Military Divorce Minefields – Part 2 – Division of Retired Pay

Let’s continue where I left off last week.

Ooh, here is the nasty one.  This is the topic that causes the most spiteful disagreement.  In no other area have I witnessed the level of argument and emotion as I have with the division of retired pay.

 

Adding to the confusion on both sides, though, is the fact that every state treats division of pay differently. Puerto Rico, for example, does not divide military retirement at all.  Indiana requires the service member to be eligible for retired pay (twenty qualifying years) at the time of divorce before they will consider division.  North Carolina requires expert testimony on the value of the pension.  Maine does not allow for the computation of Cost of Living Allowances (COLAs) when awarding part of retired pay to a former spouse.  Some states are “shall divide” states while others are “may divide” states.  Anything you may have heard about a one-size-fits-all formula for dividing retired pay is false.

 

The Uniformed Services Former Spouses’ Protection Act allows for this sort of division during a divorce. Except for one recent modification, it gives very few rules on how the division is to occur.  For example, it sometimes allows for up to fifty percent of retired pay (after certain deductions) to be directly deposited into the former spouse’s bank account by the member’s pay center (the Defense Finance and Accounting Service for the Army, Navy, and Air Force, for example) but says nothing about courts requiring a higher amount from the service member (meaning the member would still be liable for paying any remainder out-of-pocket).

 

Let me describe how the division of pay happens.  First, we need to figure out what is called Disposable Retired Pay (DRP).  This is gross retirement pay minus any VA disability offsets, survivor benefit premiums, taxes, and any other money owed to the government.  DRP is what the pay center will divide (regardless of what courts may say) up to fifty percent and deposit in the former spouse’s account.

 

But wait!  It’s not that simple.  DFAS (and the other pay centers) will not always make things so easy for the service member.  There is a little understood rule (often called the “10/10 rule”) which requires ten years of the marriage to overlap a minimum of ten years of the member’s military service.  Contrary to what is often cited by barracks lawyers, there is no automatic eligibility for a portion of the member’s retirement after ten years of marriage.  It is still up to the state courts to decide if division of pay will happen at all.  If it does occur and the former spouse meets the 10/10 rule then the pay center will direct deposit up to fifty percent of the member’s disposable retired pay into the former spouse’s account.  The former spouse will need to file DD Form 2293 and a court-certified copy of the court order with the pay center for this to happen.  If the 10/10 rule is not met and a division occurs, the member is responsible for paying out-of-pocket.

 

I digressed a bit with that last paragraph.  Let’s get back to how the amount of pay the former spouse will receive is computed.  We’ve gone over how to reach the disposable retired pay amount.  The amount paid can either be a flat dollar amount of a percentage of disposable retired pay.  If the flat amount is elected, it will not change over time.  This means COLAs have no effect.  They will, however, be included if the percentage method is used.  So, you’ve computed disposable retired pay. Now what?

 

What happens next is going to vary based on a number of factors.  If the member is still serving, the MPDO has to state the member’s rights under the Servicemembers Civil Relief Act have been honored.  There is also the question of the “marital fraction” part of the computation.

 

Now we’re getting into a lot of confusing territory.  What the heck is a marital fraction?  This isn’t math class.  No, it’s more like abstract algebra.  Don’t be scared.  Dive into the pool and start kicking.  Eventually your head will break water and some semblance of sense will come to you.

 

I said earlier that each state does division of retired pay differently.  Keep that in mind with everything I am about to describe.  I am only giving a basic idea of things.  Your experience may vary.

 

The basic description of the marital fraction is this: what portion of retired pay was earned during the time the service member was married to the former spouse.  Here is the basic formula.

 

Marital Asset (Former Spouse’s portion) = [DRP x (marital service time ÷ total service time) ] X Court Ordered Percentage

 

Marital service time is the overlap of the marriage with the member’s military service.  For reservists, it would be the number of retirement points earned during the marital overlap.  Here is the same formula modified for reservists.

