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Tutorial on the
2017 National Defense Authorization Act and USFSPA
Brian Mork, Ph.D. [Rev 1.33]
This page is a tutorial on dividing military retired pay in divorce
cases when the military person may be
promoted before the marriage or after the divorce. Over the past
decade or more, states have moved toward standardizing on a certain way
to divide the pension. This web page introduces what became law in 2017 and how to actually implement it in court.
Demonstrating equity, the new law could
payments to either of the spouses. Military retirements are a
significant benefit, earned by both women
and men. As of March 2011, there were more
than twice as many military women divorcing
than men. Among enlisted, the military women divorce rate is
about 3x that of men. The overall military divorce rate in 2011
than it was in 2001. Dollar value of a military retirement in 2012
dollars range from $945,000 for an E-7 to
$2,800,000 for an O-8. Military
divorce is a significant social
affecting both sexes.
If you are an attorney, it is incumbent on you to respresent the
interests of your client. Being uninformed may set you up for a
malpractice suite. Any military client will understand issues of honest and integrity. For ethical and professional
reasons, the family law community of attorneys and courts should be
interested in getting this right.
A sister web page about dividing military
promotion enhancements earned after divorce
has been published for years. The two issues are almost the
same. A super-concise
is also available. The sister web page discusses with more detail
how objective parties have weighed in on and agree that retirement
enhancements due to promotion outside of marriage are not a marital
asset and are not comingled. Six examples:
- A 2001 United States Armed
Services Committee report to Congress.
- In 2005, the Florida
Third District Appellate Court reversed
- In 2009, a Michigan
Appellate Court reversal.
- On 5 May 2012, a new Oklahoma
SB1951 Section 3(F).
- On 28 October 2013 the Pennsylvania House Democratic Committee
held hearings on HB1192.
Spring of 2016, for the Fiscal year 2017 National Defense Authorization
Act (NDAA), U.S. Representative Steve Russel (R-OK) introduced an
amendment to adjust the USFSPA. This update was recommended by
the September 2001 Department of Defense report to the Armed Service
The proposal was unanimously accepted by the bi-partisan Armed
Services Committees. The Senate
version (S. 2943 Sec. 641) said,
calculating the total monthly retired pay to which a member is entitled
for purposes of subparagraph (A), the following shall be used:
The memberís pay grade and years of service at the time of the
(ii) The amount of pay that is
payable at the time of the memberís
retirement to a member in the memberís pay grade and years of service
as fixed pursuant to clause (i)."
While the House bill (H.R. 4909 Sec. 625) said,
entitlement] is to be determined using the member’s pay grade and years
of service at the time of the court order, rather than the member’s pay
grade and years of service at the time of retirement, unless the same’’
The legislative reconciliation process yielded the final bill as shown here.
In many states, case law affirms that the marital asset is not to be
affected by earning effort outside the bounds of the marriage. In
Michigan, see the
1988 Kilbride Appellate decision, which was quoted, re-affirmed, and extended in
the 2009 Skelly Appellate court decision. Other states have
similar laws. The Kilbride decision lays out a litmus test that the marital retirement asset must be defined so
that whatever either party does after the divorce cannot make it go up
or down. Quoting from Kilbride,
portion of a pension attributable to service credit earned before the
marriage or after the divorce is not distributable as part of the
"The decisions of the parties
following the judgment of divorce must not affect the value of the
distribution of a portion of the pension to the nonemployee spouse."
This is not talking about COLA increases, which both members passively
receive for all time after the divorce, although states like
Indiana withhold COLA from division also because it is not yet earned
at time of divorce. Because there were no promotions in Kilbride, a
single coverture fraction worked fine. However, the new law
duplicates that calculation and also creates equity where there is a
promotion outside the bounds of the marriage, consistent with the
foundational argument and litmus test of Kilbride.
