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


Bonus Episode 006 – Tricare East Update

There is an important change coming up for those of you in the former Tricare North region. Please see the quote below from an update flier I received today.

WHO MAY BE IMPACTED BY THIS CHANGE?

Soldiers, families, and retirees previously covered by Health Net Federal Services in the TRICARE NORTH Region, who are now covered by Humana Military under the new combined TRICARE EAST Region, and are paying for the following coverages:

  • TRICARE Reserve Select (TRS)
  • TRICARE Retired Reserve (TRR)
  • TRICARE Young Adult (TYA)

IMPORTANT: Effective January 1, 2018, due to the contractor change from Health Net Federal Services (HNFS) to Humana Military, all Soldiers and Retirees formally in the TRICARE North Region, paying their premiums/fees by auto-payment from a banking account using Recurrent Credit Card (RCC) or Electronic Funds Transfer (EFT) to Health Net Federal Services MUST set up a NEW auto-payment with Humana Military. By law, the contractors cannot exchange credit card or banking information. Even if you already have auto-payment from your bank account to Health Net Federal Services, you MUST re-establish a NEW payment with Humana Military.

* This does NOT affect Soldiers or retirees in the South Region or who currently have an Allotment (PRIME ONLY) set up with DFAS. These allotments were transferred and do not have to be re-establish to a new allotment.

IF IN DOUBT, please check the Humana Military website at www.humanamilitary.com/provider-east (which will change to www.tricare-east.com in the near future) or call to verify at: (800) 444-5445.

This notice is important not only for keeping Tricare coverage. It is also critical in order to prevent having to re-enroll to keep coverage. Re-enrolling requires paying two months of premiums up front. Let’s help people prevent having to do this. Please pass this information on to others you think should know about it.

By the way, the contact number I originally gave in the YouTube episode is incorrect. The correct number is shown in this article and on the corrected flier.

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

D.J.

References:
Tricare East Region Update


YouTube Episode 0054 – Attending an Online Transition Assistance Program (TAP) Briefing

Here is a playlist of a transition assistance program briefing.

References:
* Soldier for Life – Transition Assistance Program
* DD Form 2648
* Zip File of Transcripts
* TAP Playlist



What is the Gray Area?

Let’s start off with a little easier topic.  This week’s topic is, “What is the Gray Area?”  You’ve heard me say in the past a gray area retiree, reserve retiree, retiree awaiting pay, things like that. Well, this week I’m going to explain just what is.

 

Now, for an active-duty retiree, someone with the required amount of service, when they retire they get

retired pay and all the benefits that go with retirement right away.  We reservists are on a slightly different plan. When we retire, if we are under age sixty, we go into what is called the “gray area.” The official term is being put in the Retired Reserve but that’s a lot of syllables so we say gray area.

 

The reason we say that is it is kind of a gray area. You’re retired but you’re not. In in a really official, technical category all that has happened is you’ve been transferred into another component in the Army Reserve.  They call it a control group.  You’re in a different status but you’re still in the military, not fully retired.

 

The Retired Reserve is essentially a holding cell, a waiting room, waiting for you to reach the age at which you can receive your pension, but that is not without benefit.  There are several benefits to being in the Retired Reserve.  One of them is, since you still have a military status, then you are still accruing longevity of service.  Anyone familiar with the military pay scale knows that the longer you’re in service, the more money you make up to a certain point per pay grade. The farther along that scale you go and as your length of service increases, the more money you make. So when you are in the Retired Reserve you still gain longevity for pay purposes.  You also still maintain the cost-of-living increases that go along with still being in the military.  If you’re discharged completely, you would not get those cost-of-living increases. Your pay will be based on the pay scale in effect when you separate.  Those two little things are actually quite big when it comes to the money that goes in your pocket once you hit the right age.

