Division of Military Retirement Pay - Coverture Value Method

© 2014 Brian Mork, Ph.D. [Rev 1.6]

HomeSite IndexWikiBlog rss-feed

Tweet

military-member

Abstract

This document presents the Dual Coverture Value (DCV) method of dividing a military retirement upon divorce.  .  Original research has revealed the DCV method accomplishes the same division as previous standard methods, yet is much simpler.  DCV also applies to a much wider scope of situations which were previously impossible. It works for Active Duty or Reserve, and any combination of marriage before or after military duty - even multiple marriages. It also properly handles marriage and work spanning January 28, 2008 (Reserve retirement pay before age 60).  No other method can do all of this with equity.  DCV is unique and can save significant litigation costs because the simplicity and clarity lend toward equitable mediation.

This page includes a lot of mathematics and numbers.  Another web page gives practical information about using DCV in the legal system.

Introduction

Divorce is a path many people have to live with, and under these situations, USFSPA laws allows military retirement benefits to be divided as a present day asset rather than future income.  Doing so often manifests in a divorce order that says the spouse is awarded nominally 50% of the "military retirement earned during the marriage." You can not believe how unecessarily twisted and complicated it has gotten to actually describe what portion was earned during the marriage.  The stakes are large!  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 (local copy) than men.  Among enlisted, the military women divorce rate is about 3x that of men.  The overall military divorce rate in 2011 is 64% higher (local copy) than it was in 2001. Military divorce is a significant social issue affecting both sexes. 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 (20 yr E-7, or 30 yr O-8, living until age 75).

The DCV method discussed on this page addresses how to actually describe what part of a military retirement is divisible as a marital asset.  This is applicable to Active Duty and Reserve military retirements.  If you are intested in Reserve military specific issues, please also see another web page about dividing military reserve retirement pay.  Other web pages deal with law and statutes, promotion enhancements, and dual coverture.

Discovery

My Ph.D. degree taught me to handle data and numbers with fidelity, and to provide defensible answers that represent truth.  My aerospace flight test engineering work involves using data and metrics to create & test models of the real world on which people's lives depend.  Mathematical tools are used to monitor, verify, and predict the real world. 

I developed the Dual Coverture Value (DCV) model of military retirements that allows easy math to divide this marital asset in the case of divorce.  Division methods have accumulated since the 1982 USFSPA laws and a 1998 Department of Defense Report to Congress regarding the functionality of USFSPA laws.  Spouses, attorneys, and judges have struggled to understand a difficult retirement system and have grappled with equitable division through lengthy, repeated, and narrowly scoped litigation.

The new DCV model offers a better way!  DCV is a family of division formulas that are able to lucidly and simply duplicate the complicated DFAS methods that exist for both Reserve and Active Duty retirements.  At the same time, new capability allows the DCV methods to divide military retirement assets in marriage situations that DFAS methods simply cannot do. DCV even can do multiple ex-spouses rather than the inequitable "first come first serve" method DFAS is currently limited to (see "Maximum Percentage" paragraph in a summer 2000 article published in General Practice, Solo & Small Firm Division magazine.)

I have documented the DCV methods in a white paper and publicly accessible web pages. Over the last few years, I have had the opportunity to consult for attorneys and clients going through divorce, and DCV has proved to be particularly useful in arbitration and mediation because it is so lucid that it removes the desire to litigate. I am looking for professional review from the legal community, and partners to publish DCV in Family Law journals.  I want to build a consortium of sponsors to submit DCV to DFAS for formal sponsorship and publication.

 Comparison of Methods

When dealing with future disbursed civilian retirements, a coverture fraction method typically calculates what portion of a retirement was earned during the marriage and is a marital asset.  The marital asset portion is then divided like other assets. This is a core concept: although a military retirement can be treated as a marital asset, most times only some of the military retirement is a marital asset.  Quantitatively describing the marital portion is the key to all division methods.  The marital portion is usually expressed as a fraction or percentage (not a dollar value) because the size of the retirement paycheck changes each year based on changing military salaries:

Ex-spouse monthly payment =  Share Fraction * Marital Fraction  * Changing Military Retirement Pay

The goal is to determine the Marital or Coverture Fraction, multiply by the Share Fraction (often 50%), then document the percentage number in a court order.  Each month, DFAS will multiply that percentage by the retirement pay and determine the ex-spousal payment. A hierarchical diagram of all methods is given below. It helps to understand that the purpose of any method is to simply generate a marital fraction. After all the effort is said and done, creating the percentage number is the entire point of all the methods except the fixed dollar method. 

