking
the court to make a distinction about what DID happen - between how a
benefit is calculated vs. how it was earned or accrued - between
marital asset value in the "point bucket" vs. non-marital value put
into the same bucket after divorce. As a
precedence, consider that the Skelly Appellate court clarified that
even after a benefit is paid and in the bank during a marriage, it is
not a divisible marital asset if the right to keep
was accrued after the divorce. We are asking the court to honor
the intent of divorce law by dividing what was accrued during the
marriage. Tallies of points and rank cannot be enjoyed as a
retirement benefit by anybody because they have no value. The USE of
points and rank creates retirement benefit. The right to USE was
100% accrued after the divorce.
In fact, the argument to not divide is true for any military retirement
where additional solo work effort after the divorce is necessary to
create the asset. MI 2009 Appellate Court Skelly v. Skelly makes
the Michigan Kibride "litmus test
" opinion even more clear by directing that after-divorce work required to
an asset (let alone create
it) is enough to cause
What's the difference between normal retirement pay (which is comingled and USFSPA allows division of) and before-age-60
retirement pay? The difference is huge. A military retirement is known
as a possibility and expectation - indeed a recruitment tool - from
before the first day of duty. If a marriage is started under these
conditions, it is reasonable to argue either way. However,
if a marriage is both started and ended without any possibility or
existence of payment before age 60, then that lack of expectation
indicates that any payment before age 60 that became possible with a
new law after the divorce is not a marital asset.
The accrual of financial value from the points after age 60 was set in
both law and expectation during the marriage, so it becomes divisible.
The law creating the accrual of financial value before age 60 from the
points did not exist before the divorce and has zero expectation value.
Additionally, we are not considering passive enhancement-like earnings
on an investment account that would be divisible. The new Federal law
demands active performance after January 28th, 2008. There
is no way to conjure a marital asset from what didn't exist during the
marriage, wasn't expected during the marriage, and has to be worked for
after the marriage.
If you want a more detailed explanation with examples, see the
Section titled "Proximate of
Events cause Division - a More Intellectual Explanation." If you want
to know how to pro-rate division for a marriage that spans the magic
date of January 28th, 2008, let me know. Basically payments before and
after age 60 are treated as two separate assets to divide.
The phrase "based on" and "but for" cause great confusion when used with military retirements because they are legally
"Based on", "but for", and "provided a basis for" concepts are
specifically critiqued in the Sullivan rebuttal
available in the references section below.
It's important to distinguish two issues. One is a potential
debate about how a marital asset is divided. The more important
issue is whether something is a marital asset in the first place.
If an enhanced promotion benefit was "actively earned" or "accrued" without
spousal contribution after the divorce, it is not a marital asset no
matter what it is "based on" or how it is calculated.
vague phrase "based on" usually means the more precise
phrase "calculated from" or "calculated using" -- both of which are
more useful because they have defined meaning. Intentionally
being vague is a goal only of someone trying to be inequitable.
"Calculated from" is insufficient to justify division. In fact,
the claim "military member's post-divorce benefit is calculated from
the ex-spouse's divisible points and therefore should be divided," is a
point of perspective. If true, it is equally true that "the
ex-spouse's benefit is calculated from the military member's
non-divisible points and therefore should not be divided."
The reciprocity of
calculation is done because that's how a military retirement is defined
in Federal law, but method of calculation does not assign ownership,
only participation in accruing the benefit does.
one of the spouses after the divorce writes a book "based on" their
married military life together, the earnings from those books sales are
not a marital asset because there was no value until the after-divorce
solo effort – even though it was based on the marriage.
Or consider if a military pilot, after divorce, gets a civilian pilot
job "based on" training obtained during married time in the
military. The civilian retirement is not a marital asset.
The phrase "based on" iobscures good judgment, and use of this word in military retirement divorce proceedings really
means one of only two things:
1) "Based on" could mean "Accrued during". Example: "The
payment increased based on additional duty done during the
In this case UFSPA law directs that retirement can be divided because
there is a comingling of dates (switching dates does not affect the
calculation). Duty dates causing early retirement duty are
demonstrably NOT comingled with the normal retirement duty dates
because switching dates across the 1/28/2008 boundary does change
retirement value, which contradicts the definition of comingled.
2) "Based on" could mean, "Derived from" or "Calculated from".
Example, "Ex-spouse wrote a book based on being married to the other
person." Book earnings are not divided even though it taps into and
uses time of marriage. Example, "DFAS Hypothetical division method is
based on Cost Of Living Adjustments (COLA)." Nothing about COLA is
shared or divided just because it's in the calculation.
