I was divorced after 13 (155 months) of marriage. This time overlapped my time on active duty. Now that I am divorced the decree states that The plaintiff (Her) is awarded a percentage of the defendant’s disposable military retired pay to be computed by multiplying 50% times a fraction, the numerator of which is 155 months of marriage during the members creditable military service, divided by the member’s total number of months of creditable military service. That Plaintiff shall receive payments at the same time as the defendant.
My question is at the time I wan an E-7, now will her amount continue to increase as I continue to get promoted? Also, will it also increase if I remain on active duty past 20 years. I have found this NC statute and wonder if it would have any bearing on me filing a motion to modify this order to have it read for her to receive retirement at the pay grade I was at time of the separation and ant 20 yrs?
North Carolina General Statutes § 50-20.1 Pension and retirement benefits:
(d) The award shall be determined using the proportion of time the marriage existed (up to the date of separation of the parties), simultaneously with the employment which earned the vested and nonvested pension, retirement, or deferred compensation benefit, to the total amount of time of employment.The award shall be based on the vested and nonvested accrued benefit, as provided by the plan or fund, calculated as of the date of separation, and shall not include contributions, years of service, or compensation which may accrue after the date of separation.[/u] The award shall include gains and losses on the prorated portion of the benefit vested at the date of separation.
Tim,
Great question, I too have the same ? I was married 18yrs when i retired after 27 long years in the USN. My wife and I have been seporated now for 18 months. I did the calcs and determined that she would get .70 which equals 35%, so I have been paying her that amount from my monthly retirement check. I have done this just to “be a good boy” in any eyes of the court. I gave her all her bills too along with the monthly check. I told her that when we do get divorced I would go through DFAS to set up her monthly payment, which takes money away from the taxable amount I will pay towards. I was told that the date of seperation (the day I left) would be the end date for the final calcs on how much she gets from the retirement, hopefully I’m not wrong. Will keep a eye out for any good news to your post from a pro. Good luck!
Good Luck. I think the statute is a little contradictory. I suspect your decree overrides the statute and she will participate in your increased retirement pay due to promotions. Given the $1000s of dollars to contest it there might be issues. Does she continue to get the retirement pay if she remarries?
It seems to me that a calculation needs to be done as to how much your retirement was worth at the time you are divorced.
If you were employed by the firm in 2000 (at $18K per year), married in 2002, and you get divorced in 2010 (at $20K per year) then the ex- gets 80% of half of what your retirement plan is worth. Say you have a defined benefit plan to pay 2% of your income for every year of service. With 10 years in your plan is worth 20% of your $20,000 per year ($4K per year). She gets half of that, or 2K per year. Now, if you work another 10 years there and get a big raise to $30,000 then your plan gives you 20 x 2% = 40% of 30K ($12K per year). If you then retire she is only entitled to $4k per year since the statute quoted gives the ex- no part of the raise (nor should it).
If you have a defined contribution [401(k), et cetera] plan and it is invested in the stock market she shares in those gains.
Regards vesting it seems that some plans include provisions such that your are only entitled to the money after a certain number of years. Normally one gets nothing if one serves under 5 years. To continue my example, if it was 15 years of service in our previous example I could argue the pension was worth nothing at the time of divorce. However she is entitled to a share of the non-vested portion, so vesting doesn’t enter into the equation. Interestingly she is only participating in the gains and losses on the vested portion, which in this modified example would give her no risk from losses and no rights to gains.
Just to get on a soap box: Judges don’t pay taxes on retirement pay. So, if you have $9,000 equity in a house and and an IRA worth $10,000 they are likely to make you pay the $500 difference. What you really want to do is get a QDRO (Qualified Domestic Relations Order) to split the IRA giving her $5000 of IRA with its inherent tax liability and get a $4500 check for the home equity.
Based on what you’ve posted, it sounds like the order is correct. For every year you work post separation, her share of your retirement goes down.
@Jim - You don’t use a QDRO to split an IRA.
Mr. Short,
I am looking for some clarification on my original post if you can provide it. Would it be a waste of time for me to attempt to file a motion to “clarify” the divorce decree to state the % of my retirement that the EX will receive be based on my rank at the time of separation from her as the NC statue states? Or does she continue to get a “pay raise” for all the work I do in the Army until I retire? I am willing to spend the money to get it done as I think it will pay for itself in the long run if it is modified.
To my knowledge, there is not a way to get an order that is already entered “clarified.”
My reading of the statute makes your order sound proper. The longer you are in the military, the more months are used in the denominator for the equation and the lower of a percentage she gets.