Attorney Guide Dividing Military Reserve Early Retirement Pay

© 2019 Brian Mork, Ph.D. [Rev 2.33]

HomeSite IndexWikiBlog rss-feed



When dividing the marriage asset of military retirement pay due to divorce, Active Duty and Reserve retirement are similar, but not the same. This web page describes an issue unique to military Reserve (or National Guard) members.  When the marriage occurred wholly before or spanned January 28, 2008 and military duty extended beyond that date, these issues need to be considered.

If your concerns are more general in nature, see other web pages describing Dual Coverture methods, Promotion Enhancement, or Area Method  calculations (with example divisions). There is also a discussion group.

This web page is about Reduced Retired Pay Age created by Federal law 10 USC 12371(f)(2)(A) enacted in January 2008, which does not negatively impact or commingle in any way with the traditional Reserve retirement described in 10 USC 12371(f)(1). Do not confuse this with early Retirement civilian buy-outs to retire early, nor military buy-outs like SSBs or VSIs.  This benefit is functionally a retention bonus.  In almost all jurisdictions, dividing Reduced Retired Pay Age paychecksis an issue of first impression. 

You will find that if a court is familar with military retirements, it is probably limited to Active Duty Retirement.  Beyond that, a court must learn about Reserve retirements and it's often a challenge to introduce even the concept of retirement point value rather than days. Resources I publish are here to help you; please feel free to send me an email with questions.

This web page includes:

Background about Early Retirement

Litigation about military retirement typically center around the the amount of military payments to be received each month by the non-military ex-spouse.  If there is possibility for future military promotions after the divorce, you should read about how to properly do calculations to handle promotion enhancements after divorce.  In 2017, the Federal NDAA mandated a common method across the nation.

In contrast to those issues, the salient point on this web page is that a military retirement asset value is the multiplication of the amount each month multiplied by which months payment is received.  Up until 2008, this distinction has not mattered because both amount of checks and number of checks comingled together. After January 2008, the comingling no longer happens.

As of January 2008, a new Federal Law offers a retention bonus to military Reservists in the form of an additional and distinct paychecks. For a Reserve military retirement, there are now two quantifiable different military retirements to be individually assessed to be a marital asset or not.  The two retirements do not comingle in any way, and the new retirement does not modify or affect the traditional retirement in any way.  Retirement pay paid after a Reserve military member turns 60 is the traditional retirement that courts may be familiar with.  For a Reservist, the new 2008 law authorizes retirement payments before age 60.  Specifically, for every 90 days of additional days of duty done after 28 January 2008, three additional monthly retirement checks are earned.

In the simplest case, if a marriage ended before 28 January 2008, the before-age-60 payments are not a marital assets at all and are not subject to division.

The magnitude of this asset is equal in value to a house or real-estate property.  For an O-6 retiring with 6300 duty points and 27 months of early credit, the early retirement asset is worth 27 monthly payments of 2.5% * (6300/360) * $10,878 => $4759, or $128,500 in 2016 dollars. The question at hand is if this asset is earned from active work only after the divorce, should a spouse receive up to half of the value (the max percentage set by USFSPA Federal law) when it is actively earned after the divorce?  A Depart of Defense Congressional report suggest an answer in a way consistent with every state law:

"[Giving ex-spouse a portion of post-marriage benefit] of military retired pay is inconsistent with the treatment of other marital assets in divorce proceedings—only those assets that exist at the time of divorce or separation are subject to division. Assets that are [actively] earned after a divorce are the sole property of the party who earned them."

The default position of DFAS is to divide any and all retirement checks.  A division order must specifically address Reduced Retired Pay Age checks and tell them to not divide the early checks or to divide them differently.

Without guidance, DFAS assumes early payments are to be divided the same as payments after age 60.  Typical of confusion in this area, DFAS interprets the "pay at the same time" clause in many division orders as a mandate to divide early retirement.  The problem is that this clause came from a 2004 Mark Sullivan template which Mr. Sullivan himself describes in the source for a different purpose (direct DFAS to pay according to the 10-year rule).  DFAS' interpretation is incorrect because it conflicts with the stated intent of the author and ignores the fact that the clause existed in the template nearly 4 years before the early retirement law existed.  My points is this: any lack of clarity on the part of division order will create inequity against Reserve retirees who did duty both before and after the date of the new law. 

A 2009 State of Michigan Appellate court also ruled that retention bonuses earned after the divorce belong only to earner of the bonuses.  The court (12/29/2009 Skelly v. Skelly, No 287127) overturned a lower court ruling and clarified that retention bonuses earned or accrued after the marriage are not divisible property.  Reduced Retired Payments before age 60 are precisely a retention bonus earned only after 1/28/2008.