Some authors, such as Mark Sullivan in his "Silent Partner" series, misrepresent this issue.  For example, on Page 7 of his "Military Pension Division: The Servicemember's Strategy" edition, he states, "There are four separate ways to make the division that DFAS will accept."  This is not true.

Sullivan fixates on Fixed Dollar, Percentage Clause, Formula, and Hypothetical because the DFAS  document "Guidance on Dividing Military Retired Pay" (see references at the bottom of this webpage) offers these four examples.  Examples do NOT define acceptable division methods.  In fact, there are only TWO acceptable division methods for DFAS: Fixed Dollar or Calculable Percentage.  Either you give them a dollar amount, a percentage amount, or you tell them how to calculate a percentage amount when the military member retires. Sullivan's writing and legal document templates are often used in court, so it's important to drive this issue to completion and replace Sullivan's confusion.  There are TWO acceptable ways to express a division to DFAS, and any calculation or process or method providing one of those to ways is acceptable. If there is any doubt, you may reference USFSPA 10 USC 1408(a)(2)(c) directly:

"[A court order,] in the case of a division of property, specifically provides for the payment of an amount, expressed in dollars or as a percentage of disposable retired pay, from the disposable retired pay of a member to the spouse or former spouse of that member." (underline added)

The DFAS examples of Percentage Clause, Formula, and Hypothetical Method are simply different examples of how to calculate a percentage.  Anything that gives DFAS a way to calculate a percentage is acceptable. This concept is diagrammed below:

method-tree

The red equal sign is meant to indicate that the Dual Coverture and Hypothetical methods yield the same percentage if one stipulates that COLA is the same as military pay raises each year.  Much more documentation is available from the Mork white paper listed in the references below.

A tabular comparison of method features is given below.

Method of Division --->
Dual Coverture Value
Dual Coverture
DFAS Hypothetical Method
Civilian Single Coverture Fraction *
Time-value of money given after payments start?
Both receive military pay raises.
Both receive military pay raises. Both receive military pay raises. Both receive military pay raises.
Time-value of money after divorce, but before before payments start?
Both receive military pay raises.
Both receive military pay raises.
Spouses treated differently - military receives military pay raises; ex-spouse receives COLA
Both receive military pay raises.
Requires attorney hand-calculation of COLA and hypothetical "High-3" basepay? No No Yes No
Post-marriage merit promotion enhancements belong only to military member, per DoD report to Congress? Yes

Yes
Yes
No
Able to set aside asset value pre-existing the marriage? Yes
No
No
No
Handles division for multiple spouses?
Yes
No
No
No

* Although civilian methods are inappropriate for dividing a military retirement, this column is included in the table because some attorneys continue to promote this method for all situations.  This behavior damages military members with lack of equity.  The single coverture method is not correct unless there were no military promotions before or after the marriage.  For details, see another web page titled "Division of Military Retirement Pay - Promotion Enhancement".  Resources there give a point by point rebuttal to the civilian method; continuing to use it when it's documented to be inferior and inequitable is inexplicable.

Only the Dual Coverture Value method allows proper handling of military duty and promotions that existed as a pre-marriage asset.  Like a car or dining room table pre-existing the marriage, pre-existing assets are not divisible.  Pre-existing retirement asset value can be quantitatively separated and does not comingle with the rest of the retirement.  Only the Dual Coverture Value method can do this. Additionally, when more than one spouse is involved, only the Dual Coverture Value method can properly divide a military asset among multiple spouses and the military member.