Mathematically, the inequitable time-only coverture method used by some courts has been:
asset = DRP ∗ (marital duty time
/ total duty time)
where "DRP" means "disposable retired pay", which is exactly defined
in USFSPA. After applying this formula, typically 50% of the marital
asset is awarded to each party.
new law changes the definition of DRP in 10 USC 1408(a)(4), which is
implemented by using an additional coverture fraction of
monthly pay from standard military pay tables. Because the ratio
is the important factor (not the
two dollar amounts, per se, that make up the fraction), it’s important
to note that the two
monthly pay amounts at the two different ranks are taken off the same
year’s pay chart – do not take one from the year of divorce and one
from the year of retirement. The new method uses a new DRP.
This new DRP can then used with a time-based-only coverture because the 2nd fraction is built into the definition of DRP.
DRP_new = DRP_old * (pay at divorce / pay at
The “pay at divorce” is the new thing fixed by paragraph (ii) of the
law quoted above. The result
is a DFAS
percentage method that is not a DFAS fixed method.
asset = DRP_new ∗ (marital duty time
/ total duty time)
Or, to better compare this to the old formula, you can do the same new calculation this way:
asset = DRP_old ∗ (marital duty time
/ total duty time) ∗ (pay at divorce / pay at
Writing the formula fractions out long hand shows this IS the Dual Coverture (DC) method I've advocated for the past six years. If all the mathematics confuses you, see the slide show summary of the new method for visual aids.
I've received some push back against the new law, asking for case
law examples that support the new law. This seems to ignore that correcting bad case law is
the precise purpose of a new statutory law.
For example, the USFSPA came about in response to a U.S. Supreme Court
decision. The main point I'm trying to make
is about education: if others teach factual errors and write white
papers with gloom-n-doom conclusions based on false assertions and inuendoes, this provides a
tremendous disservice to attorneys and legislators and judges trying to
get their heads around these issues.
Please, review the material published on these web pags and let me know
where it's faulty. There is a concise slide show presentation on
this topic that can be used for training or continuing professional
education. If an interactive conversation will help,
please give me a call or email!
As an example, if a disposable retirement check was $3298 in 2016 dollars,
and 4700 duty points were accrued during the marriage and 5500 duty
points were accrued during the entire military career, a simple
time-based coverture fraction would determine that the marital
asset would be
marital asset = $3298 *(4700 / 5000) => $2818.29
The marital asset is not a fixed dollar amount because both parties
receive cost of living increases proportional to the military pay table
cost of living increases each year.
Also, the marital asset is not a pre-fixed percentage determined at time of
divorce because the fraction is not possible to calculate until
retirement is reached. For example, if no military duty is done
after the marriage, the ex-spouse would get 50% of the total
retirement. However, if post-divorce duty is done, the time-based
or duty-based coverture fraction allows one to break out the unchanged
marital asset from a retirement check and the spousal award will be
less than 50% of the bigger retirement check. The traditional single
coverture solution is a mathematical precise and exact calculation
designed to keep the divisible marital asset the same, not to dilute it
in any way. Again, to forestall confusion, we’re not talking about COLA increase which happen
for both parties each year and accrues even during the years before
retirement pay starts.
Okay, so a single coverture fraction works fine if there are no
promotions, and DC/NDAA 2017 retain this featuer because the 2nd fraction will be 1.0 or 100%.
However, if promotion happens outside the marriage,
inequity happens with the old formula. For example, if the disposable
retirement check at higher rank was $5000 in 2016 dollars, and
everything else stays the same, the old formula would calculate a
marital asset of $5000 * (4700/5500), or $4272.72 in 2016
dollars. This is a 51.6% inequitable windfall to the ex-spouse
even though they had nothing to do with the promotion and contributed
nothing after the divorce!
Now, see that the new NDAA law restores the marital asset to what it
should be. Since DFAS will be responsible for implementing the
new definition of DRP, you can use the same time-base coverture
fraction formula as shown above.