These two meanings create HUGE differences when dividing military
benefit. It's to the military member's benefit to be clear. It's to
the ex-spouse's benefit to be vague because without distinction, more
of #2 situations can be drawn into #1. In either case, to
~intentionally~ be vague dishonors our legal system.
Even USFSPA, which created the ability to divide military retirments,
declined the "based on" argument. McCarty v. McCarty was the US
Supreme Court pivotal case out of the 1980s that prevented division of
military retirements in part because the benefit was "based on" the
military member doing more solo work after marriage.
However, USFSPA declared that "based on" was an insufficient legal
threshold and not a unitary disqualifier. Retirement that had been
partially "earned or accrued" during the marriage was therefore
partially a marital asset.
If "based on" future work effort isn't enough to prevent division, then "based on" past work effort is not enough to cause division.
Calling Reserve early retirement or promotion enhancements a marital
asset because it's "based on" prior life events is an insufficient
legal threshold. It is an attempt to commingle an asset not earned or
accrued during the marriage for the sole purpose of grabbing it for
division. Instead, after-divorce work is NOT comingled; it is easily
separate by legal statute, mathematics, and practicality.
Proximate of Events cause Division - a More Intellectual Explanation
The January 2008 early retirement law allows Reserve military
to increase value of retirement by earning earlier additional payments,
not more payment each month. The extra value is in how MANY
are made, not how MUCH each payment is.
Another way of thinking about this issue is to consider the proximate
cause of early retirement value increase. When the points were
earned during a
marriage, both parties participated. Latent value doesn't
exist and has no value until the military member finishes
a career without the marriage partnership and actually applies for
retirement. The Supreme Court ruled that latent military
cannot be divided. However, in the specific and narrow case of
military members with comingled duty dates, UFSPA legislation undid the
Supreme Court ruling by allowing that courts may (not must) divide
if it is
specifically a military retirement. However, at least in
Michigan, civilian latent benefits
remain non-divisible per the 2009 Skelly v. Skelly Appellate course
mentioned above, which dealt with a latent civilian retention bonus
that was ordered not divisible.
So how can Skelly be consistent with UFSPA? The time sequence of
events causing divisibility of military latent benefits in the eyes of
First, laws since the early 20th century define how much monthly retirement payment is made
Then, retirement points are accrued during a marriage, followed by divorce
Then, latent retirement payments are vested or converted into earned retirement
Because the marriage accrual of value in the 2nd step is proximate to
the developed retirement in the 3rd step, developed value becomes
However, with early retirement payments, the
proximate relationship is divided and separated by a new law:
First, retirement points are accrued during a marriage, followed by divorce
Then, new laws in Jan 2008 create additional payments but do not change the amount of payments
Then, additional military retirement points are earned that make the
payment per month go up, plus additional duty points (alone) create
additional payment months.
The marriage accrual of value is
NOT proximate to the developed retirement - rather the new law in the
2nd step is proximate to the developed value in the 3rd step - so
developed value is not divisible. Latency did not exist during the marriage. so USFSPA's attempt to correct division of a latent benefit does not apply. The Supreme Court ruling stands.
In the first case, the law and the earning of credit span *across* the
marriage. In the second case, the marriage was terminated and THEN a
new law was created and a benefit was earned under the new law. The
marriage is NOT proximate to earning the benefit and therefore the
benefit is not divisible. It is rare that new laws reach
retroactively and change history. For example, even UFSPA laws did not attempt to
do this. In a similar way the January 2008 law should not reach retroactively into the marriage. Graphically,
When in this order: ( Law - Marriage - Accrual ) ---> Division
When in this order: Marriage - ( Law - Accrual )---> No Division
If there is any doubt to this conclusion, consider contract law as
analogy. If the marriage is inserted into the "retirement
contract" between the Federal government to a military member, then the
in that contract. This is shown in parentheses above. However, the early retirement law is a new
"retirement contract" meant to motivate future duty of Reservists -
causing them to do more duty for early retirement pay. The new
contract comes into existence only after the marriage is history.
The new contract is exclusive of marriage, and does not change or damage or modify the
divisible retirement in any way, and so the ex-spouse has no
third-party interest or claim into the additional value, regardless of
how it is calculated.
In summary, although early retirement monthly amount is calculated
using the same method to yield a fraction or percentage, the
calculation process is not relevant to determine divisibility.
payments earned and accrued outside of a marriage are not
divisible because marriage is chronologically outside the scope
of the retention bonus contract.
