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Other Retirement Assets
In addition to Individual Retirement Plans (IRAs) and 401(k)s, there are several other types of retirement and pension plans that may be subject to equitable division during a divorce in Georgia. Several of the more common retirement plans are discussed below. However, as the types of plans vary from employer to employer and because certain retirement plans may have special qualifications it is imperative for any individual considering divorce to consult with a qualified divorce attorney who is knowledgeable and experienced in the area of asset division.
Federal Retirement Plans
There are three main federal retirement plans, the Thrift Savings Plan (TSP), the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS). Similar to IRAs, these plans are not divisible via a Qualified Domestic Relations Order (QDRO). Although these plans are not divisible via a QDRO, they are divisible upon divorce by other means.
Thrift Savings Plans – Thrift Savings Plans may not be divided by a QDRO upon divorce. However, a TSP may be divided upon divorce via aqualifying retirement benefits court order or a Court Order Acceptable for Processing (COAP). See 5 C.F.R. § 1653 and 5 U.S.C.A. §§ 8435(c) and 8467. In order for a court order purporting to divide a TSP in divorce to be valid and effective, the order must meet the following requirements:
- It must be issued by a court in any of the 50 United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, or the Virgin Islands, or by any Indian court as defined by 25 U.S.C. § 1301(3).
- It must expressly relate to the TSP. This means that it mustspecifically contain the name “Thrift Savings Plan.”Terms such as “all retirement benefits,” “Government benefits,” “Federal retirement benefits,” “Thrift Savings,” or “Thrift Savings Account” are notadequate.
- If the court order requires a payment from a TSP account, it must clearly describe the payee’s entitlement. It can only award a specified dollar amount or a fraction or a percentage of the participant’s account as of a specific past or current date.
- A court order can require a payment only to the participant’s current or former spouse or to the participant’s dependents. Furthermore, the TSP will not honor a court order asking for a single payment to be made jointly (for example, $10,000 to be divided among the former spouse and dependents). The court order must separately specify the dollar amount, percentage, or fraction of the award made to each person.
5 C.F.R. § 1653.2.
Federal Employees Retirement System and the Civil Service Retirement System Plans – Similar to TSPs, CSRS and FERS plans also may not be divided via a QDRO. But, these plans may be divided via Court Orders Acceptable for Processing (COAP). The provisions of federal law that govern the division of CSRS and FERS benefits may be found in 5 U.S.C.A. §§ 8341, 8342, 8345, 8346, 8401, 8424, 8445, 8467, and 8470 and 5 C.F.R. § 838. These sections of the above cited statutes contain requirements, directions and extensive model language that attorneys or self-represented parties should consult and use in preparing court orders dividing CSRS and FERS benefit plans. More information regarding the division of these federal plans may be found by consulting the Office of Personnel Managements pamphlet entitled “Court-ordered Benefits for Former Spouses,” or by consulting with a Georgia divorce attorney with extensive knowledge concerning the division of federal retirement plans.
Military Retired Pay is subject to equitable division upon divorce in Georgia similar to other private and government administered retirement plans. Stumpf v. Stumpf, 249 Ga. 759 (1982). Georgia derives the authority to divide military retired pay upon divorce from the Uniform Services Former Spouse Protection Act (USFSPA). 10 U.S.C.A. § 1408(c).Unlike certain retirement plans like 401(k)s, Military Retired Pay may not be divided with a QDRO, but may be divided via a Military Pension Division Order (MPDO). There are a series of requirements that must be met and several considerations that must be made prior to successfully dividing military retired pay upon divorce in Georgia. For more information concerning the equitable division of military retired pay in Georgia, see our article addressing military retired pay specifically, “Military Retired Pay.”
Teacher Retirement Plan
Teacher retirement plans administered by the Teacher Retirement System (TRS) of Georgia are not impacted by a divorce decree. More specifically, TRS accounts are not subject to QDROs and funds held in TRS accounts are not subject to levy, garnishment, or attachment, and a TRS member cannot assign his or her benefits O.C.G.A. § 47-3-28. Although a TRS account may not be divided subject to a divorce decree, the holder of a TRS account may privately agree to the division of his or her account. However, any payment made pursuant to a private agreement must be handled by the holder of the account directly after payment is made to him or her by TRS, as TRS will only make payments to the holder of the account. See O.C.G.A. § 47-3-128.
Other Potentially Non-divisible Plans
As set out above, there are several retirement plans that are not subject to division via a QDRO, but are nonetheless subject to equitable division upon divorce. In addition to these plans, there are some retirement plans that are simply not subject to division upon divorce regardless of the method of division. Generally, the retirement plans that are not subject to division upon divorce are non-qualified retirement plans that contain the following terms in their names:
- Excess Benefit
These plans are not divisible by QDRO or any other Domestic Relations Order, because the plans contain provisions that prevent them from making payments to anyone other than the employee. Investigate the plan prior to agreeing to the division of a specific retirement asset. If it is discovered that the retirement account is not subject to division, the only likely solution may be to have the employee spouse – or the spouse who owns the retirement asset to make payments to the recipient spouse if and when he or she receives disbursements from the plan. This may be structured as alimony for tax purposes. For more information regarding alimony and the potential benefits of classifying payments from one former spouse to another as alimony, see our articles concerning alimony in Georgia.