DRP_new = $5000 * ($3298 / $5000) => $3298 (DFAS does this)
marital asset = $3298 *(4700 / 5000) => $2818.29 (Division order does this)
Notice the new law makes the DRP at the time of retirement become what the DRP was back at the
time of divorce. In other words, the litmus test is satisfied
that the marital retirement asset must be defined so
that whatever either party does after the divorce cannot make it go up
For division orders formalized after 23 Dec 2016, you'll use the new
definition of DRP (implicitly including one fraction) and have only the
2nd time coverture fraction explicitly named. If you want to
result while using the old definition of DRP (division orders
formalized 23 Dec 2016 and before - or orders that DFAS will not
calculate or pay), just spell out the second coverture fraction in the
marital asset = $5000 * (4700 / 5000) * ($3298 / $5000) => $2818.29
marital asset is exactly and precisely preserved, down to the
These results are all in 2016 dollars, and the marital asset goes up
proportional to military pay charts each year, and both parties benefit
from this same COLA bump-up.
If the text numbers are confusing to you and you'd rather see examples
presented with visual diagrams, please see the NDAA white paper showing
how the NDAA amendment (Dual Coverture method) affects the two spouses.
Correcting Bad Counsel on the Street - Falicy of "Based On" and
Some people say the promotion enhancement (move from $3298 to $5000 is “based on” early marital
work and therefore it IS a marital asset even though it occurs from
active effort outside the marriage. Do not confuse passive
enhancements such as interest in a bank account that cannot be
dispersed yet. Here we are talking about competitive,
effort-based earning activity that was done by only one party after the
divorce - plus the fact that the benefit doesn't fully vest for 3 years
after a promotion. The phrase “based on” is used by some to tap
an intentionally undefined phrase that is confusing and
manipulates court understanding one way or the other. In this
context “calculated from” is much more precise and legally meaningful.
In other contexts, try using "earned during" or "accrued during" --
which is probably what the divorce order says.
Much more is written critiquing the phrase “based on” in other papers
in the sister web page. For now, look at the divorce decree award
language and realize that the standard threshold for a marital asset
includes the phrase “earned during” or “accrued during”, not “based
on”. Two quick case studies: if after divorce an ex-spouse writes
a book “based on” the military marriage, are proceeds divided?
No. If a military pilot gets a commercial flight job after divorce
“based on” their military training and flight hours, is the civilian
retirement divided? No.
The other way I’ve seen the inequitable 51.6% windfall perverted is
citing a legal precedence awarding passively earned interest
after divorce as a marital asset, as using this as an argument to
earned enhancements. Not the same! In Michigan, the 2009 Skelly
Appellate court clarified that even an asset already received
is not a marital asset if additional post-divorce work
is required to keep it. By the way, this portends that Michigan
case law may be evolving toward no division of any
military retirement which requires more duty to secure it.
In any case, by implementing the Dual Coverture method, Congress has decided the "base on" argument is false.
Four specific confusions endure from material published in an
American Bar Association white paper signed in August 2016:
- The NDAA requirement indicates a DFAS percentage based method, as
shown on this web page and other documentation from increa.com web
pages. The NDAA is not a fixed benefit division and does not
fit the definition of a DFAS fixed-based method. This has BIG
- COLA is automatically awarded equally to both parties,
increases in military pay charts each year. The white paper
comes to an opposite conclusion. This may be because COLA is done
in a confusing way by the DFAS Hypothetical Method. In contrast,
the new NDAA
law uses equitable, equal, and automatic COLA for both parties!
- Avoid the promulgated falsehood that there are 4 DFAS acceptable
division methods. This confusion may come from the fact that DFAS'
Attorney Instructions gives 4 examples.
are only two acceptable DFAS types of division (nothing else) and they
are exclusive (cannot be both at the same time). See Under
Secretary of Defense Regulation DOD 7000.14-R vol 7B Chapter 29 Para
2906-01.C (page 29-12). In addition to clear statement in DOD
Regulation, a 2005 USFSPA Army
JAG tutorial makes this clear on page 11, paragraph IV.C.1.