 

What about other benefits there are, things beside just the cash that make being a military retiree so unique?  Well, let me go through a quick list of what some of those are.  For those interested you can find in the notes a chart that I’ve made. I actually borrowed it word for word and just reformatted from the Human Resources Command website just for full disclosure. I didn’t write this myself but there are some provisos, some slight changes I’ll make verbally as we go along because this isn’t entirely accurate.  It technically is but there are a few exceptions, to some of the things here. Let’s just go along so on some of these hits some of the major topics and see what we can make of it.

 

Let’s take a look at the first and most obvious sign of being a gray area retiree,  your military ID card.  You no longer have a common access card (or CAC).  You have a teslin – or paper-based and laminated – card.  For people in the gray area, that card is pink in color.  There is a separate card for their dependents – spouses and children –This card is tan.

 

That is the most obvious time of being a gray area entirely and actually it’s the key to everything else.  If you do not have a Retired Reserve ID card then please go and get one.  In fact, I’ll post in the notes a link to a site locator for DEERS at ID card sites. If you don’t have an ID, card make use of this and find the closest ID card facility to you.  In fact, in the future, I will do an article on the types of ID cards and how you can get the proper one for yourself as well as the documents you would need to do so.

 

Now before I go into the rest let me talk about the other type of ID card.  Once you’ve actually hit age sixt,y once you actually start receiving your retired pay, you actually are eligible for a different type of ID card.  This one is blue and has a few key differences over the pink card.  The most important one is on the back.  There’s a section that says, “Medical,” with two sub-clauses.  The first says, “Direct,” which means on-post medical care and the other says, “Civilian,” which means civilian providers who accept Tricare.  Both of those will say, “Yes,” on them.  This means you were Tricare eligible and your blue ID card is actually your Tricare health insurance card, as well. Your dependents will also have new cards with the same statement on the back.  This is the primary difference other than color from the Retired Reserve card.  For Retired Reserve ID cards for Tricare eligibility, it says, “no.”

 

Like I said, the ID card is the key to unlock all of the other benefits I’m going to describe.  Let’s go through a few of those.  Obviously, the most important, for people who have military installations in their states, is access to those installations.  There are a lot of facilities and benefits that can be utilized if you can just get on post and your ID card is the way to get on post.  That proves that you are eligible to make use of everything there and if you are not in uniform, which you wouldn’t be if you’re retired, then obviously when you are in these facilities and trying to make use of them you’ll be asked to show your ID card.  This is the most common and most easily understood by those of us who make use of commissaries and post exchanges.  If you’re in civilian clothes, they ask to see your ID card and after that it’s just another transaction.  You’re good to go.

 

So we have military installations and all of those goodies, that’s the most obvious benefit of post access but there’s a lot more than simply the PX (or BX if your Air Force) and the commissaries.  There’s also theaters, shoppettes, recreational facilities, bowling alleys, libraries, other little stores, things of that nature.  All of these are going to want to see your ID card before you come inside or when you’re actually making a purchase.  You’re going to need to present those cards in order to prove you’re eligible to make use of those facilities.

 

Now let’s get into some other things. I mentioned medical facilities.  Well, if you are a reserve retiree, then in most cases you are not able to use the medical facilities unless you’ve been subject to a retiree recall and put on an active duty status.  During the time you’re in that status, you yourself would have access to medical facilities but your spouses and dependents would not.  That obviously would change once you are age sixty and Tricare eligible.  Then you can all make use of medical facilities.

 

Now let me mention one thing with this chart that I’m going to post.  The next thing on this list is Tricare and the chart says, “not eligible,” for gray area retirees.  There is a version of Tricare called Tricare Retired Reserve which is eligible, which is available for purchase.  It is quite expensive.  The reason for this is simply that Tricare itself is a heavily subsidized benefit for those of us who actually pay for it, but the Tricare Retired Reserve version is not subsidized.  You pay the full price of that benefit.  For a single member, the Tricare Retired Reserve rate is a little over $400 per month.  I don’t have the numbers right in front of me but I have talked about them in the past.  For a family, the monthly rate is a little over $1,000 per month.  Those premiums are only in effect while you’re in the gray area.  Once you hit age sixty, there are no premiums unless you choose a different version Tricare which is premium-based.  Some people choose to use Tricare and some choose to go with health care from other sources, health insurance from other sources, I should say.  That’s your prerogative; that’s your choice.

