FERS Pension Division in Divorce: Survivor Annuity and TSP Orders

A FERS pension earned during a marriage can be divided in divorce, but the division only happens if a state court issues an order that meets the Office of Personnel Management’s specific requirements and OPM accepts it for processing.¹ FERS pension division in a divorce is driven almost entirely by the wording of that order. The order sets how much the former spouse receives, whether payments continue after the retiree’s death, whether they grow with cost-of-living adjustments, and whether a refund of contributions can wipe out the award before it ever pays. Generic language borrowed from a private-sector pension order will usually get rejected, and fixing a rejected order means going back to state court.

What the Pension Is Worth Before You Divide It

FERS pays a basic annuity built from two numbers: the employee’s “high-3” average salary (the highest three consecutive years of pay) and total years of creditable federal service. For most retirees the annuity equals 1 percent of the high-3 multiplied by years of service. Employees who retire at 62 or older with at least 20 years of service get 1.1 percent per year instead.²

An employee with 30 years of service and a high-3 of $100,000 has a basic annuity of $30,000 per year, or $33,000 at 62 or later. The former spouse’s share comes out of that number, which is why the formula matters at the settlement table and not just at retirement.

Three Ways to State the Former Spouse’s Share

OPM will pay a fixed dollar amount, a percentage or fraction of the annuity, or a formula whose value can be worked out from the order and OPM’s records.³ Each choice produces a very different result over time.

Pro Rata Share

The pro rata method is the most common approach. The numerator is months of federal service performed during the marriage; the denominator is total months of federal service at retirement. The fraction is then multiplied by 50 percent.⁴ An employee who served 120 months during the marriage and retires with 300 total months has a marital fraction of 40 percent, and the former spouse’s share is half of that, or 20 percent of the annuity.

The denominator isn’t locked in at divorce. It grows with every additional month the employee works. The marital fraction therefore shrinks as post-divorce service accumulates, which can meaningfully reduce the former spouse’s dollar amount even though the percentage formula never changes.

Fixed Dollar Amount

A fixed dollar award, say $800 a month, is certain. It is also frozen. It does not grow with future salary increases or with cost-of-living adjustments, and inflation quietly erodes it every year.

Flat Percentage

A flat percentage of the total annuity, such as 30 percent, gives the former spouse a share of the whole pension regardless of when the underlying service was performed. When a large portion of the employee’s service falls outside the marriage, this favors the non-employee spouse, because the share reaches pre-marriage and post-marriage service as well.

If the order uses a percentage, it should also say whether the percentage applies to the gross annuity, the self-only annuity, or the net annuity after survivor reductions. OPM will not interpret ambiguous language or guess at intent.

What the Court Order Must Contain

OPM reviews court orders under detailed federal regulations, and an order that misses the required pieces gets rejected.³

Identification

The order needs the employee’s full name, date of birth, and Social Security number, and the CSRS or FERS claim number if available. The former spouse’s current mailing address is also required, because OPM will send correspondence and tax documents there.⁵

Naming the Benefit

The order must identify the benefit as the “Federal Employees Retirement System” or “FERS.” References to a “government pension” or “retirement account” are grounds for rejection because OPM needs to know which retirement system it is being asked to divide.

Model Language

The regulations include appendices to Part 838 with recommended language for dividing the employee annuity and for awarding a former spouse survivor annuity.⁶ Using that model language substantially reduces the risk of rejection. Attorneys who specialize in federal retirement division typically charge $500 to $2,000 to draft the order, which is modest against the cost of amending a rejected one.

Two Pieces People Forget: the Annuity Supplement and COLAs

The FERS Annuity Supplement

Federal employees who retire before age 62 with enough service may receive a temporary annuity supplement that approximates a portion of Social Security until they turn 62.⁷ In 2025 the Federal Circuit held that OPM cannot divide this supplement unless the order expressly provides for it. An order that divides only the “basic annuity” gives the former spouse no share of the supplement.⁸ If the employee is likely to retire before 62, the order needs to name the annuity supplement specifically.

Cost-of-Living Adjustments

Most FERS retirees become eligible for annual cost-of-living adjustments starting at age 62, with limited exceptions for disability and survivor annuitants.⁹ Whether COLAs reach the former spouse depends on the drafting. A fixed dollar award captures none of them. A percentage of the gross annuity moves with COLAs automatically, as long as the order does not freeze the amount to a specific date.

Survivor Annuity: the Biggest Failure Point

Ordinary division payments stop when the retiree dies. Without a separate survivor annuity provision, the former spouse’s income ends on that date. This is where many divorce settlements fall short.

How It Works

A former spouse survivor annuity continues payments after the retiree’s death. The maximum is 50 percent of the retiree’s benefit before any reduction for the cost of the coverage.¹⁰ Electing full survivor coverage reduces the retiree’s monthly pension by roughly 10 percent. The court order must use specific language to award the benefit, and the Part 838 appendices contain model language for that purpose.⁶

If the order says nothing about survivor benefits, the retiree can elect to give the full survivor annuity to a current spouse instead, and the former spouse has no recourse. Once the retiree dies or retires, the order generally cannot be modified to add a survivor annuity.¹¹ The survivor annuity has to be handled during the divorce.

Remarriage Terminates It

A former spouse survivor annuity terminates if the former spouse remarries before age 55.¹¹ One narrow exception: the rule does not apply if the marriage lasted at least 30 years. If a terminated annuity’s triggering marriage later ends by death, annulment, or divorce, the annuity can be restored.