The 1988 Michigan Appellate Kilbride decision agrees and intentionally levies their opinion on lower courts cases:

"We offer the following guidelines for the trial court in determining the present value of the pension in accordance with the statute. To begin, we believe that an equitable distribution under the pension statute requires that the method employed reflect the fact that the value of the pension for distribution purposes in a divorce proceeding is only that value which accrued during the course of the marriage. Any accrual of value before or after the marriage may not be considered. Furthermore, 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."

Some aspects of Kilbride have been abrogated by later case law.  In particular, separate assets can be invaded when there is demonstrated need.  But in the Skelly opinion, the Court defines a third class (not marital and not separate) called non-existent assets, and protects such future non-existent assets from division. The Kilbridge litmus test stands: the division method calculation must not change the marital asset based on anything either part does after divorce.

The new Federal law 10 USC 12371(f)(2)(A) has big implications on how the military retirement division order should be written if military duty occurs after 28 January 2008, and any portion of the marriage was before that date.  The rest of this document presents arguments for or arguments againt dividing the early retirement asset.


Regardless of when a military Reserve member enters retired status, 10 USC 12731(f)(1) authorizes retirement payments only at and after military member age 60.  However, as of January 2008, 10 USC 12731(f)(2)(A) authorizes a Reservist to receive additional payments before age 60 by working duty days after January 28th, 2008.  If value associated wtih duty points after 1/28/08 are set aside from division, the 12371 benefit should be set aside at the same proportion.

An Air Force news release explains this new law which creates a new, separate, and distinct, marital asset.  The new asset is additive to the estate, and does not comingled or impact in any way the normal retirement assets which are permitted for division since USFSPA became law.

With the prior traditional Retirement military retirement, there is a commingling of effect of marriage duty years such that years are treated equally and prorated for division based on a count of how many military years were also married years—this is the “coverture fraction” allowed by the USFSPA.  Comingled means that a date of duty (before or after divorce) could be swapped with any other period of the marriage and military career and the total retirement value does not change.  This is not true when moving a duty date across the 28 January 2008 boundary, and therefore demonstrates that the two retirements are not combinable or comingleable.

It’s important to note 10 USC 12731(f)(2)(A) clearly and quantifiably defines the receipt of retirement pay before age 60 dependent if and only if military duty was done January 28th, 2008 and after. Because of the hard date in the sand, there is no commingling, and USFSPA does not authorize "reaching across" this date and combining retirements.  Division of the new retirement benefit requires handling as a separate asset. Points earned before January 28, 2008 create coverture fractions for payments after age 60. Points earned after Janaury 28, 2008 create coverture fractions for before age 60 payments.  If a marriage ends before January 28th, no division should occur for payments before age 60.

In summary, Reserve retirement consists of two separate and distinct, and not comingled retirements, which may require two coverture fractions if one of them is not zero.
  1. Retirement earned after 1/28/08 --> retirement payments before age 60.
  2. Retirement earned before 1/28/08 ---> retirement payments after age 60.

Argument For and Against

The rest of this document discusses why early retirement earned after a marriage should not be divided.  If you want to know how to actually do it, please refer to another web page on Dual Coverture or Area Method or the DFAS Hypothetical Method.  For divorces after 2016, the NDAA 2017 law requires a national standard mathematically identical to the Dual Coverture method I promoted for seven years prior and DFAS has chosen to implement that law by mandating only the Hypothetical Method be used.

For before-age-60 retirement checks, one could argue in a talmudic way that the military member is re-using shared marital points to calculate the before-age-60 benefit, or that additional benefit is "based on" the marital portion of the benefit, and therefore the ex-spouse should “get a cut” of the benefit. This argument lacks viability in the face of a division order that awards division of military retirement benefit "accrued during the marriage" or "earned during the marriage".

To be precise, value is divided, not points.  When the points are emptied of marital value and divided, if a military member then adds additional and different value into those points, that additional value is not a marital asset.  Think of it this way: the points are like a bucket filled with value.  When the bucket is emptied at the time of divorce, the division is over and complete.  If someone adds additional value, it is theirs alone.

The situation is analagous to dividing a 401(k) account, and then having one person contribute more to the 401(k) post-divorce.  The value of the 401(k) is divided at time of divorce, and the financial account continues. If a person puts more money into he account (aka into the bucket) after divorce, the additional value is not converted to a marital asset by simply existing in the same account number. Similarly, if a person does more work and creates more value into military points after divorce, the additional value does not suddently become a marital asset by simply existing in the same point buckets. The additional contributions are not divisible.  In a pragmatic sense, it is trivial to property divide the value - checks after age 60 and checks before age 60.

Even IF you want to (incorrectly) accept the argument of "based on", then the same argument could be used against the ex-spouse: a 50:50 division of duty is unfair when it's "based on" solo military time before the marriage.  (See where the white portion overlays the dotted portion in the Area Method diagrams introduced elsewhere.)  The second argument has been an anathama in the courts, so the first argument should be declined, also. 