 

Marital Asset (Former Spouse’s portion) = [DRP x (marital service retirement points ÷ total retirement points)] X Court Ordered Percentage

 

Let me add some numbers to this equation so it will make a little more sense.  Let’s assume the disposable retired pay is $2,000, the member has 5,000 retirement points and earned 3,500 of those points while married to the former spouse.  The court awarded fifty percent of the marital fraction to the former spouse. We will call the marital fraction (or marital asset) M in this equation.

 

M = [$2,000 x (3,500 ÷ 5,000)] x 50%

 

Now think back to your seventh-grade algebra class and recall the order of operations.  First, we solve what is in parentheses so we’re dividing 3,500 by five thousand.  We get this.

 

M = [$2,000 x (0.7)] x 50%

 

Now we solve what is in the brackets.  We multiply $2,000 by 0.7.  We end up with this.

 

M = [$1,400] x 50%

 

We’re almost there.  Now we multiply $1,400 by fifty percent.  The former spouse’s portion of retired pay is $700 per month or 35% of the service member’s disposable retired pay.

 

M = $700

 

$700 ÷ $2,000 = 35%

 

Did that make sense?  I hope so.  I’m about to do something evil.  States used to have a great deal of flexibility in determining what the marital fraction was.  They could even decide whether to based the division of pay on the rank and points at the time of divorce or on the rank and points at the time the member began to receive retired pay.  A change in the law, effective 23 December 2016, changed all of this.  When retired pay is divided by a divorce decree, QDRO (erroneously), or MPDO and the member is still serving, the variables composing the marital fraction are now set for all states and territories.  The change does not affect those who divorce after the member is no longer serving (meaning the member is either in the Retired Reserve or is receiving retired pay).

 

For those people to whom the law change does apply, the marital asset is now based on the retirement points earned during the marriage and the pay grade and time in service the member had attained on the date of the divorce.  This is quite different from what I described earlier.  The previous example included total years of service and highest grade held.  Under these new rules, the pay grade and years of service could be significantly different especially if the member serves several additional years and is promoted one or more times after the divorce.  The new formula would look like this.

 

M = DRP x [(MRP ÷ TRP) x (MPG x HPG)]

 

M is Marital Asset.

DRP is Disposable Retired Pay

MRP is Marriage Retirement Points (the total points earned during the marriage)

TRP is Total Retirement Points

MPG is Marriage Pay Grade (the rate of pay in effect on the date of divorce)

HPG is Highest Pay Grade (the rate of pay in effect when the member began to receive retired pay (assumes the possibility of promotions and additional years of service))

 

I’m going to borrow an example from one of the articles in the references section (http://www.increa.com/articles/division-2017NDAA-USFSPA-tutorial/NDAA-USFSPA-ContinuingEducation.pdf, if you’re interested) since it works very well.  The numbers below will not match the referenced article due to rounding.

 

We start off by calculating the total retired pay, $5,000 per month.  We know 4,700 retirement points were earned during the marriage and a total of 5,500 points were earned during the member’s career.  The retired pay based on the member’s rank, years of service, and the points earned during the marriage equates to $3,298 per month.  The court has awarded 50% of the marital fraction to the former spouse.  Here is how the formula appears with these numbers plugged into it.

 

M = ($5,000 x [(4,700 ÷ 5,500) x ($3,298 ÷ $5,000)] ) x 50%

 

When we divide 4,700 by 5,500, we get .8545 (or 85.45%).  Dividing $3,298 by $5,000 equals .6596 (or 65.96%).  The equation now looks like this.

 

M = ($5,000 x [(85.45%) x (65.96%)] ) x 50%

 

The next step is to multiply the two percentages in parentheses.  This gives us 56.36%.  Now the equation looks like this.

 

M = ($5,000 x 56.36% ) x 50%

 

It’s getting simpler now.  Multiply the total monthly retirement by 56.36%.  We get $2,818.14.  This is the marital fraction of the member’s retired pay.

 

M = $2,818.14 x 50%

 

The former spouse receives fifty percent of the marital fraction.  That amount is below.

 

M = $1,409

 

This is a considerable difference over the formula I showed earlier.  If we used the previous equation, the amount of pay the former spouse would have received would have been $2,136 per month.  One argument in favor of the new rule is the promotion(s) and additional years of service did not happen during the time of the marriage and therefore should not be included when dividing retired pay.  An argument against the new rule, sometimes called the “marital foundation theory,” states that the final pay grade and years of service was built on the joint efforts of the service member and former spouse during the marriage.  You can find articles supporting both of these standpoints in the references section below.