Dual Coverture Value Method

For both Reserve and Active Duty retirements, the value of a military retirement can be calculated by multiplying the number of duty points times the value per point.  For a Reservist, retirement points are slightly different but universally used to divide retirements.  Consider a militarily member applying for a Reserve retirement with retirement points each worth 47 cents from the Federally mandated retirement formula "2.5% x retirementbasepay / 360".  For Active Duty, retirement points come from duty days, accumulated at 365 per year, so the formula for point value is "2.5% x retirementbasepay / 365".  You can multiply the point value by the total number of points at retirement to determine how big the gross retirement paycheck is going to be.  In the diagram below the total monthly retirement payment would be 47.5¢ x 5415 points, or $2572.13.  The area of any part of the diagram represents asset value.

Dual Coverture Value

The diagram shows that the military member had 280 duty points when they married.  They had 3894 points when divorced, and military member earned 5415 points as of retirement.  Visually, the two vertical bars toward the left of the diagram may help you visualize one point.  Showing 5415 of these divisions across the page is too confusing, so the individual point columns are merged together and shown as areas instead of thousands of vertical lines.

The vertical extent of each point, hence the vertical extent of each area, is set by military promotions.  For this hypothetical example, based on when duty and promotion enhancement occurred, consider when each portion of the 47 cent value of a point was earned.   In the diagram, each point is worth 14.7¢ calculated from the military rank when married, 35.0¢ when divorced, and 47.5¢ when retired.  In other words, 14.7¢ of the point value was earned before the marriage, 20.3¢ was earned during the marriage, and 12.5¢ earned after the marriage.  Because the numerically precise and quantifiable nature of a military retirement allows such calculations, there is no comingling.  It is important to understand that all three values are looked up on the SAME paychart.  Do not look up the earlier values using earlier pay charts. Use the same year paychart to find basepay of the different ranks and different times, and turn this into point value using the Federal formulas listed above.

Consider the three separate, non-comingled phases of the military career in the example.  Value is represented by the area of the diagram:
  1. Before Marriage. Dotted area. The 14.7¢ cents of value earned before the marriage is not a marriage asset.  It pre-existed the marriage and because of this, it is not a marital asset according to state law in almost every state of the union.  The 14.7¢ value is quantifiably separate, and is not co-mingled like a bank account brought into marriage.  During court divorce proceedings during deposition or discovery, each party lists bank accounts and assets.  During this time, it is appropriate to note "14.7¢ cents per point of military retirement asset" was earned before the marriage, and is quantifiably separable, and is not co-mingled with anything during later years, and is not a marital asset.  This is identical to listing a car or motorycle or dining room table you owned before the marriage, and having those items exempt from division.
  2. During Marriage. White area. Few people debate that the 20.3¢ should be divided because the two parties were married during these years. Typically the ex-spouse portion of this asset would be assigned by the court at 50%.
  3. After Marriage. Cross-hatched area. Duty points and promotions earned after marriage are not passively earned like interest on a bank account or time-value of money or dividends of a 401(k) type retirement. Case law sometimes allow civilian passively-earned enhancements after a marriage to be divided when the receiving party has to wait to get the money.  Dividing passively-earned enhancements may be appropriate because the person will collect the marital asset capital and the interest earned on that capital. However, military duty and promotions are actively earned enhancements based on effort, schooling, study, and testing. They are not passively earned like bank interest; they are earned by work and effort. Done after marriage, this effort is not shared by an ex-spouse. The 12.5¢ cents of enhanced retirement value earned after the marriage are not a marital asset and should not be divided.
If you want to try numbers specific to your situation, download the Dual Coverture Value Calculator spreadsheet from the references section below

To divide assets, there are multiple sequential steps a court must do. If any one of these steps are skipped, court orders are susceptable to successful appeal, assuming proper documentation was submitted during the original court action. Here are the steps:
  1. Determine if something is a marital asset. USFSPA allows, but does not direct, a court to consider military retirement as a marital asset. However, all portions of a military retirement are not marital assets unless all of the military career was during the marriage.
  2. Determine asset values as of some date.  This is typically the date of separation, the date of filing divorce, or the date of final divorce order.  Specificity and precision of military retirement formulas makes this easy.
  3. Decide how to divide the asset. Many courts go with 50:50. Sometimes there are legitimate reasons to deviate from this, but it's usually an uphill battle to argue against 50:50.
Retirement value portions actively earned outside the marriage that are quantifiably separate do not get past the first step.