The legally undefined and vague concept of "based on" logic is often introduced after the divorce decree to invade the additional retirement value while creating a division order.  However, in addition to the taboo argument above, this logic is faulty because it would lead to absurd and inequitable ramifications if applied to each spouse equally (see numbered points below).  State laws and divorce decrees explicity say ex-spouse payments are to be calculated from benefit accrued during the marriage, not vaguely "based on" events during the marriage. Post hoc ergo propter hoc arguments are false.

A correct litmus test regarding the division of retirement asset should ensure ex-spouse value does not go up or down based on anything either party does after the divorce, and this includes earlier payments.  Remember a military retirement is asset division, not income division.  A marital (shared) asset divided at divorce must be caclulated so it does not go up in value because one party does more work after divorce.  The shared marital asset should increase in dollar amount while parties wait for payment because of passive time-value-of-money (COLA or pay-chart increases).  However, actively earned increase in value after divorce belongs only to the person who earned it.  If this is not true with your proposal to do the division, your proposal is inequitable.  If you want to be equitable but cannot figure out how to do the math, please conctact me and I will help.

Parlaying duty credit, that at the time of divorce is shared, into higher value via additional duty is a legitimate military member solo effort, and does not invoke divisibility of the higher value enhancement.  Duty credit or duty points are worth nothing; it is the use of the points that creates value and Early Retirement creates such a new use. 

Here are multiple reasons why the separate and non-comingled asset value in the form of early retirement payments must not automatically be lumped in with the traditional retirement:
  1. Allowing benefits earned and accrued after the marriage to be divided is a) not applied with symmetry to both spouses, and b) never allows lives to separate, dishonoring the very definition of divorce.  Examples:

  2. The additional value of retirement points (payments before age 60) earned by the military member after the marriage in no way decreases the prior value to the ex-spouse and therefore should not be encumbered. 5 USC 8332(c)(4) is an example of how ex-spouse interests are already protected by Federal Law:  if the post age 60 retirement value were decreased (it is not), then the ex-spouse may invade the additional or dual-use value.  However, Federal law limits how much the additional value can be invaded to the extent required to make their original value whole.  In the case of before-age-60 benefit, the value retained by the ex-spouse is NOT decreased, so invasion of the new benefit is limited to zero.  Even if invasion of pre-age 60 payments were appropriate, Federal law requires that it should be restored to only the original value, which means potentionally unlimited additional value is NOT to be divided. This statute demonstrates the Federal intent that enhanced point value actively earned after the marriage belongs entirely to the military member doing the work except in the case where it decreases ex-spouse payments, and then it is to be shared only to the extent that restores original value.  Reserve Early retirement never affects the original, and is therefore not to be invaded or encumbered.

  3. The ex-spouse contributes no partnership to the early payments, and therefore should expect nothing from the early payments. Because the ex-spouse contributes nothing after the marriage, that is how they should expect their payment to change: the ex-spouse value should be blind to any increases the ex-spouse is not part of.  There is one exception, where both parties are trapped by Federal law. Although the retirement asset would be ideally divided at the time of divorce (like a 401(k) or IRA), the Federal government forces both parties to wait for disbursement until after the military member retires.  Because both parties have to wait for distribution of the asset until some future time after the divorce, they are both compensated for the "time-value of money" or "cost of living adjustments" via passive annual increases of the military pay chart, to which retirement payments are indexed. Note that passive increases may be divisible, but earned active increases such as early retirement payments are not. The Area Method of division is the simplest and most lucid way to do this.

  4. Once the early retirement benefit is earned or authorized, and adjudicated to not be a marital asset, how it is calculated is a private benefit or entitlement matter between the military member and employer.  The method of calculation never authorizes invasion of an asset, only how the asset is earned matters.  Additional value or dual-use value of each duty day is added solely by the work of one person after the marriage.  Therefore, the added benefit associated with the added value belongs to only that person contributing to that value. By way of anology, some military members receive a retention bonus after the marriage by signing a contract after the marriage to stay in the military for an additional number of years.  In these cases, the ex-spouse would gain no portion of that bonus, even though the military member was positioned for eligibility because of longevity including military years done during the marriage.  The new retirement is a financial retention motivation tool, obtained via a performance contract after the marriage that does not include the ex-spouse.