 

Another thing available to reservists in the gray area, believe it or not, is the Tricare Retiree Dental Program.  You are eligible to purchase that.  Those premiums are different based on your location.  I’m not going to give any examples of it right now.  If you’d like information on that just go to TRDP.org.  You can find the premiums for your area.  That’s also available for purchase when you are receiving retired pay.  Also, please remember, based on my YouTube episode, “Tricare Updates for 2018,” that next year TRDP is going away.  The Tricare Retiree Dental Program will not exist in 2019.  What will replace it is the Federal Employee Dental and Vision Insurance Program  (FEDVIP).  That will be something in which you can start enrolling in November of this year and make use of it starting in 2019. Your status in the DEERS database –the ID card database – needs to be updated to reflect your eligibility for either Tricare or the dental program.

 

Let’s move on to some other goodies.  One of the biggest benefits that I have pointed out to people when they are going into the Retired Reserve and when they are signing up for their retired pay is the use of military lodging facilities.  This is a huge savings to the wallet when you are traveling across the country.  I’ve had to go to various places in my career and have chosen many times to stay on post because of the significant cost difference.  In fact, on several occasions just in my area, I was put on temporary travel orders and the cost to stay in a hotel on the economy was about $120 per night but I was able to stay in a room on post for about $24 per night and sometimes less.  That in itself is an enormous savings and you can use that while you’re serving, when you’re in the Retired Reserve, and when you’re receiving the retired pay.  Again, all you have to do is show your ID card and you’re good to go.

 

A little utilized benefit, one that requires a great deal of flexibility, is space-A travel.  Space-A means space available.  This means that you could, if there is space on that flight, hop onto any military flight going to almost any destination and either have a quick vacation or sightsee.  With space-A, it’s exactly what it says; if there’s space available and if they’re accepting passengers.  So if you’re going to use this, the recommendation is to have a very flexible time frame

 

Here’s another interesting little thing you may have heard of, SATO (or Carlson Wagonlit).  This is a military-contracted travel agency.  They can help you set up trips, as well.  You can use it just about anywhere and again you just need your ID card.  You can use them to book travel, book hotels, flights, rental cars, all of that.  You just have to give them a call.  Rather than give all kinds of conflicting information I would say just hop on your browser of choice and search for Carlson Wagonlit and you can find.

 

Now we’re getting into some deep stuff here, some of the more morbid things that people don’t like to think about but we need to keep in mind; survivor assistance, casualty assistance, things of that nature.  That’s actually where people like me come in or survivor assistance.  If the person was gray area or a retiree receiving pay then the assistance from survivor benefit counselors and employees of survivor outreach services are available to you.  All you have to do is ask.  In fact, specifically with the survivor outreach services people, they are not allowed to reach out and make contact with survivors.  They have to be contacted first but that is where people like me, a retirement services officer, can bridge the gap.  I can act reach out to survivors and offer services as they’re available and more often than not those services are happily accepted.

 

Here we’ll get into a happier note there are a great many programs out there for families and children that fall under the Family Services umbrella.  This could be anything from child and youth development programs, leadership camps, all kinds of fun activities for children.  There’s a wide array of programs out there.  There is a great deal available to the families, not just fun stuff but also emergency assistance.  There are veterans assistance programs so if you had a short-term emergency, we could find ways to step in and assist.  Resume services, survivor outreach actually fell under family programs in my area, and personal financial counsellors that I’ve described in the past are also available.  Strangely enough, funeral honors program fell under family programs (in my area, at least.  That was odd).  That’s just some of the services available from family programs so if you search for military family programs online you’ll finding a long list of very interesting little tidbits that are available to you.

