Lancaster and St. Louis, PLLC

Schedule A Consultation Today

Lancaster and St. Louis, PLLC

Schedule A Consultation Today

A Fresh Approach To

Family Law In Cabarrus County

PERSONAL SERVICE | ACCESSIBLE

WHAT OUR CLIENTS SAY

“As a dad in a child custody case, I was very scared that I would not get enough parenting time with my young daughter. But, these two attorneys believed in me and helped me get a 50/50 week on/off schedule from the Judge for my daughter. Their hard work and determination blew me away, and I am forever grateful.” -F.

Read More

The attorneys at Lancaster and St. Louis are different than most attorneys — and we like it that way. Since our founding, we have been striving to provide a fresh approach to legal representation in Cabarrus County and the surrounding areas.

What does a fresh approach to legal representation mean? We implement practices that put clients at ease. We tailor our legal services to meet our clients’ individualized needs. Whether through flexible scheduling or direct access and communication with our attorneys, we are focused on providing the superior support and service our clients deserve.

A Fresh Approach To
Family Law In Cabarrus County

Personal Service | Accessible

A Fresh Approach To

Family Law In Cabarrus County

PERSONAL SERVICE | ACCESSIBLE

A Fresh Approach To
Family Law In Cabarrus County

Personal Service | Accessible

You Are Here:

  1. Home
  2.  » 
  3. Divorce
  4.  » How the new military retirement system impacts divorce law

In a previous post, we explored the process of military divorce in North Carolina. Today we will examine how a new military retirement program can affect families in the event of divorce.

Beginning January 1, 2018, the U.S. military is introducing a new retirement system—known as the Blended Retirement System (BRS)—which will apply to all military members who enlist on or after this date. In addition, active duty members who enlisted after January 1, 2006 will have the choice to opt in to this system.

The old system

Under the legacy military retirement system, military members with 20 years of service become eligible for retirement pay. For active duty members, retirement pay is calculated by taking the product of 2.5 percent and the number of years of service multiplied by the average of highest pay received over three consecutive years. For members of the Reserves of National Guard, this calculation is more complicated, but the 2.5 percent—which is the significant figure for our purposes—remains the same.

The new system

The BRS is comprised of two parts: defined benefit and defined contribution. For the defined benefit component, the calculation for determining retirement pay is the same as outlined above, except that the 2.5 percent is reduced to 2 percent. The trade-off for the lower benefit is the defined contribution component, which is a retirement savings plan similar to a 401(k). This plan includes contribution matching by the government.

There are two other new payment options under the BRS:

  • Mid-career military personnel can receive continuation pay—monthly pay raises ranging from 0.5 to 13 times their regular pay—in exchange for agreeing to serve three additional years.
  • Military members who have become eligible for retirement pay but have not yet reached the age of Social Security payment eligibility can collect a lump sum payment of 25 or 50 percent of their monthly pension payments.

Implications for divorce

The new BRS could majorly affect divorcing military couples. The change in payment calculation from 2.5 to 2 percent can translate into a difference of 50 percent to 40 percent of base pay. This difference can make a big difference in the amount a divorcing partner receives. Additionally, how will continuation pay be handled in a divorce? If the payment comes at the time of the divorce, for instance, is it considered marital property (because of the years of marital service that were required for eligibility) or non-marital property (because of the future service commitment required to receive it)? Finally, if a military member takes the lump sum payment, the ex-spouse will receive lower payment. What legal safeguards are in place to recoup these funds? These questions should be thoroughly explored with your divorce attorney.