Formula and Legal Language


You should download the document "Division of Reserve Military Retirements" from the resources below.  Much more detail and specific calculation examples are in that document.  What follows is a brief summary.

The Dual Coverture Value (DCV) coverture fraction is calculated by diving the value of the white portion area of the above diagram by the total area value.  It's that simple!  No other pre-existing method is anywhere close to this level of simplicity.  William Troyan, of Troyan, Inc writes that the New Jersey appellate court decision to use Dual Coverture makes the preparation of division orders substantially more complex.  I would disagree: DCV methods are simple!  It's just that nobody prior has envisioned and communicated the simple "before-during-after" area diagram displayed above.

The area of the white area does not change later in life based on the military members actions.  No matter how much additional duty is done, it never dilutes in value.  If promotions occur, other parts of the diagram become larger, but the marital asset portion does not become larger or smaller.  However, portion of the chart do become larger if there are military pay chart increases.  Also, if a military person does not ever retire, then nobody gets any retirement, and in the words of one appellate court, "awarding 50% of nothing is not in error."  The only other option would be to enslave the military person by forcing them to continue enlistement until retirement, or try to obligate non-military retirement, which would be out of scope of UFSPA and earned outside the window of marriage.

The DCV coverture fraction describes what portion of the total monthly retirement pay is a marital asset by dividing the white portion area of the diagram by the total area:

C = ( DDVD-DMVM ) / DRVR
C = (3894 * 35 - 280 * 14.7) / (5415 * 47.5)
C = 0.5139

C is the coverture fraction
D is the duty point count at marriage, divorce, or retirement (according to the subscript)
V is the value of a point at marriage, divorce, or retirement (according to the subscript)

Multiply the coverture fraction by the disposable retirement monthly payment, and you will have the marital asset. The non-military spouse is typically awarded 50% of the marital asset.

If there was no duty before marriage, on the diagram above there would be no "Before" area and the marriage values DM and VM are zero, and the formula from the Dual Coverture Value method simplifies to the Dual Coverture method showing a ratio of duty points and a ratio of rank value. This Dual Coverture method is the one that gives the same mathematical result as the DFAS Hypothetical Method if one stipulates that COLA raises each year are the same as military pay raises each year.

C = ( DDVD ) / DRVR

C = ( DD/DR ) * ( VD/VR )

In a similar manner, if there are no promotions involved (VD = VR), the formula simplies to the single coverture fraction that the legal system has used for years:

C = ( DD/DR )

Notice that the Dual Coverture Value method may always be used because the math formula automatically simplifies to handle the more simple cases.  For this reason, it should always be used because nobody can predict if promotions or additional marriages will happen in the future, necessitating a revisit to the court if the other limited methods were used.

The legal language to implement the Dual Coverture Value method for military duty both before and after a single marriage is given here (replace all the bolded values with YOUR values).  This is the textual equivalent of dividing the white area by the total area, creating the coverture fraction.  Without promotions, or with other spouses, the exact text may change, but the idea remains: simply describe the area that is a marital asset, and divide it by the total area.

“The former spouse is awarded a percentage of the member’s disposable military retired pay each month, to be computed by multiplying 50% times a Coverture Fraction. The Coverture Fraction numerator is (3894 points times basepay of W3@15yr) minus (280 points times basepay of E5<2 yr).  The Coverture Fraction denominator is member’s total number of reserve retirement points earned times basepay upon retirement.  All basepay values will be looked up on the 2012 year pay chart."

Notice you can use basepay instead of point value to make the calculation simpler for DFAS because if you did all the "divide by 360" and 2.5% numbers, the effect cancels anyhow when it's in both the numerator and denominator.  In my opinion, it’s easier to write the same thing with the math formula, which is better than trying to describe math with English sentences:

“The former spouse is awarded a percentage of the member’s disposable military retired pay, to be computed by multiplying 50% times a Coverture Fraction.  The coverture fraction is
 
C = (3894 * 5040.6 - 280 * 2116.80)/(DRBPR)
where DR is number of retirement points earned, and BPR is retirement basepay.  For this calculation, basepay values will be looked up on the 2012 year pay chart.”