  5. The enhanced value of the aggregate retirement asset is created by earning more pay dates, not changing how much is paid on each pay date.  Prior USFSPA law and case precedence is about determining how much is paid to whom on each date.  According to Federal statute, the enhanced value given by 10 USC 12731(f)(2)(A) is quantifiable separate and distinct retirement benefit.  The ex-spouse contributed nothing toward the extra days, which create additional pay dates, not additional pay amount. Retirement payments before military member age 60 are not marital assets, so dividing them under UFSPA is inappropriate.  In the case of a marriage that ended before January 28, 2008, a court order should simply state that payments before military member age 60 are not to be divided.  When marriage and military duty span January 28, 2008, the court order should state two percentages or fractions.  One is applicable for payments before age 60 and one is applicable for payments after age 60.  Alternately, because of DFAS bureacratic limitations, division orders could choose to not address the issue with DFAS, but rather direct "overpayments" to one person or the other be returned to the rightful owner.  In a similar way, the court order may simply state payments before age 60 be returned to the rightful owner.

  6. Consider a chronologically opposite case where the military person worked solo duty for years before marriage.  Courts do not recognize that ex-spouse portion is "based on" or "because of" prior solo military duty and therefore they should get less than half of the marital years.  If solo military duty before marriage does not reach into the future to reduce the division of marriage years because of a "based on" relationship, then marriage years should not reach into the future and increase the division of post-marriage years because of a "based on" relationship.   The problem is that using vague "based on" arguments is kind of like saying a person's 50th year of life is based on the fact that they completed the 40th year of life.  This logic is not allowed in the court because then the entire rest of a person's life would be divisible as marriage asset. There is no place for intentionally vague and legally undefined "based on" or "because of" language in court proceedings.

  7. The number of days retirement is received early (before member age 60) is proportional to the amount duty days after the law.  For example, twice as many days after the law earns twice as many days of retirements before age 60.  The early retirement value is not proportional to the number of duty days of shared effort before 1/28/2008, mathematically showing that they are decoupled and separate.

  8. Just because both assets here are called "retirement", that is not a reason to divide both!  The extra retirement pay dates require no prior rank, seniority, or duty before the demarkation date. It is a totally separate program. It is quantifiable separable and independent, authorized by separate dates of duty, authorized by a new paragraph in the Federal statute.  Simply because the separate benefit is also colloquially called “military retirement”, courts may confuse the issue.  However, if courts do not take the time to understand and separately allocate this retirement benefit, their error would be as egreggious as if they lumped all “IRAs” or all “401(k)s” or all “pensions” together just because they have the same name.  It is unconsciousable and exhibits judicial malpractice to say that a 401(k) or IRA started after the marriage should be divided simply because it's called the same name!

Summary of Differences

Reserve Early Retirement pay is different than other military retired pay discussed in the context of USFSPA.  The table below summarizes differences.

Normal Military Retirement (USFSPA)

Military Early Retirement Age checks

Some retirement pay is a marrital asset and may be divided because part of may be earned/accrued during marriage.
Retirement pay is not a marital asset when it is  earned/accrued after marriage.
Traditional Reserve retirement pay occurs when two conditions are met: age 60, 10 USC 12731(f)(1); and “20 good years” defined by 12732(a)(2), 12731(a)(2).

Active duty retirement is after 20 years, USC 8911.
Reserve military command issues orders under 10 USC 12731(f)(2)(a), which does not wait for age 60 - resultant pay is in addition to, and does not affect or comingle with any other military retirement.
Asset value is accrued (retirement is earned) proportional to active duty dates across entire career.
Value is accrued (retirement is earned) counting active duty dates only after January 28, 2008.  Days of payment correlate exactly 1-to-1 with days of duty after January 28, 2008. If marriage did not continue past this date, none of the value was earned during the marriage.
For an active duty retirement, 20 years (7300 days) of military duty are approved en-masse for retirement credit.  For a Reserve retirement, 20 "good years" of duty status are approved en-masse for retirement credit.  In either case, this generates a “20 year letter” from the military retirements branch. Each and every date (not just days) must be submitted through MyPers and reviewed, authorized, and approved by the Early Retirements branch of the military reserves command.  Each 90-day block of dates of duty earns 3 more months of retirement pay. Separate date authorization means there is no comingling of during and after marriage.
The last duty date of one’s 20 year career enables the entire retirement.  The last date is functionally identical to all other dates because it is the total of 20 years that turns on any and all of the retirement.  Note the U.S. Supreme Court (McCarty v. McCarty) ordered that military retirements were not divisible because they don’t exist until this last day of duty is earned, and hence were not earned during the marriage.  However, it was impossible to distinguish which duty date created the total of 20 years; they were all the same.  This confused “comingling” of dates is why legislatures created the USFSPA to change the law of the land.
The last duty date does not comingle with dates before Jan 28, 2008.  The value of retirement is not turned on by a sum of duty dates, rather the last duty block of dates adds just one more block of payment.  It is impossible to construe that dates after the marriage were earned during the marriage. 
Paycheck for each month is the same dollar amount as Early Retirement.  However, the retirement asset value is proportional to months of payment after age 60.
Paycheck for each month is the same as 20-year Reserve retirement.  However, the retirement asset value is proportional to months of payment before age 60.
Expectation value of asset exists since the first day of military duty.  Military duty and marriages start with knowledge and expectation of a possible future military retirement.
No expectation value exists before January 28, 2008.  Benefit never existed before this date.  Marriages and military careers start before this date with no future expectation.