Practical Legal Implementation
For those members who were married and did military duty before 1/28/08
and have earned or may in the future
retirement enhancement by earning points after 1/28/08, a decision must
be made as to whether payments before age 60 are a divisible asset
or an un-divisible asset. The answer to this question would
depend on the period of marriage, divided into 3 possibilities:
1. If the marriage
was entirely before 1/28/08,
the before age-60 retirement payments were earned only after the
marriage, so the enhanced benefit is not a marital asset. No
matter what formula is used to determine a division percentage, the
must specify that no division occurs until member age-60.
Caution: If the division order is silent on this issue,
all retirement payments will be incorrectly divided by DFAS, so the
order must state that payment division will begin only upon the
military member reaching age 60. An alternative to DFAS
(sometimes an inpenetrable bureacracy) is to state that
the ex-spouse return payments to the military member each month before
2. If the marriage was entirely after 1/28/08, then
the before age-60 monthly payments are divided same as after age-60
monthly payments. Correct division will occur by not mentioning
this issue at all in the order (DFAS will divide all payments the same).
3. If the marriage
monthly payments need to be divided with a different coverture fraction than done with the age-60 and after payments. The
numbers for the coverture fractions for the two retirements will be
different. If the divorce is pre-NDAA 2017, the formula
paragraphs use the Dual Coverture (time and rank/longevity) or Dual Coverture Area Method
(if multiple divorces or military duty before marriage).
Post-NDAA 2017, the definition of "disposable retired pay" is changed to include one of the coverture fractions and the
court order, per se, should use the single coverture time-based
coverture fraction, and the overall effect will be a Dual Coverture
One other "got'cha" is worth paying attention to. Military
division orders may be generated using templates written by attorney Mark
Sullivan. One of the cut-n-paste phrases is vague enough to cause
trouble. Under the 10-year rule, an ex-spouse can get payment
direct from DFAS instead of passing through the retired military
member. Cut-n-paste paragraph 3(b) in Mark's 2014 guide offers the
phrase, "Plaintiff shall receive payment at the same time as Defendant"
(inappropriately, this assumes the plaintiff is the ex-spouse).
Mr. Sullivan introduces paragraph 3, saying, "This section addresses
whether military retired pay may be paid directly by DFAS to the
non-service member spouse."
However, a 29 Mar 2016 letter from DFAS quoted this phrase and said therefore
early retirement pay would be divided as part of the marital
estate. Defining the marital estate is totally out of the bounds
of DFAS' authority! They misappropriated the
sentence to a new and unintended purpose. Their interpretation is
wrong for 2 reasons:
- When the phrase was written in the guide, early
Reserve retirement didn't even exist as a concept so it must be about
something else, and
- The author of the guide clearly states it's for
a different purpose. DFAS is known for their bureacratic quagmire and
mistakes and you don't want to get tangled in their confusion (Virginia Pilot, Stars & Stripes, Outside the Beltway, Reuters). Be clear in your division order about retirement pay before age 60.
ConclusionTo pursue equity, family
law courts must
recognize the new Reserve "early" military retirement as a separate and
distinct entity. It may or may not be a divisible marriage
asset, or may be partially marital asset if the marriage spans January
28, 2008. If this issue is not addressed in the original
division order, every Reserve military member who earns a "before age
60 benefit" (possibly long after the divorce) should ask the court
to address this issue in compliance with the original
intent of the division order. Logic, case law, 2017 NDAA Federal Law and the 2001 DoD USFSPA report to
ex-spouse a portion of
post-marriage benefit] of military retired pay is
inconsistent with the treatment of other marital assets in divorce
proceedings—only those assets that exist at the time of divorce or
separation are subject to division. Assets that are [actively] earned
divorce are the sole property of the party who earned them."
- DFAS "Guidance on Dividing Military Retired
Pay", March 2014, 25 pdf pages with bad formatting, 121 KB pdf. (DFAS.mil, increa copy).
- Older copy April 2012, 20 pgs, 119
KB pdf. (DFAS.mil,
- Older copy "Attorney
Instructions - Dividing
Military Retired Pay", April 2001,
19 pgs, 74kb pdf. (DFAS.mil,
- DoD Report to Committee on Armed Services of the US Senate and
House of Representatives, 1998, 84 pgs, 279 KB pdf. (Defense.gov,
Instructions - Division of Reserve and Active Duty Military
- Division of Blog post Dual
Coverture is better than DFAS Hypothetical Method,
- "Reservists may qualify for early retired pay," www.afrc.af.mil
news release (increa copy),
24 Feb 2009.
of Military Retirement
Promotion Enhancements Earned After Divorce, Mork, 2012 - a
rebuttal to Mark Sullivan's 2001
editorial against the Armed Services Committee report.
originally appeared on the Increa.com
shell of this expanded document was created
under the Linux
desktop. Content was edited using Kompozer.
(c) 2017 by Brian Mork.