 

That’s it for now.  Next week I will cover medical and on-post benefits.

Thanks for joining me today and, of course, thank you for your service.

D.J.


References
: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov


Podcast Episode 0053 – Military Divorce Minefields – Part 2 – Division of Retired Pay

 

References: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov


YouTube Episode 0056 – Military Divorce Minefields – Part 2 – Division of Retired Pay

References: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov

 


Military Divorce Minefields – Part 1 – Military vs Civilian Plans

I know writing this week’s article is going to be difficult.  I might even regret doing it.  Who knows?  It’s a touchy subject and I know full well that no matter what I do I will make someone mad at me (or, at least, at what I say).  I’m going to write it anyway.  The information needs to be put out there.  Deep breath.  “Damn the torpedoes.  Full speed ahead.”

 

Let’s talk about divorces in the military.  How do they affect service members, former spouses, their families, their money, and their benefits?  I am going to leave the more personal bits out of the discussion and talk mainly about pay, benefits, and survivorship.

 

We are going to get into some legal territory here. Let me say up front that I am not a lawyer or even a paralegal.  I do have a great deal of experience in this area from a retirement services perspective, though, and I will give examples of items with which I have dealt.  Let’s call this an “experienced layman’s point-of-view” supplemented by a great deal of research.  You can find several of the sites I visited in the references section below.

 

I certainly cannot go into all the different circumstances which could arise during a military divorce.  I will hit some of the most important highlights and describe them as best I can.  If I do get anything blatantly wrong, I welcome constructive criticism and correction.

 

Differences Between Military and Civilian Retirement Plans

 

First, let’s define what military retirement is not.  For civilian lawyers who are not regularly involved with military divorces, this is easily the most difficult to comprehend.  Civilian retirement plans are managed under a law called the Employee Retirement Income Security Act (or ERISA, for short).  ERISA defines the participation rules, funding, and vesting requirements for most pension plans in private industry.  Civilian lawyers are often very comfortable with how ERISA functions.  The problem here is military retirement does not operate in any way like an ERISA plan.

 

Just how different can civilian and military pension be, you may ask?  Well, here are several questions I was asked about a National Guardsman’s pension from a family law lawyer familiar with ERISA.

  1. What is the current balance of the member’s pension fund?
  2. What is the member’s contribution to the fund?
  3. What is the buy-out (or “lump-sum”) value of the fund?
  4. What portion of the fund was acquired during the marital period and what portion was vested on the date of divorce?
  5. Who is the asset manager of the pension fund?

 

See what I mean?  Even someone with a rudimentary understanding of military retirements can see that none of these questions can be answered satisfactorily.  The differences are just too great.  For example, while there is such a thing as the Military Retirement Fund on a macro level, there is no personal account for each service member.  There is no buy-out or lump-sum option (at least before the Blended Retirement System came to be and even then it would be difficult to calculate while the member is still serving).

 

The military pension, simply put, is a defined-benefit plan.  This means the member receives a certain standard amount or percentage of pay for each year of service.  Vesting, the point at which the benefit is definitely yours and cannot (usually) be taken away, is twenty years of qualifying service.  The same cliff vesting requirement holds true for most of the other benefits involved in military retirement, such as Tricare coverage and use of on-post facilities.

 

This all-or-nothing approach to pension eligibility is called “cliff vesting” and can be difficult for civilian attorneys to understand at first.  They are much more comfortable with the three to five-year vesting requirements of ERISA plans. Now throw in the unique nature of being a reserve retiree and you can practically see that lawyer’s head explode.  I recommend wrapping their heads in duct tape before telling them you’re a reservist so – when their heads do explode – you’ll at least have all the pieces in one place.