Rebuttal Questions and Answers

Q1: Aren't before age 60 payments based on points earned while married and therefore divisible?

A1: No. How a benefit is calculated is different than how the benefit is accrued. There is no co-mingling of duty dates for the distinctly separate early retirement payments. The before age-60 payments are a distinct and separate different retirement contract between the Federal government and military member.  Early payments are enacted by Federal law after USFSPA and certain cases, after the marraige. Early retirement is a distinctly different marital asset and must be divided some, all, or none, depending on marital and military activities after January 2008.

Q2: Aren't the age 60 payments made higher based on commingled points?

A2: No. Payments are not "based on" points.  Payments are calculated from joint points, solo points, Federal COLA numbers, military pay tables, etc.  Points, per se,  do not have value to divide, and are not owned by anybody.  Lawful division is based on when value of is earned, not what point is calculated with.  The before age 60 payments are calculated using duty details after January 2008. No matter how many total marriage points are earned, the before age 60 payments are zero unless marriage duty is done after January 2008. The ex-spouse is already compensated for full contribution during marriage because commingled points earn the spouse a higher percentage of monthly payments from the traditional age 60 retirement.  Additional value earned after divorce does not affect the traditional retirement in any way.

Consider a Bucket Analogy: a point is like a bucket that can hold something of value. Division of the normal retirement divides and empties the bucket of all marital asset value.  Later in life, if one person puts value back into the bucket, that is new and different value that does not comingle.  It's like dividing all the value of a 401(k) and then putting more money into the 401(k) after divorce - the new contributions are not marital asset just because the same bank account was opened during marriage.

Q3: But if the divided points were absent in the calculation, wouldn't the before age 60 payments be less?

A3: If commingled marriage points were absent, then ALL payments (before and after age 60, and for both parties) would be less.  Remember, points are not defined as marital or not.  They do not have value, per se.  Rather it's the value ~in~ the points that can be accrued, divided, and replentished. Ex-spouse payments are intended to divide asset value earned during marriage, and the division formula preserves contant-year value of payments, which do not go up or down in value based on whether or not there are before age 60 payments. Points are not owned. The opportunity to USE those points is earned. Using points for age 60 benefit is one thing. Using points for payment prior to age 60 is a separate and distinct thing that does not comingle. See bucket analogy in Answer 2 above.

Q4: Aren't the payments paid before age 60 based on the same points that were partially earned by the ex-spouse?  In fact, the payments are exactly the same dollar amount ~because~ they're based on the same points.  If those same *shared* points cause the dollars to be divided after age 60, shouldn't they also cause the dollars to be divided before age 60?

A4: If the asset being divided was points, the logic in the question works. However, the asset is not points.  The marital asset of concern is value "deposited into" each point like a 401k retirement account: the bank account itself doesn't have value; rather the results of work effort deposits new value into the account. Making the distinction between points and value in those points is important.  The military member should be free and clear to use what they are left with after the divorce in order to improve life for themselves after the divorce.  In this case, what they are left with is points, stripped of nominally half their value.  The marital asset (dollar value of the points) was already divided with post-age-60 payments.  The points themselves, stripped of nominally half their value, should not be encumbered if the military member avails themself of a post-divorce new-law contract with the government that adds new value to the points that does not comingle, nor increase, nor decrease the previously stripped value. Like a checking account that was jointly opened during a marriage, once the value is divided at divorce, money later earned and deposited into the account is not a marital asset and is of no concern to a divorce court.  See the Bucket Analogy.

Division orders do not assign single-use privileges to point counts, which are artifacts used to calculate retirement value, nor do they incumber the mathematical formula used to calculate a contracts or third party agreement created after a divorce.  The work that earned the right to receive payment is what must be used to proportion a division.  Specifically, if all points are used to calculate a second benefit that was earned after divorce, congratulations to the person who negotiated or earned the addition benefit; it is theirs alone and the additional resultant asset is not a marital asset.

Q5: But won’t the military member’s income be higher because of shared work by the ex-spouse?

A5: No.  Duty points earned during the marriage have no value of themselves.  Value must be put into the points with work.  The shared work of the spouse causes division of the retirement value.  The right to use the points in a new way was earned 100% after the divorce.   The additional paychecks happen if and only if the military member does work after January 28, 2008. There is nothing either party does after the divorce that should make the marital asset go up or down in constant year dollars; this is the Michigan appellate court Kilbride litmus test.

