Appendix B - Appendix B to Subpart J of Part 838—Guidelines for Interpreting State Court Orders Awarding Survivor Annuity Benefits to Former Spouses
These guidelines explain the interpretation that the Office of Personnel Management (OPM) will place on terms and phrases frequently used in awarding survivor benefits. These guidelines are intended not only for the use of OPM, but also for the legal community as a whole, with the hope that by informing attorneys, in advance, about the manner in which OPM will interpret terms written into court orders, the resulting orders will be more carefully drafted, using the proper language to accomplish the aims of the court.
I. Insurable Interest AnnuitiesTwo types of potential survivor annuities may be provided by retiring employees to cover former spouses. Section 8341(h) of title 5, United States Code, provides for “former spouse annuities.” Section 8339(k) of title 5, United States Code, provides for “insurable interest annuities.” These are distinct benefits, each with its own advantages.
A. OPM will enforce State court orders to provide section 8341(h) annuities. These annuities are less expensive and have fewer restrictions than insurable interest annuities but the former spouse's interest will automatically terminate upon remarriage before age 55. To provide a section 8341(h) annuity, the order must use terms such as “former spouse annuity,” “section 8341(h) annuity,” or “survivor annuity.”
B. OPM will not enforce State court orders to provide “insurable interest annuities” under section 8339(k). These annuities may only be elected at the time of retirement by a retiring employee who is not retiring under the disability provision of the law and who is in good health. The retiree may also elect to cancel the insurable interest annuity to provide a survivor annuity for a spouse acquired after retirement. The parties might seek to provide this type of annuity interest if the non-employee spouse expects to remarry before age 55, if the employee expects to remarry a younger second spouse before retirement, or if another former spouse has already been awarded a section 8341(h) annuity. However, the State court will have to provide its own remedy if the employee is not eligible for or does not make the election. OPM will not enforce the order. Language including the words “insurable interest” or referring to section 8339(k) will be interpreted as providing for this type of survivor benefit.
C. In orders which contain internal contradictions about the type of annuity, such as “insurable interest annuity under section 8341(h),” the section reference will control.
II. Orders Directed at Other Retirement SystemsA. Except as provided in paragraphs A1 and A2, orders directed at other retirement systems will not be interpreted as affecting Civil Service Retirement System (CSRS) benefits.
1. Orders that mistakenly label CSRS benefits as Federal Employee's Retirement System (FERS) benefits, will be interpreted as affecting CSRS benefits and vice versa.
2. Unless the order expressly provides otherwise, for employees transferring to FERS, orders directed at CSRS benefits will be interpreted as applying to the entire FERS basic benefit, including the CSRS component, if any.
B. Orders directed at other Federal retirement systems such as military retired pay, Foreign Service retirement benefits and Central Intelligence Agency retirement benefits will not be interpreted as awarding a former spouse annuity under CSRS. Thus, orders should contain language identifying the retirement system from which survivor benefits are being awarded. For example, orders should contain terms such as “CSRS,” “OPM,” “Federal Government employee survivor benefits,” or “survivor benefits payable based on service with the U. S. Department of Agriculture,” etc.
C. Orders affecting military retired pay, even when military retired pay has been waived for inclusion in CSRS annuities, will not be interpreted as awarding a former spouse annuity under CSRS.
III. Specificity Required To Award a Former Spouse Annuity.A. Orders must contain language identifying the benefits affected. For example, “CSRS,” “OPM,” or “Federal Government” survivor benefits, or “survivor benefits payable based on service with the U.S. Department of Agriculture,” etc., will be considered sufficient identification.
B. 1. Except as provided paragraphs B2 through B4, orders must specify the benefit being awarded. Orders must contain language such as “survivor annuity,” “death benefits,” “former spouse annuity under 5 U.S.C. 8341(h)(1),” etc.
2. Orders that provide that the former spouse is to “continue as” or “be named as” the “designated beneficiary” of CSRS benefits will be interpreted to award a former spouse annuity.
3. Orders that provide that the former spouse will “continue to receive benefits after the death of” the employee or “that benefits will continue after the death of” the employee, but do not use terms such as “survivor annuity,” “death benefits,” “former spouse annuity,” or similar terms will not be interpreted to award a former spouse annuity.
4. Orders that give the former spouse the right to elect a former spouse annuity will be interpreted to award a former spouse annuity. The former spouse does not have an election opportunity. OPM will not accept an election by the former spouse to eliminate the court-awarded former spouse annuity.
C. 1. Orders that unequivocally award survivor annuity and direct the former spouse to pay for that benefit are qualifying court orders. If the former spouse has also been awarded a portion of the retiree's benefits then the cost of the survivor benefit will be deducted from the former spouse's portion of the annuity (if sufficient to cover the total cost—there will be no partial withholding). Otherwise, the reduction will be taken from the retiree's annuity and collection from the former spouse will be a private matter between the parties.
2. Orders that condition the award of survivor annuity on the former spouse's payment of the cost of the benefit are qualifying only if there is also an award of retirement benefits sufficient to cover the cost. Absent a sufficient award of employee retirement benefits to pay the cost of survivor benefits, the order is not qualifying.
D. Orders providing that former spouses will keep the survivor annuity to which they were entitled at the time of the divorce will be interpreted to award a former spouse annuity in the same amount as they had at the time of divorce.
E. Orders that fail to state the amount of the former spouse annuity will be interpreted as providing the maximum former spouse annuity.
F. Orders awarding a former spouse annuity of less than $12 per year are qualifying court orders. Such orders will be interpreted to provide an initial rate of $1 per month plus all cost-of-living increases occurring after the date of the order. The reduction in the retiree's annuity will be computed as though the order provided a former spouse annuity of $1 per month.
G. Orders that provide full survivor annuity benefits to a former spouse with the contingency that the employee or annuitant may elect a lesser benefit for the former spouse upon his or her remarriage will be interpreted to provide only a full survivor annuity benefit to the former spouse. In order to provide full survivor annuity benefits to a former spouse with the contingency that the employee or annuitant may provide a lesser survivor annuity benefit to the former spouse in order to provide survivor annuity benefits for a subsequent spouse, the order should allow a reduction in the former spouse benefit contingent upon the employee's or annuitant's election of survivor annuity benefits for a subsequent spouse. A reduction in the amount of survivor benefits provided to the former spouse will not be permitted if it is contingent upon the employee's or annuitant's remarriage rather than his or her election of survivor annuity benefits for a subsequent spouse. (See 5 CFR 838.1004(b).)