Using the numbers from the continuing example, C = (3894 * 5040.6 - 280 * 2116.8) / (5415 * 6840) = 0.5139 (matches above).  The marital asset is 51.39% of the retirement net disposable amount.  Spousal portion would be 50% of that or, 25.70%.

Besides dividing each monthly payment, don't forget if you are working with a Reserve retirement with a marriage and duty spanning 28 January 2008, some or all of the monthly retirement payments before military member age 60 may not be marital assets; they must be divided with a different coverture fraction. See the 3-D Value section, the document "Division of Reserve and Active Duty Military Retirements" from the references below, and the web page "Attorney Guide Dividing Military Reserve Pay". The Dual Coverture Value method described in this document is a 2-dimensional method.  If Reserve retirement before age 60 is involved in your situation, please contact me and I'll describe to you the extended 3-dimensional method.

Summarizing, the DCV method is done with these steps with your attourney, and then submit the words from Step 7 and Step 8 as part of the division order:
  1. Write down the points for each transition of life (start military, marriage, divorce, retirements), accurate down to the day.  During Active Duty, it’s one point per day.  Reserve points can be obtained from a Reserve Point Summary Statement.
  2. Look up military monthly base pay on a pay chart, using longevity and rank of the military person at each transition of life.  It is important to use the same paychart, not any specific year pay chart.  It is often convenient to use the year of divorce since that’s when everybody is looking at the issue.
  3. Convert paychart base pay to point values.  Divide by 360 and multiply by 2.5%. These numbers should come out  approximately 20¢ to 80¢.
  4. Draw the DCV area diagram.
  5. Write down how to calculate the marriage portion of the diagram, by looking at the DCV area diagram.  All the numbers should be known, because this will be based only on present day or history.
  6. Write down how to calculate the total area of the DCV area diagram.  This may contain numbers you don’t know yet such as total retirement points.
  7. Write down the words to divide the marriage portion by the total portion. You should get a fraction 0.0 to 1.0, which is the coverture fraction.
  8. The division order language will be 50% times the coverture fraction times the monthly disposable retirement pay.  On rare occasions, something other 50% may be used if the marital asset is not divided equally.

Iconic Simplicity

The DCV method of diagraming phases of life and the divisibility of retirement earned during those phases of life is so lucid and simple that the patterns can be reduced to essentially icons. The horizontal axes represents time moving from left to right across the bottom of the icons. The vertical axes represents the value of each point, dependent on promotions.  Remember, the specific dollar amount corresponding to any area goes up each year as the military base pay goes up.

In each diagram below, the white portion would be the divisible marital asset, while the dotted portion would not be divisible.  The coverture fraction is calculated by dividing the white area by the total area.  The exact point counts and point values that apply for a given case would be used to calculate the areas.

The legal division order language would simply describe how to calculate the white area divided by the total area.  Remember, horizontal divisions (vertical lines) are point counts at that moment in life, and vertical divisions (horizontal lines) are point values (2.5% * basepay / 360) for whatever rank.

Icon Picture
Description of Life
Formula calculating white marital portion Coverture Fraction (C). *
married entire This diagram represents becoming 1) married, 2) military, 3) retired, 4) divorced. In other words, the entire military career was shared with the same spouse. No coverture fraction is required.  Non-military spouse receives nominally half of the disposable monthly retirement payment.
C = 1.0
married divorced no promotions This diagram represents becoming 1) married, 2) military, duty with or without promotions, 3) divorced, duty without promotions, 4) retired. Because there are no promotions after the marriage, this can be handled like civilian retirements with a single coverture fraction. 
C = DD/DR
military married promoted
This diagram represents becoming 1) military, 2) married, duty and promotions, 3) retired, 4) divorced.
C = (DRVR-DMVM)/(DRVR)
married mil retired
This diagram represents becoming 1) married, 2) military, duty with or without promotions, 3) divorced, duty with promotions, 4) retired.  In this situation, the Dual Coverture Value method simplies to the Dual Coverture method.  This will give the same result as the DFAS Hypothetical method if you stipulate that military pay raises are the same as COLA.
C = (DDVD)/(DRVR)
military married
This diagram represents becoming 1) military, duty with or without promotions, 2) married, duty without promotions, 3) divorced, no more duty or promotions, 4) retired.
C = (DD-DM)/DR
military married military
This diagram represents becoming 1) military, duty with or without promotions, 2) married, duty and promotions, 3) divorced, duty and promotions, 4) retired.
C = (DDVD-DMVM)/(DRVR)
married mil married2 mil
This diagram represents becoming 1) married #1, 2) military, duty with or without promotions, 3) divorced, duty and promotions, married #2, 4) married, duty without promotions, 5)divorced, 6) retired.
C1 = (DD1VD1)/(DRVR)