Q6: Right, but if those points were not present, then the benefit would be lower for the military member, wouldn’t it?

A6: If points were not present, then benefits would be lower for both parties.  It’s problematic to hypothesize about non-historical non-truth.  Instead, we’re asking the court to make a distinction about what DID happen - between how a benefit is calculated vs. how it was earned or accrued - between marital asset value in the "point bucket" vs. non-marital value put into the same bucket after divorce.  As a precedence, consider that the Skelly Appellate court clarified that even after a benefit is paid and in the bank during a marriage, it is not a divisible marital asset if the right to keep it was accrued after the divorce.  We are asking the court to honor the intent of divorce law by dividing what was accrued during the marriage.  Tallies of points and rank cannot be enjoyed as a retirement benefit by anybody because they have no value.  The USE of points and rank creates retirement benefit.  The right to USE was 100% accrued after the divorce.

In fact, the argument to not divide is true for any military retirement where additional solo work effort after the divorce is necessary to create the asset.  MI 2009 Appellate Court Skelly v. Skelly makes the Michigan Kibride "litmus test" opinion even more clear by directing that after-divorce work required to simply retain an asset (let alone create it) is enough to cause non-division.

What's the difference between normal retirement pay (which is comingled and USFSPA allows division of) and before-age-60 retirement pay? The difference is huge. A military retirement is known as a possibility and expectation - indeed a recruitment tool - from before the first day of duty. If a marriage is started under these conditions, it is reasonable to argue either way. However, if a marriage is both started and ended without any possibility or existence of payment before age 60, then that lack of expectation indicates that any payment before age 60 that became possible with a new law after the divorce is not a marital asset.

The accrual of financial value from the points after age 60 was set in both law and expectation during the marriage, so it becomes divisible. The law creating the accrual of financial value before age 60 from the points did not exist before the divorce and has zero expectation value. Additionally, we are not considering passive enhancement-like earnings on an investment account that would be divisible. The new Federal law demands active performance after January 28th, 2008. There is no way to conjure a marital asset from what didn't exist during the marriage, wasn't expected during the marriage, and has to be worked for after the marriage.

If you want a more detailed explanation with examples, see the Section titled "Proximate of Events cause Division - a More Intellectual Explanation."  If you want to know how to pro-rate division for a marriage that spans the magic date of January 28th, 2008, let me know.  Basically payments before and after age 60 are treated as two separate assets to divide.

Based On

The phrase "based on" and "but for" cause great confusion when used with military retirements because they are legally undefined phrases. "Based on", "but for", and "provided a basis for" concepts are specifically critiqued in the Sullivan rebuttal available in the references section below.

It's important to distinguish two issues.  One is a potential debate about how a marital asset is divided.  The more important issue is whether something is a marital asset in the first place.  If an enhanced promotion benefit was "actively earned" or "accrued" without spousal contribution after the divorce, it is not a marital asset no matter what it is "based on" or how it is calculated.

The vague phrase "based on" usually means the more precise phrase "calculated from" or "calculated using" -- both of which are more useful because they have defined meaning.  Intentionally being vague is a goal only of someone trying to be inequitable. "Calculated from" is insufficient to justify division.  In fact, the claim "military member's post-divorce benefit is calculated from the ex-spouse's divisible points and therefore should be divided," is a moot point of perspective.  If true, it is equally true that "the ex-spouse's benefit is calculated from the military member's non-divisible points and therefore  should not be divided."  The reciprocity of calculation is done because that's how a military retirement is defined in Federal law, but method of calculation does not assign ownership, only participation in accruing the benefit does.

Consider if one of the spouses after the divorce writes a book "based on" their married military life together, the earnings from those books sales are not a marital asset because there was no value until the after-divorce solo effort – even though it was based on the marriage.

Or consider if a military pilot, after divorce, gets a civilian pilot job "based on" training obtained during married time in the military.  The civilian retirement is not a marital asset.

The phrase "based on" iobscures good judgment, and use of this word in military retirement divorce proceedings really means one of only two things:

1) "Based on" could mean "Accrued during".  Example: "The retirement payment increased based on additional duty done during the marriage."  In this case UFSPA law directs that retirement can be divided because there is a comingling of dates (switching dates does not affect the calculation).  Duty dates causing early retirement duty are demonstrably NOT comingled with the normal retirement duty dates because switching dates across the 1/28/2008 boundary does change retirement value, which contradicts the definition of comingled.

2) "Based on" could mean, "Derived from" or "Calculated from".   Example, "Ex-spouse wrote a book based on being married to the other person."   Book earnings are not divided even though it taps into and uses time of marriage.  Example, "DFAS Hypothetical division method is based on Cost Of Living Adjustments (COLA)."  Nothing about COLA is shared or divided just because it's in the calculation.