Protecting Against a Refund of Contributions

A federal employee who leaves service before retirement eligibility can apply for a refund of their retirement contributions instead of waiting for a deferred annuity. If OPM pays that refund out, the former spouse’s share of the annuity, any survivor annuity, and FEHB eligibility disappear permanently.¹² The employee must notify a former spouse before taking a refund if there is at least 18 months of creditable service and the marriage lasted at least 9 months, but notification alone doesn’t stop the payment.

A well-drafted order should address refund of contributions directly and direct OPM to pay the former spouse’s share of any refund before releasing the balance to the employee. OPM can only honor that provision if the order is already on file when the refund is requested. Filing the order with OPM early, rather than waiting for retirement, is the single most important protective step for the former spouse.

The Thrift Savings Plan Needs Its Own Order

The FERS pension is a defined benefit. Most federal employees also have a Thrift Savings Plan account, which is a defined contribution plan closer to a 401(k). Dividing the TSP requires a separate document called a Retirement Benefits Court Order. The pension order filed with OPM does not touch the TSP, and the TSP order does not touch the pension.

What the TSP Order Must Say

The order must name the “Thrift Savings Plan” expressly. Because the TSP is an account balance rather than a benefit formula, the award should be a specific dollar amount or a percentage of the balance.¹³ If the participant has both a civilian and a uniformed services TSP account, the order must say which one. The order cannot direct the TSP to pull from specific funds or from traditional versus Roth sources; distributions come proportionally from everything in the account.

Earnings, Losses, and Loans

By default, the TSP does not credit the former spouse’s award with earnings or losses between the entitlement date and the payment date. If the order calls for earnings and losses, the TSP calculates a rate of return for that window and applies it. The order can also say whether an outstanding TSP loan balance is included or excluded before the award is calculated. If the order is silent, the award comes off the gross balance.¹⁴

Taxes and Rollover

A TSP distribution paid to a former spouse under a court order is taxable to the former spouse. The TSP withholds 20 percent for federal income tax and will not accept a lower withholding request. The former spouse can defer taxation by rolling the distribution into a traditional IRA, a Roth IRA, an eligible employer plan, or their own TSP account if they have one.¹⁴

Filing With OPM

Where to Send It

Court orders affecting FERS benefits go to OPM’s Court Ordered Benefits Branch at P.O. Box 17, Washington, DC 20044-0017. Hand delivery and express carriers go to the Court-Ordered Benefits Section at OPM, 1900 E Street NW, Washington, DC.¹⁵ The submission must include a certified copy of the order bearing an original raised seal or colored stamp from the court clerk, along with the former spouse’s certification that the order is currently in force and unmodified.⁵

Timing

OPM does not publish a guaranteed timeline for reviewing court orders, and it acknowledges these cases take longer than standard retirement applications.¹⁶ Expect several weeks for the initial acknowledgment and several months for full review. OPM issues an acceptability letter to both parties. If the order is rejected, the letter explains why, and the parties must return to state court for an amended order.

If the Employee Is Still Working

File the order with OPM as soon as the divorce is final, even if retirement is years away. Payments do not start until the employee actually retires and applies for benefits. Unlike private-sector ERISA plans, a FERS court order will not trigger payments at minimum retirement age while the employee is still on the job.¹⁷ Filing early still does real work: it puts OPM on notice against a later refund of contributions and against a survivor election that names someone else. Once an acceptable order is on file, payments begin effective the first day of the second month after receipt.³

Health and Life Insurance Are Not Automatic

A former spouse may continue Federal Employees Health Benefits coverage under the “Spouse Equity” provisions, but only by meeting all three conditions: coverage as a family member under the employee’s FEHB enrollment at some point in the 18 months before the divorce, a court order awarding a share of the annuity or a survivor annuity, and no remarriage before age 55.¹⁸ A former spouse who doesn’t qualify may still get temporary continuation of coverage for up to 36 months if the employing office is notified in time.

Federal Employees Group Life Insurance can also be directed to a former spouse by court order, overriding the normal order of precedence for basic life, Option A, and Option B. A certified copy of the order must be on file with the employing agency (for active employees) or with OPM (for retirees) before the insured person dies.¹⁹ Where conflicting orders from different former spouses name different beneficiaries for the same coverage, the earlier-issued order controls.

1
Office of the Law Revision Counsel. 5 USC 8467 – Court Orders
2
U.S. Office of Personnel Management. Computation
3
eCFR. 5 CFR Part 838 – Court Orders Affecting Retirement Benefits
4
eCFR. 5 CFR Part 838 Subpart F – Prorata Share
5
eCFR. 5 CFR 838.221 – Court Order Requirements
6
eCFR. Court Orders Acceptable for Processing – Recommended Language
7
U.S. Office of Personnel Management. Chapter 51 – Retiree Annuity Supplement
8
United States Court of Appeals for the Federal Circuit. OPM v. Moulton
9
U.S. Office of Personnel Management. Cost-of-Living Adjustments (COLA)
10
U.S. Office of Personnel Management. How Is the Amount of My Benefits as a Surviving Spouse Determined?
11
Office of the Law Revision Counsel. 5 USC 8445 – Rights of a Former Spouse
12
U.S. Office of Personnel Management. Current/Former Spouse’s Notification of Application for Refund of Retirement Deductions
13
eCFR. 5 CFR 1653.2 – Qualifying Retirement Benefits Court Orders
14
Thrift Savings Plan (TSP). Court Orders and Powers of Attorney
15
eCFR. 5 CFR Part 838 Subpart A – Address for Filing Court Orders With OPM
16
U.S. Office of Personnel Management. Retirement Processing Times
17
U.S. Office of Personnel Management. Court-Ordered Benefits for Former Spouses (RI 84-1)
18
GovInfo. Benefits for Former Spouses Under the Federal Employees Health Benefits Program
19
eCFR. Federal Employees Group Life Insurance Program