In paragraph IV.C.2, the four DFAS examples are discussed and the
document "Attorney Instructions for Dividing Retired Pay and Sample
Court Order" is introduced. As of mid-2016, the Chief legal
counsel at DFAS explained that the Attorney Guide has been pulled from
circulation and requests are being directed to the foundational
regulation 7000.14-R behind it.
- The ABA takes a position that the Federal government has no
business invading into State divorce law ...while simultaneously
supporting the 1982 USFSPA law, which is the most invasive divorce law
on the books. It would be consistent to support Federal
intervention or not, but not
both sides of the issue.
Division Order Text
Using the new definition of DRP requires no special call-out in the
division order. After the law's date of enactment, it will happen
automatically when DFAS does the payment. Here is the actual text
you can put into a client's division order. The bolded numbers
must be customized.
former spouse is awarded a percentage of the member’s disposable
military retired pay, to be computed by multiplying 50% times a
fractions, the numerator of which is 168 mo, and the denominator of which is the total number of months of retirement
creditable service. If a Reserve retirement is
obtained, months = points/30.”
For division orders prior to the law's date of enactment or for orders
that will not be paid out by DFAS, here is the actual text you can put
into a client's division
order to mimic the behavior of the new law. The bolded numbers
must be customized. If you want
to know how to do that, see the sister web page.
Sample language for a court order is available from the sister page.
former spouse is awarded a percentage of the member’s military retired pay, to be computed by multiplying 50% times two
fractions, the first numerator of which is 168 mo, and the first
denominator of which is the total number of months of retirement
creditable service, and the second numerator is the base pay of a 14
year O-4 rank, and the second denominator is the base pay of the
years and rank upon retirement. Both base pay amounts are to be
taken from the 2009 year
military chart. If a Reserve retirement is
obtained, months = points/30.”
--- OR --- (combine two numerators ahead of time as shown in Area Method Practicum)
former spouse is awarded a percentage of the member’s military retired pay each month, to be computed by multiplying 50%
times a Coverture Fraction. The Coverture Fraction numerator is
1283191. The Coverture
Fraction denominator is member’s total
number of retirement duty months times basepay at time of
retirement. Basepay values for this formula will be looked up on
the 2009 year pay chart. If a
Reserve retirement is obtained, months = points/30."
For division orders that include duty time before marriage or more than
one marriage, a Dual Coverture method may be insufficient and you'll
need to use the complete Area Method.
- The new law is a DFAS percentage method that is not a DFAS fixed
cases where promotions happen after divorce, equity (as
defined by the Kilbride litmus test) is accomplished by a changed
definition of disposable retired pay, or by using a second coverture
fraction with the old definition of disposable retired pay.
- The new law is simple to implement and has none of the "doom and gloom" implications claimed by
Additional engagement opportunities:
primer of 2017 NDAA and USFSPA.
- DFAS instructions on what to submit under the new law.
- DoD Report to Committee on Armed Services of the US Senate and
House of Representatives, 2001. (Defense.gov,
pgs, 279kb pdf)
- Sullivan's Aug 2016 white paper gainst the 2017 NDAA amendment (americanbar.org,
- Rebuttal to Mark Sullivan's Aug 2016 hit piece against NDAA 2017.
- Rebuttal to Marshall Willick's piece against NDAA 2017.
- Rebuttal to Mark Sullivan's Feb 2017 hit piece against NDAA 2017.
of the 2017 NDAA law division formula.
- NDAA amendment to
USFSPA can help either spouse.
- PRE-NDAA2017 Excel spreadsheet for doing Dual
Coverture Value (Area Method) Calculations, September
2012. Includes court order legal language.
- POST-NDAA2017 Excel spreadsheet for doing Dual
Coverture Value (Area Method) Calculator, March 2017. Includes court order legal language.
shell of this document was created
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