These two meanings create HUGE differences when dividing military benefit.  It's to the military member's benefit to be clear.  It's to the ex-spouse's benefit to be vague because without distinction, more of #2 situations can be drawn into #1. In either case, to ~intentionally~ be vague dishonors our legal system.

Even USFSPA, which created the ability to divide military retirments, declined the "based on" argument.  McCarty v. McCarty was the US Supreme Court pivotal case out of the 1980s that prevented division of military retirements in part because the benefit was "based on" the military member doing more solo work after marriage.

However, USFSPA declared that "based on" was an insufficient legal threshold and not a unitary disqualifier. Retirement that had been partially "earned or accrued" during the marriage was therefore partially a marital asset.

If "based on" future work effort isn't enough to prevent division, then "based on" past work effort is not enough to cause division.

Calling Reserve early retirement or promotion enhancements a marital asset because it's "based on" prior life events is an insufficient legal threshold.  It is an attempt to commingle an asset not earned or accrued during the marriage for the sole purpose of grabbing it for division.  Instead, after-divorce work is NOT comingled; it is easily separate by legal statute, mathematics, and practicality.

Proximate of Events cause Division - a More Intellectual Explanation

The January 2008 early retirement law allows Reserve military members to increase value of retirement by earning earlier additional payments, not more payment each month.  The extra value is in how MANY payments are made, not how MUCH each payment is. 

Another way of thinking about this issue is to consider the proximate cause of early retirement value increase.  When the points were earned during a marriage, both parties participated.  Latent value doesn't exist and has no value until the military member finishes a career without the marriage partnership and actually applies for retirement.  The Supreme Court ruled that latent military retirement cannot be divided.  However, in the specific and narrow case of military members with comingled duty dates, UFSPA legislation undid the Supreme Court ruling by allowing that courts may (not must) divide latent value if it is specifically a military retirement.  However, at least in Michigan, civilian latent benefits remain non-divisible per the 2009 Skelly v. Skelly Appellate course reversal mentioned above, which dealt with a latent civilian retention bonus that was ordered not divisible.

So how can Skelly be consistent with UFSPA?  The time sequence of events causing divisibility of military latent benefits in the eyes of UFSPA is:

First, laws since the early 20th century define how much monthly retirement payment is made
Then, retirement points are accrued during a marriage, followed by divorce
Then, latent retirement payments are vested or converted into earned retirement

Because the marriage accrual of value in the 2nd step is proximate to the developed retirement in the 3rd step, developed value becomes divisible.

However, with early retirement payments, the proximate relationship is divided and separated by a new law:

First, retirement points are accrued during a marriage, followed by divorce
Then, new laws in Jan 2008 create additional payments but do not change the amount of payments
Then, additional military retirement points are earned that make the payment per month go up, plus additional duty points (alone) create additional payment months.

The marriage accrual of value is NOT proximate to the developed retirement - rather the new law in the 2nd step is proximate to the developed value in the 3rd step - so developed value is not divisible.  Latency did not exist during the marriage. so USFSPA's attempt to correct division of a latent benefit does not apply. The Supreme Court ruling stands.

In the first case, the law and the earning of credit span *across* the marriage.  In the second case, the marriage was terminated and THEN a new law was created and a benefit was earned under the new law.  The marriage is NOT proximate to earning the benefit and therefore the benefit is not divisible.  It is rare that new laws reach retroactively and change history.  For example, even UFSPA laws did not attempt to do this.  In a similar way the January 2008 law should not reach retroactively into the marriage.  Graphically,

When in this order: ( Law - Marriage - Accrual ) ---> Division
When in this order: Marriage - ( Law - Accrual )---> No Division

If there is any doubt to this conclusion, consider contract law as an analogy.  If the marriage is inserted into the "retirement contract" between the Federal government to a military member, then the ex-spouse shares in that contract.  This is shown in parentheses above.  However, the early retirement law is a new "retirement contract" meant to motivate future duty of Reservists - causing them to do more duty for early retirement pay.  The new contract comes into existence only after the marriage is history.  The new contract is exclusive of marriage, and does not change or damage or modify the divisible retirement in any way, and so the ex-spouse has no third-party interest or claim into the additional value, regardless of how it is calculated.

In summary, although early retirement monthly amount is calculated using the same method to yield a fraction or percentage, the calculation process is not relevant to determine divisibility.  Early retirement payments earned and accrued outside of a marriage are not divisible  because marriage is chronologically outside the scope of the retention bonus contract.