C2 = (DD2VD2-DM2VM2)/(DRVR)

* The symbols and subscripts in the third column are defined earlier on this web page.

Comparison to DFAS Methods

In the Fall 2012 newsletter of the ABA Family Law Military Committee, Amy Privette, a previous paralegal for Mark Sullivan, wrote an article titled "Quick Tips for Handling Military Retirement Benefits". She echoed her mentor's errors by identifying four DFAS methods of dividing military pay: fixed dollar, percentage, formula, and hypothetical award.  These correspond to Sections IV(A), IV(C), and IV(D) of DFAS document titled "Guidance on Dividing Military Retired Pay."

Privette stated that award formulas had to be stated one of these four ways to be acceptable to DFAS.  In fact, there are only two (2) acceptable types for DFAS, while DFAS gave four (4) examples.  Confusion like this pervades the area of military retirements asset division. Quoting paragraph IV(A) from the DFAS document, "The USFSPA states that for a retired pay as property award to be enforceable, it must be expressed either as a fixed dollar amount or as a percentage of disposable retired pay."  Notice this quote identifies 2 options (fixed or percentage), not 4.  Although the DFAS document is only guidance for attorneys, DFAS' footnote references the regulatory authority referenced earlier on this webpage.

It is critical to realize that the DFAS "formula" or "hypothetical methods" calculate a percentage and therefore fit into the second type.  See the green hierarchy diagram above. More revealing is the fact that ANY method that creates a fraction percentage is acceptable to DFAS, so long as the fraction is directly stated, or is possible for DFAS to calculate. In DFAS' words, "If a court order provides a formula award and also provides all the variables necessary to compute the formula, we will complete the calculation as is [sic] using those variables provided in the order."  If the fraction or percentage from two different methods is the same, then any two methods are the same.  This appears in the hierarchy diagram above with the red equal sign. How you got to the fraction just doesn't matter to DFAS.

All Dual Coverture methods create fractions and can be calculated by DFAS. It is instructional to take each of the DFAS proposed methods of creating fractions and correlate them to the much simpler Dual Coverture Value method of creating the same fraction. 

Method in DFAS published guidance
Simpler DCV Formula giving the same fraction.
Fixed Dollar
percentage calculation not required
Named Percentage
percentage calculation not required (just state it).
Formula Example 2
C = DD/DR
Formula Example 3
C = DD/DR
Hypothetical Example 4 & 7
C = (DDVD)/(DRVR)
Hypothetical Example 5 & 8
C = (DDVD)/(DRVR)
Hypothetical Example 6 & 9
C = (DDVD)/(DRVR)




3-Dimensional Value

The Dual Coverture Value method diagrammed above is a 2-dimensional (visualized with areas) method.  If you are dealing with a Reserve (not Active Duty) retirement and military duty spanning January 28, 2008, there is one more extension to the 2-dimensional method you must consider.  Visualize the "before-marriage-after" diagram or one of the 7 iconified diagrams above as a monthly slice of income. In your mind, turn the diagram sideways and stack each successive month of retirement pay on top of prior months and you'll build a 3-dimensional stack of the area diagrams, or a stack of monthly payments. The volume of this stack represents the accumulated value of military retirement rather than a single monthly payment.