 

Now let’s take a quick look at how a division of pay and benefits would be accomplished.  Unless the terms of division are laid out in the divorce decree itself, division of assets usually occurs by way of a document called a Qualified Domestic Relations Order (or QDRO – often pronounced Quah-Dro, for short).  A QDRO works for most divisible assets but isn’t necessarily best for military pensions.  Since military retirements are not “qualified plans” like IRAs and 401(k)s, but are statutory programs (meaning created and managed exclusively by federal law), it is best to use a Military Pension Division Order (MPDO).  I will include sample language for an MPDO in the references section of this article.

 

Here is an interesting sidebar I have seen repeatedly over the years.  On several occasions, I have read divorce decrees which ordered the service member to keep Servicemembers Group Life Insurance (SGLI) policies on themselves with the ex-spouse as the beneficiary.  The decree even mandated the member to keep this policy after leaving service.  There is some good news for the member, though.  A Supreme Court decision from 1981 (Ridgway v. Ridgway, 454 U.S. 46 (1981)) declared courts cannot enforce orders requiring SGLI coverage.

That’s all for this week.  Next week I will cover a touchy subject, the division of retired pay in a divorce.  Join me for that.

Thanks for joining me today and, of course, thank you for your service.

D.J.


References
: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov


Podcast Episode 0052 – Military Divorce Minefields – Part 1 – Military vs Civilian Plans

 

References: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov


YouTube Episode 0055 – Military Divorce Minefields – Part 1 – Military vs Civilian Plans

 

References: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov


I’m Medically Unfit for Retention. Now What?

So, you’re finally to the point that you can’t hide your medical problems from your unit anymore (yes, people actually do this, sad to say).  A fit for duty board has reviewed your issues and has determined that you’re unfit for continued service in the military.  “Great,” you say. “I don’t have twenty years yet.  I’ve just lost all of the retirement benefits I’ve been trying to earn.”

Am I right?  Is this what’s going through your mind?  Well, there is still hope.  Do you have at least fifteen years of qualifying service yet?  If the answer is yes then you haven’t lost anything.  Here’s how things actually work.

As I’ve already implied, there is a vesting point (a point at which you have earned something through your service which cannot be taken away) before you reach the twenty-year mark.  If you have at least fifteen “good years” by the time you are found to be unfit for continued service and awaiting discharge, you can receive an early notice of eligibility for retired pay (in the National Guard, we call this a “fifteen-year letter”) and still receive retirement benefits at age sixty (or earlier if you have qualifying active duty time).

This fact has come as quite a surprise to a great many reservists who thought they had lost everything.  For example, just two weeks ago, I was giving a class to a group of Army Reserve soldiers and mentioned this little tidbit of information.  I noticed a great deal of increased electricity in the room and took a moment to scan the audience.  I then asked if this applied to anyone in the room (of course, I said they didn’t have to acknowledge me if it did).  No one made it plainly obvious by raising their hands, but I saw several heads nodding.  That was enough, though, to get several of them to ask additional questions which is exactly what I wanted.

One of them asked, “Why is it called a fifteen-year letter?  I have seventeen years of service.”  The answer, simply put, is it’s just a term we use based on the fact the service member has at least fifteen qualifying years, the minimum needed to get this notice of eligibility published early.

“How is pay calculated if you get one of these letters?” another inquired.  “Is pay prorated as if you did complete twenty years?”  No, I replied, it is not prorated but it is based on the total number of retirement points you have earned at the time you are discharged.  Other than the obviously lower number of points used to calculate pay, though, most of the other retirement benefits are exactly the same as if you had completed twenty years.  The only exception would be for concurrent disability and retirement pay (or CRDP, I’ll cover that in a later article in this series on medical retirements) for which the member would not qualify.

“Do the medical problems have to be in the line of duty?” asked someone else.  No, they do not.  You could get injured in while coming back from the grocery store or working around the house.  As long as the medical problem is not due to negligence or misconduct (such as drunk driving), it does not matter what caused it.  The primary factors are medical disqualification and fifteen years of qualifying service (remember you need fifty points per year for that time to count for retirement purposes).

After a few other questions which I don’t recall, it was obvious this fact came as quite a relief to these selected soldiers.  I asked how many of them were concerned about losing their retirements.  At this point, several people in the room raised their hands … even some who had not nodded their heads earlier.  Since such a worry is common in the National Guard, I was not surprised to see it was present in the USAR, as well.

