If you or your spouse is a federal employee, the division of assets during divorce is a complex prospect. The issue becomes even more complicated when the different systems used for federal benefits are taken into account.
It is critical that you understand the rules surrounding these systems and how they can impact the outcome of your divorce case. Below, our Boca Raton divorce lawyer explains further. Federal employees typically have two defined retirement assets.
These are their Thrift Savings Plan and their federal employee pension. Employees who began working with the federal government prior to participate in CSRS, while those who began work as a federal employee after this date participate in FERS. Both systems allow federal employees to receive monthly payments after they retire. Like other retirement plans, federal benefits are typically considered marital property and so, they are subject to division during divorce.
The courts use a very specific formula to determine the marital share of a federal pension during divorce. The formula considers the total number of years the employee worked for the federal government, and the length of time the person was married during those same years.
The court will then determine how to divide it fairly, but that does not necessarily mean the benefits are divided fairly. Any funds contributed to the TSP throughout the marriage will be subject to property division hearings. Spouses of federal employees can receive their share of a TSP fund through direct transfer to a separate retirement account, a taxable distribution, or both.
