Military Retirement Pay – Service Members’ Death
Military Retirement Pay Continuation after a Service Member’s Death
In 2011, Oklahoma Senate Bill 528 and Bill 917 proposed changes to Oklahoma’s treatment of the federal Uniformed Services Former Spouses’ Protection Act (USFSPA) which permits division of military retired pay in a divorce.
Some people view military retired pay as similar to a civilian pension. These people believe courts should divide retired pay by applying the same rules used when dividing pensions.
A key proponent for the 2011 Oklahoma bills, Rep. Gary Banz, R-Midwest City, aimed to reduce this “pension concept” and brought up the common argument,
“[Military retired pay] does not survive the death of the service member” and therefore, is unlike a pension; the implication being, military retirement pay should not be divided.
This argument has its flaws. Division of military retirement pay can survive the death of a service member. It can continue in the form of an annuity to former military spouses designated for the Survivor Benefit Plan (SBP). In such a case, should the service member pass away first, the participating former spouse will continue to receive a division of pay.
To clarify this further, participate means contributions have been made into the SBP plan and the former spouse is designated for SBP. Steps must be taken for former spouses to participate and SBP is a common topic in a military divorce. For more information, see an overview of the Survivor Benefit Plan. and details inside the book, Military Divorce Tips.
This is an example of how military retirement pay is a unique benefit in and of itself, not falling under the exact definition of property, asset, income, pension, alimony, deferred compensation, or whatever term you choose to associate with it.
Representatives making the decisions should not have to rely on inaccurate declarations. Service members, spouses, lawyers, and others with expertise must continue to speak up to help clarify the unique aspects of the USFSPA, the other former spouse entitlements attached to it, and any deficiencies in the current legislation. See a list of Oklahoma contacts to voice your opinions.
Tracey,
SBP is not automatic and not manated . In fact it is an insurance policy that has to be bought. Rep Banz statement is true and on point with regard that it does not survive the death of a service member . Please see the current DFAS FAQ reference below with link.
17 What happens to USFSPA payments going to a former spouse when the member or the former spouse dies?
When a member dies, USFSPA payments going to a former spouse will stop. If the former spouse dies, payments will also stop. Former spouse payments cannot be passed on to a third party such as a beneficiary under a will when a former spouse dies. Once former spouse payments stop, those funds will revert back to the member’s pay.
http://www.dfas.mil/garnishment/usfspa/faqs.html
Hi Frank,
Thank you for adding your thoughts and additional information for readers.
Both the article referencing Rep Banz and the DFAS link you provided fail to mention how a former military spouse’s participation in SBP continues the division of military retirement pay in the form of an annuity after the service member’s death. Numerous former military spouses are properly set up to receive this SBP annuity, and in some cases, military former spouses need to participate in SBP in order to receive life-time medical care under CHCBP rules.
The intricacies of SBP, military retirement pay, and the various options for decree language addressing SBP are covered in depth in the book, Military Divorce Tips.