Traditionally, the stack starts when the military member turns 60 years of age because that's when a Reserve retirement begins to pay out.  However, 10 USC 12731(f)(2)(A) created a new and quantifiably separate retirement for Reservists that does not comingle in any way with the traditional retirement.  For more detailed reading see the Reservist retirement division web page. The new law clearly and quantifiably authorizes the receipt of retirement pay before age 60 dependent only on military duty done January 28th, 2008 and after.  As a result of this law, the "stack" of monthly payments may begin prior to military member age 60.  The coverture fraction that applies to each slice of the stack may be different before and after military member age 60 based on when the marriage occured compared to January 28th.  There is no commingling of the old and the new retirement benefit; it is proper to divide each with its own coverture fraction as a separate asset.

Three conditions could exist.
  1. If a marriage exists only after January 28th, 2008, then all monthly slices are to be divided the same way as described above.
  2. If a marriage ends before January 28th, the ex-spouse in no way contributes to the retirement points accumulated after January 28th, which month-for-month dictate how many months prior to age 60 retirement pay is started. Getting these extra months of pay is based only on duty after January 28th. Under this second condition, the payments before age 60 would have a coverture fraction of zero -- in otherwords, the non-military spouse would receive no portion of the payments before age 60 because the spouse in no way contributed to the duty points causing the payments. In this situation, the asset division order must explicitly tell DFAS to not divide payments before age 60, and divide payments like normal after age 60.
  3. If the marriage spans January 28th, then the payments age 60 and following should be divided with a coverture fraction as described in all the paragraphs above.  For payments before age 60, a new area value diagram must be created using only points after January 28th.  The horizontal axes of the second diagram would include points ONLY earned after January 28th.  The vertical axes would start with point value as of January 28th and show only promotions after that date.  This second area value diagram would yield a second coverture fraction to apply for all payments before age 60.  DFAS must be provided with both coverture fractions and directed to use one before age 60 and the other for age 60 and following.

Damages

The resultant damages of doing military division with a single (civilian) coverture when it should be a dual coverture (military promotions) are significant.  If someone divorced as a Major and retired as a Colonel, the 2013 pay chart shows a 34.4% increase in retirement (proportional to base pay) due only to the rank change attained after marriage.  Other situations would be higher or lower. Because the 34% mistake would comes from the military member to the non-military member, that creates a double, or 68% average, error in equity.  This is much larger than other differences judged to be significant by courts, including the 15% rule of thumb on income changes to change support payments, or the 5% threshold where medical insurance would be ordered for a supported child.  Over a 20 year retirement, this would accumulate a $878,481 mistake in marital asset value.  Multiply this error by the number of military in the nation and the number of divorces, and you'll see that this is a $Billion dollar issue that needs the lucid, equitable clarity of the Dual Coverture Value method.

References

  1. Mork white paper: Attorney Instructions - Division of Reserve and Active Duty Military Retirements (increa copy).
  2. DFAS "Guidance on Dividing Military Retired Pay", April 2012, 20 pgs, 119 KB pdf. (DFAS.mil, increa copy)
  3. DFAS "Attorney Instructions - Dividing Military Retired Pay", April 2001, 19 pgs, 74kb pdf. (DFAS.mil, increa copy).
  4. DoD Report to Committee on Armed Services of the US Senate and House of Representatives, 1998. (Defense.gov, increa copy) (84 pgs, 279kb pdf)
  5. Blog post Dual Coverture is better than DFAS Hypothetical Method, February 2011.
  6. DCV Does Simple Division Orders--reply to William Troyan.
  7. Excel spreadsheet for doing Dual Coverture Value Calculator spreadsheet, September 2012.
  8. "Female GIs struggle with higher rate of divorce", March 2011. (militarytimes.com, increa copy)
  9. "Air Force divorce rate highest in military", December 2011. (militarytimes.com, increa copy).
  10. "Be Specific in Divorce Agreements to Avoid Future Legal Trouble", March 2011, (airforcetimes.com, increa copy).

Valid HTML 4.01 Transitional


This document was edited using Kompozer. © 2014 Brian Mork, Ph.D.