 

Now we go back to the darker topics, life insurance.  You are not eligible for servicemen’s group life insurance after you leave service.  You’ve got to be in actively drilling or actively serving status in order to have SGLI. That includes people in the individual Ready Reserve; by the way.  You are not considered to be in the Ready Reserve, an actively drilling status, so you are not eligible for SGLI when you’re in that status.  You have to come out, perform military duty, pay the premiums, and, if you choose, go back into an IRR status, but that coverage will maintain for at least the month for which you pay the premium. If you’re coming in and out every month, you still have coverage the whole time.

 

When you leave service, within 120 days, your SGLI coverage will lapse and, if you choose, you can convert that prevents that coverage to a veterans group life insurance policy.  Personal opinion forthcoming. Warning!  Warning!  I would not recommend going with veterans group life insurance (or VGLI) for one simple reason.  It is extremely expensive.  If you choose the maximum $400,000 in coverage then every five years effectively the premium doubles.  Let’s go all the way to the extreme.  If you are seventy-five years old, the monthly premium for VGLI is $1,840 per month and you can certainly find better rates elsewhere.  For the younger crowd, it is slightly better than $1,800 but it very quickly becomes excessive so you can easily find other insurance out there at a much better rate.

 

The last one that I’m going to cover and not even really in detail is Veterans Administration benefits.  Reservists are a funny crowd as far as the VA is concerned.  They (the VA) are in their mindset active-duty centric.  They’re used to dealing with people who were active duty.  They’re not used to reservists even though we actually outnumber the active duty folks.  Some reservists are eligible for VA benefits, compensation for disabilities, some medical care on a limited basis, home loans, educational assistance, things of that nature.  Reservists do have limited VA benefits it but it varies widely from individual to individual.  It’s completely based on your type of service.  If you were just a drilling National Guardsman your whole career then you would have some educational assistance, a GI bill of some sort, be eligible for a home loan, and, if you are retirement eligible then you could be eligible for things like a be a VA-paid marker for a grave site.

 

If you have had active duty experience particularly if it’s deployments, mobilizations, or active duty over a hundred eighty days and not for training purposes, then you could have a much wider set of the VA benefits.  Again, it varies wildly from person to person.  It would be best to contact a VA rep or a veteran services officer – actually that’s who I’d recommend moreso, a veteran services officer in your area – and they can explain what’s available to you.

 

This last item I’m going to hit just in kind of a glossing over manner.  State benefits, every state has its own set of service member benefits of one type or another.  In fact, what I’d like to know from you, the audience, is would you be interested in episodes that pick a certain state and describe all of these service member benefits for that state?  Would that be of interest and of use to you?

 

Like I said, I did not go over everything on this chart. You can find it by looking in the notes.  There’s a great deal I didn’t cover and I think you’ll be surprised when you take a look at what’s here.  This is just what’s posted officially.  There’s a lot more out there.  For example, during Veterans Day and Memorial Day, a lot of civilian companies offer discounts to service members and to veterans.  Very often they want to see an ID card and / or a DD-214 or NGB 22. I would recommend of course the ID card.  It’s a lot easier to carry around and it doesn’t have personal information splattered all over it.

 

In fact, let me throw that out there real quick.  If you have an ID card that has your social security number on it or the social security number of your sponsor, use the site locator I’m going to put in the notes.  Make an appointment with an ID card facility and get a new card.  The new cards have a Department of Defense ID number on them instead of the social security number so if it gets lost or if a copy is made then you don’t have as much of your personal information floating around out there as temptation to identity thieves. I will repeat if have a card with an SSN on it, go get a new card now.

 

I believe that’s quite enough for this week.  As always, if you have questions or comments please post them in the comments section of this article so I have a good indication of how many people are actually paying attention out there.  That’s always cool.  If you think this information is useful and would benefit other people, please hit share and send this to them so those people can make use of this information as well. I always enjoy comments from you.  I’ve had several just today, in fact.  That was a nice experience, as well.  Thank you for being part of this audience, thank you for your activity, thank you for your continued interest, and, of course, thank you for your service.  Have a great day.

 

D.J.

 

References:
Benefits for Gray Area and Recipients of Retired Pay
Soldier for Life Blog
RAPIDS Site Locator