So, what does all of this mean to you if you’re having medical issues.  It means, dear reader, if you have at least fifteen good years and want to travel this path then stop trying to push through the pain and present your medical problems to your unit.  They will send your medical documents through channels and, at some point, your records will be reviewed by a fit for duty board (you may be asked to go to your primary physician or a military doctor during this review).

If the board determines you no longer meet the medical retention standards then you will be recommended for discharge.  At this point, your service will generate the fifteen-year notice of eligibility.  When you receive this letter, remember to make a reserve component survivor benefit election (just as if you had received a twenty-year letter).  You will have ninety days from the time you receive the letter to make this choice.  Be sure to read my other articles on the survivor benefit plan to learn more about how SBP works.

Be sure to request transfer to the retired reserve and not to be completely separated from the military.  Your branch of service should know to do this but some (like the Army Reserve) will only do this if you request it (otherwise they’ll discharge you completely from service).  Once you have your transfer orders, you will be good to go until retirement age.

Has this helped you to better understand the options available to you?  I hope so.  If not, please be sure to comment below or send me an email with your questions.  Of course, comments are welcome even if you do not have questions.

If you think this information would be useful to someone you know then please be sure to share this article with that person.  Let’s get this into everyone’s head so they can make informed decisions.  As the cliché says, knowledge is power.

Thanks for being part of this audience today and, of course, thank you for your service.

D.J.

References:
10 USC 12731: Age and service requirements
10 USC 12731b: Special rule for members with physical disabilities not incurred in line of duty

Related YouTube Episodes:
YouTube Episode 0003 – The Basics of Reserve Retirement
YouTube Episode 0004 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
YouTube Episode 0005 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
YouTube Episode 0006 – The Basics of the Survivor Benefit Plan (SBP)
YouTube Episode 0009 – So, What is This Reduced Retirement Age Thing Anyway?
YouTube Episode 0014 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Podcast Episodes:
Podcast Episode 0002 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
Podcast Episode 0003 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
Podcast Episode 0004 – The Basics of the Survivor Benefit Plan (SBP)
Podcast Episode 0007 – So, What is This Reduced Retirement Age Thing Anyway?
Podcast Episode 0012 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Articles:
The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
When Do I Make an Election for the Reserve Component Survivor Benefit Plan?
How Much Will the RCSBP Pay to My Beneficiaries and What Will It Cost Me?
Should I Buy a Life Insurance Policy Instead of Choosing the Reserve Component Survivor Benefit Plan?
What Are the Advantages and Disadvantages of the Reserve Component Survivor Benefit Plan?
What Are the Coverage Options for the Reserve Component Survivor Benefit Plan?
Who Can Be Beneficiaries of the Reserve Component Survivor Benefit Plan?
How Do I Enroll in the Reserve Component Survivor Benefit Plan?
The Basics of the Survivor Benefit Plan
How Do I Enroll in the Survivor Benefit Plan?
Should I Pay for SBP or Buy a Life Insurance Policy?
Calculating Retired Pay Under the Current (Legacy) Retirement Plan
The Notice of Eligibility for Retired Pay (Twenty-Year Letter)


Podcast Episode 0039 – I’m Medically Unfit for Retention. Now What?

 

References:
10 USC 12731: Age and service requirements
10 USC 12731b: Special rule for members with physical disabilities not incurred in line of duty

