Divorced Federal Employee Benefits: What You Need to Know
Divorce is a significant life event that can have lasting impacts on many aspects of life, including federal employee benefits. Whether you're an active or retired federal employee, it's essential to understand how a divorce affects your retirement, insurance, and survivor benefits. Here's a comprehensive guide to help you navigate the complexities.
1. Retirement Benefits (FERS/CSRS)
Division of Pension
Federal Employees Retirement System (FERS) and Civil Service Retirement System (CSRS) pensions are considered marital property and may be divided in divorce. Courts can award a portion of the pension to a former spouse through a court order acceptable for processing (COAP).
The COAP must be properly worded and submitted to OPM (Office of Personnel Management).
The portion awarded can be based on years of service during the marriage or other formulas.
The award is not automatic—a court must mandate it.
Impact on Retirement Plans
If you're approaching retirement:
Divorce may delay retirement if your annuity is reduced.
A portion of FERS annuity supplement may also be awarded, depending on the COAP.
2. Survivor Benefits
If you're a federal retiree, your former spouse may still be entitled to survivor benefits if specified in the divorce decree or COAP.
Key Points:
You must elect (or be ordered by the court to elect) a former spouse survivor annuity.
If awarded, this reduces your monthly annuity.
A former spouse may receive a full or partial survivor benefit, depending on the agreement.
Note: If you remarry, you may need to choose between providing survivor benefits to your current or former spouse, unless both are specified in separate elections.
3. Thrift Savings Plan (TSP)
The TSP, like a 401(k), is also subject to division in a divorce.
Division Mechanism:
It requires a Retirement Benefits Court Order (RBCO).
Funds can be split as a dollar amount or percentage.
Once awarded, the former spouse can roll the amount into an IRA or other qualified plan.
TSP does not automatically grant access to former spouses—you must submit a properly structured court order.
4. Federal Employees Health Benefits (FEHB)
Coverage After Divorce:
A former spouse is no longer eligible for FEHB under your plan after divorce.
However, they may:
Enroll in Temporary Continuation of Coverage (TCC) for up to 36 months (at full cost + 2% fee).
Qualify for coverage under Spouse Equity if they receive a portion of your annuity and meet certain conditions (e.g., were married at least 9 months).
Make sure to update your enrollment status (e.g., from “Self and Family” to “Self Only”) after divorce.
5. Federal Employees Group Life Insurance (FEGLI)
A divorce may affect life insurance beneficiaries and rights.
Important Considerations:
Former spouses can be named beneficiaries, but it must be specified by the employee.
A court may order you to maintain FEGLI coverage with your ex-spouse as the beneficiary.
Always update your designation of beneficiary form (SF 2823) after divorce.
6. Social Security and Spousal Benefits
While not a federal-specific benefit, divorced federal employees should consider their Social Security rights:
If you were married 10 years or more, your former spouse may claim spousal benefits on your record without affecting your benefit.
You may also claim divorced spousal benefits from a former spouse’s record if you’re eligible.
7. Updating Personal Records
After a divorce, promptly update the following:
Beneficiary designations (TSP, FEGLI, unpaid compensation)
Emergency contact information
Marital status with HR or OPM
FEHB enrollment type
TSP account profile
Final Thoughts
Divorce can significantly impact your federal benefits, but being proactive and well-informed can prevent surprises down the line. Review your court decree carefully and ensure that orders are properly submitted to agencies like OPM and TSP.
Consulting a family law attorney with federal benefit experience—and possibly a financial advisor—can be invaluable during this process.