Practical Legal Implementation

For those members who were married and did military duty before 1/28/08 and have earned or may in the future earn this retirement enhancement by earning points after 1/28/08, a decision must be made as to whether payments before age 60 are a divisible asset or an un-divisible asset.  The answer to this question would depend on the period of marriage, divided into 3 possibilities:

1.    If the marriage was entirely before 1/28/08, then the before age-60 retirement payments were earned only after the marriage, so the enhanced benefit is not a marital asset.  No matter what formula is used to determine a division percentage, the division order must specify that no division occurs until member age-60.  Caution: If the division order is silent on this issue, all retirement payments will be incorrectly divided by DFAS, so the order must state that payment division will begin only upon the military member reaching age 60.  An alternative to DFAS (sometimes an inpenetrable bureacracy) is to state that the ex-spouse return payments to the military member each month before age 60.

2.    If the marriage was entirely after 1/28/08, then the before age-60 monthly payments are divided same as after age-60 monthly payments.  Correct division will occur by not mentioning this issue at all in the order (DFAS will divide all payments the same).

3.    If the marriage spans 1/28/08, before age-60 monthly payments need to be divided with a different coverture fraction than done with the age-60 and after payments. The numbers for the coverture fractions for the two retirements will be different.  If the divorce is pre-NDAA 2017, the formula paragraphs use the Dual Coverture (time and rank/longevity) or Dual Coverture Area Method (if multiple divorces or military duty before marriage).  Post-NDAA 2017, the definition of "disposable retired pay" is changed to include one of the coverture fractions and the court order, per se, should use the single coverture time-based coverture fraction, and the overall effect will be a Dual Coverture division.

One other "got'cha" is worth paying attention to.  Military division orders may be generated using templates written by attorney Mark Sullivan. One of the cut-n-paste phrases is vague enough to cause trouble.  Under the 10-year rule, an ex-spouse can get payment direct from DFAS instead of passing through the retired military member.  Cut-n-paste paragraph 3(b) in Mark's 2014 guide offers the phrase, "Plaintiff shall receive payment at the same time as Defendant" (inappropriately, this assumes the plaintiff is the ex-spouse).  Mr. Sullivan introduces paragraph 3, saying, "This section addresses whether military retired pay may be paid directly by DFAS to the non-service member spouse."

However, a 29 Mar 2016 letter from DFAS quoted this phrase and said therefore early retirement pay would be divided as part of the marital estate.  Defining the marital estate is totally out of the bounds of DFAS' authority!  They misappropriated the sentence to a new and unintended purpose.  Their interpretation is wrong for 2 reasons:
  1. When the phrase was written in the guide, early Reserve retirement didn't even exist as a concept so it must be about something else, and
  2. The author of the guide clearly states it's for a different purpose. DFAS is known for their bureacratic quagmire and mistakes and you don't want to get tangled in their confusion (Virginia Pilot, Stars & Stripes, Outside the Beltway, Reuters).  Be clear in your division order about retirement pay before age 60.


To pursue equity, family law courts must recognize the new Reserve "early" military retirement as a separate and distinct entity.  It may or may not be a divisible marriage asset, or may be partially marital asset if the marriage spans January 28, 2008.  If this issue is not addressed in the original division order, every Reserve military member who earns a "before age 60 benefit" (possibly long after the divorce) should ask the court to address this issue in compliance with the original intent of the division order.  Logic, case law, 2017 NDAA Federal Law and the 2001 DoD USFSPA report to congress agree:

"[Giving ex-spouse a portion of post-marriage benefit] of military retired pay is inconsistent with the treatment of other marital assets in divorce proceedings—only those assets that exist at the time of divorce or separation are subject to division. Assets that are [actively] earned after a divorce are the sole property of the party who earned them."


  1. DFAS "Guidance on Dividing Military Retired Pay", March 2014, 25 pdf pages with bad formatting, 121 KB pdf. (, increa copy).
    1. Older copy April 2012, 20 pgs, 119 KB pdf. (, increa copy).
    2. Older copy "Attorney Instructions - Dividing Military Retired Pay", April 2001, 19 pgs, 74kb pdf. (, increa copy).
  2. DoD Report to Committee on Armed Services of the US Senate and House of Representatives, 1998, 84 pgs, 279 KB pdf. (, increa copy)
  3. Attorney Instructions - Division of Reserve and Active Duty Military Retirement (increa copy).
  4. Division of Blog post Dual Coverture is better than DFAS Hypothetical Method, February 2011
  5. "Reservists may qualify for early retired pay," news release (increa copy), 24 Feb 2009.
  6. Division of Military Retirement Promotion Enhancements Earned After Divorce, Mork, 2012 - a rebuttal to Mark Sullivan's 2001 editorial against the Armed Services Committee report.

Valid HTML 4.01 Transitional

This article originally appeared on the blog.  The shell of this expanded document was created using AbiWord under the Linux Gnome desktop. Content was edited using Kompozer. (c) 2017 by Brian Mork.