Related YouTube Episodes:
YouTube Episode 0003 – The Basics of Reserve Retirement
YouTube Episode 0004 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
YouTube Episode 0005 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
YouTube Episode 0006 – The Basics of the Survivor Benefit Plan (SBP)
YouTube Episode 0009 – So, What is This Reduced Retirement Age Thing Anyway?
YouTube Episode 0014 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Podcast Episodes:
Podcast Episode 0002 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
Podcast Episode 0003 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
Podcast Episode 0004 – The Basics of the Survivor Benefit Plan (SBP)
Podcast Episode 0007 – So, What is This Reduced Retirement Age Thing Anyway?
Podcast Episode 0012 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Articles:
The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
When Do I Make an Election for the Reserve Component Survivor Benefit Plan?
How Much Will the RCSBP Pay to My Beneficiaries and What Will It Cost Me?
Should I Buy a Life Insurance Policy Instead of Choosing the Reserve Component Survivor Benefit Plan?
What Are the Advantages and Disadvantages of the Reserve Component Survivor Benefit Plan?
What Are the Coverage Options for the Reserve Component Survivor Benefit Plan?
Who Can Be Beneficiaries of the Reserve Component Survivor Benefit Plan?
How Do I Enroll in the Reserve Component Survivor Benefit Plan?
The Basics of the Survivor Benefit Plan
How Do I Enroll in the Survivor Benefit Plan?
Should I Pay for SBP or Buy a Life Insurance Policy?
Calculating Retired Pay Under the Current (Legacy) Retirement Plan
The Notice of Eligibility for Retired Pay (Twenty-Year Letter)

 


YouTube Episode 0041 – I’m Medically Unfit for Retention. Now What?

https://youtu.be/kkg77cxFcAE 

References:
10 USC 12731: Age and service requirements
10 USC 12731b: Special rule for members with physical disabilities not incurred in line of duty

Related YouTube Episodes:
YouTube Episode 0003 – The Basics of Reserve Retirement
YouTube Episode 0004 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
YouTube Episode 0005 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
YouTube Episode 0006 – The Basics of the Survivor Benefit Plan (SBP)
YouTube Episode 0009 – So, What is This Reduced Retirement Age Thing Anyway?
YouTube Episode 0014 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Podcast Episodes:
Podcast Episode 0002 – The Notice of Eligibility for Retired Pay (Twenty-Year Letter)
Podcast Episode 0003 – The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
Podcast Episode 0004 – The Basics of the Survivor Benefit Plan (SBP)
Podcast Episode 0007 – So, What is This Reduced Retirement Age Thing Anyway?
Podcast Episode 0012 – Calculating Retired Pay Under the Current (Legacy) Retirement Plan

Related Articles:
The Basics of the Reserve Component Survivor Benefit Plan (RCSBP)
When Do I Make an Election for the Reserve Component Survivor Benefit Plan?
How Much Will the RCSBP Pay to My Beneficiaries and What Will It Cost Me?
Should I Buy a Life Insurance Policy Instead of Choosing the Reserve Component Survivor Benefit Plan?
What Are the Advantages and Disadvantages of the Reserve Component Survivor Benefit Plan?
What Are the Coverage Options for the Reserve Component Survivor Benefit Plan?
Who Can Be Beneficiaries of the Reserve Component Survivor Benefit Plan?
How Do I Enroll in the Reserve Component Survivor Benefit Plan?
The Basics of the Survivor Benefit Plan
How Do I Enroll in the Survivor Benefit Plan?
Should I Pay for SBP or Buy a Life Insurance Policy?
Calculating Retired Pay Under the Current (Legacy) Retirement Plan
The Notice of Eligibility for Retired Pay (Twenty-Year Letter)

 


Help, I Need My Records. Where is My DD 214?

Let’s take a break from SBP this week and talk about another topic that comes up all the time.  People are always looking for documents from their service records, but are they necessarily looking for the right thing?

So, you’re trying to get a VA home loan or prove your military service for some other type of benefit.  Sadly and confusingly, most if not all of the organizations that are offering a service or benefit based on your service will automatically say, “Show me your DD 214.”  For a great many service members, particularly reservists, this is a distressing request.

The Department of Defense (DD) Form 214 is the “Certificate of Release or Discharge from Active Duty.”  It is, or should be, issued whenever a service member completes a tour of active duty of ninety days or more.  Whether or not you, as a reservist, qualifies for this document is widely variable and depends on whether you have completed the required amount of active duty service.

A great many reservists only have, if they’re lucky, a DD 214 when they finished their basic and advance training at the beginning of their reserve careers.  It is entirely possible for a reservist to complete twenty or more years of service and never receive another DD 214 because they did not have any long-term tours of active duty while they were serving.  Annual training and other short periods of active duty do not qualify for a DD 214.  This can leave reservists seeking to take advantage of service-based benefits in a bit of a quandary.

