Division of Military Disposable Retired Pay in Divorce Proceedings
Under a federal law called the Uniformed Services Former Spouse Protection Act (USFSPA for short), Missouri courts are empowered to divide a service members disposable retired pay in the same manner as property. Since disposable retired pay is a federal government entitlement and not a pension plan, the rules under ERISA do not apply, and the entitlement does not require a Qualified Relations Domestic Order. However, certain restrictions and requirements do apply for a spouse to receive a portion of the retired pay.
In all cases where a member is on active duty at the time of divorce, the member's rights under the Soldiers and Sailors Civil Relief Act must be observed. Also, a member must be married for 10 years during which the member performed at least 10 years of creditable military service. This is called the10/10 rule. It is important to note, however, that a service member is not even eligible to receive disposable retired pay unless he or she has served for at least 20 years. A spouse or former spouse cannot receive something that the service member is not entitled to receive.
Disposable retired pay is defined as gross retired pay less authorized deductions. The court can award a spouse any percentage of the disposable retired pay, all the way up to 100%. However, only awards of 50% or less can be enforced by the Defense Finance and Accounting Sevice. Basically, if application is properly made, the DFAS will withhold and pay directly to the former spouse their award of the disposable retired pay up to 50%. This guarantees that the former spouse will receive their portion of the award. Anything in excess of 50% is up to the servicemember to pay to the spouse.
The law requires that a division of property be expressed as either a percentage or a fixed amount. However, cost of living increases are only paid out for awards that are expressed as a percentage. Formulas may be used also, but the court order must include all the elements of the formula to be valid. If the service member is a reservist, the court order must include the "points" that the service member earned during the marriage.
Payments under the USFSPA will begin within 90 days of the member's entry on the retirement rolls, but reservists are not eligible to begin receivng the retired pay untl the age of 60. The payments will continue until death of either party or remarriage of the former spouse. Note that if the servicemeber dies before the former spouse, the former spouse may then be entitlted to income from the Survivor Benefit Plan.