There is another form, call the DD 220 (Active Duty Report), which is generally issued for shorter periods of active duty (other than annual training).  Very often, reservists never receive these forms, either.

So, what do you do if you need to prove your service to an organization or government agency?  There are options, believe it or not.  If you are a currently serving reservist, you can find other documents in your electronic personnel record.  The most useful document you should find in that record is your retirement points statement.  This statement should show your entire military career and the number of retirement points you earned during each year of service.  If you are an enlisted member, you can also find DD Form 4, Enlistment / Reenlistment Document; if you are an officer, you can find your appointment as a commissioned or warrant officer.

Some organizations, particularly civilian agencies, may not understand what these documents are.  You may need to explain (politely) what the documents mean or give them contact information for your unit or a retirement services officer in order to assist them.

If you were a member of the Army or Air National Guard, you should have a copy of National Guard Bureau (NGB) Form 22, Report of Separation and Military Service.  While it is somewhat erroneous to say so, you can consider the NGB 22 as the National Guard equivalent of a DD 214.  The NGB 22 is verification of your National Guard service.  Sadly, if you discharged from any other reserve component, there is no single-source document which proves your military service.

Now, what can you do, particularly if you were National Guard and need a copy of your discharge documents?  For the National Guard of any state, there is a person as your state headquarters who can request records for you.  Some of them may need a signed Standard Form (SF) 180, Request Pertaining to Military Records, or a locally produced form from you before accessing those records.

If you separated from service after 2005, that state-level person will likely have access to the Interactive Personnel Electronic Records Management System (iPERMS) and be able to pull the documents you need very quickly.  If you separated prior to 2005, that person will likely need to request records from your state records archives warehouse.

If you served in a different reserve component, the first stop is to contact your branch of service or, if you are currently serving, access your electronic record.  I have placed links to each service’s electronic records website below.  If your branch of service no longer has those records, you can try the National Archives and Records Administration (NARA).  NARA will require an SF 180 from you in order to fill your request.  You can mail or fax a paper form to them or submit a request online.  See my notes below for a link to the NARA site and a link to an SF 180.

Now, here is a hint.  If you served in multiple components, such as the Navy Reserve and the Army National Guard and you are requesting records from NARA, do NOT mention your National Guard service in your request.  If you do, NARA will immediately (or, at least, has every time as of the time I wrote this article) refer you to your state’s National Guard headquarters and will not fill your request.

It is possible, especially if you were in several branches of service, that no one source will have your complete record.  Naturally, the ultimate responsibility for maintaining a complete record falls on the shoulders of the service member.

I will compile and post a page on my website of as many of the state National Guard records managers as I can find.  Building this complete list may take some time so please check back if you do not see your state listed.

References:
Air Force Personnel Records (https://mypers.af.mil)
Army Personnel Records (https://iperms.hrc.army.mil/)
Coast Guard Personnel Records (http://cgbi.osc.uscg.mil/2.0/contentpanes/personal_files/summary_sheet.cfm)
Marine Corps Personnel Records (https://sso.tfs.usmc.mil/sso/DoDConsent.do)
Navy Personnel Records (https://www.bol.navy.mil/DefaultPub.aspx)

National Archives and Records Administration (NARA) (https://www.archives.gov/veterans/military-service-records)

Request National Guard Archived Records (http://rcretirement.com/national-guard-archived-records/) (List In Progress)

Forms:
DD Form 214 – Certificate of Release or Discharge from Active Duty
DD Form 220 – Active Duty Report
NGB Form 22 – Report of Separation and Military Service
Standard Form (SF) 180 – Request Pertaining to Military Records

Retirement Points Statements By Service:
Air Force Reserve / Air National Guard: AF Form 526 – Point Summary Sheet
Army Reserve: DARP Form 549 or DA Form 5016 – Chronological Statement of Retirement Points
Army National Guard: NGB Form 23B – Army National Guard Retirement Points History
Navy Reserve: NRPC Form 1070-124 – Annual Retirement Points Record
USMC Reserve: NAVMC Form 798 – Reserve Retirement Credit Report
Coast Guard Reserve: CG Form 4175 – USCG Reserve Retirement Points Statement