No Annuity for Surviving Former Spouse

Surely there is no intentional irony in the appeals court issuing a decision denying a surviving spouse a share of her husband’s annuity on Valentine’s Day, of all days. (Banks v. Office of Personnel Management, CAFC No. 2011-3203 (nonprecedential), 2/14/12)

Here is yet another case where the federal employee failed to follow the appropriate steps to ensure that his ex-wife would get a survivor annuity benefit, even in face of evidence that he intended this result.

Mr. Banks was a physician with Hines Veterans Administration Hospital when he filed for disability retirement and elected the survivor annuity for Carol to whom he was still married at the time. The Office of Personnel Management accepted Mr. Banks’ application and warned him in their approval letter that he was required to notify OPM if there was any change in his marital status in the future. (Opinion p. 2)

Four years later the Banks apparently went through an amicable divorce ending their 22-year marriage. Carol Banks later testified that she and her ex decided as they negotiated the divorce that she would continue to receive a survivor annuity.

Unfortunately for her, the attorneys, while supposedly aware of their clients’ intent according to Carol, failed to include mention of the spousal annuity in the divorce decree. Carol further testified that Mr. Banks continued to receive a reduced annuity since he never changed his election with OPM. He also apparently never notified OPM of the divorce. Carol also testified–supported by testimony of her two daughters—that there were no signs of correspondence from OPM notifying her ex husband of the requirement to submit within two years of a divorce an election to provide a survivor’s annuity for a former spouse. (pp. 2-3)

Four years after the divorce, Mr. Banks died, having never submitted the required election to OPM. When Carol Banks applied for her survivor’s annuity, OPM denied it.

On appeal to the Merit Systems Protection Board the evidence showed that OPM had sent Mr. Banks its routine annual notice that among other things explained the requirements that must be met to provide a survivor’s annuity to a former spouse.

In a tough day in court for Mrs. Banks, the Administrative Judge concluded that Mr. Banks intended to provide the survivor’s annuity for her, that OPM had put Mr. Banks on notice of the requirement that he make the election, but that Mr. Banks had failed to do so. Since Mrs. Banks could not prove that her ex husband did not receive the OPM annual notices she was not entitled to the survivor annuity. (pp. 4-5)

The appeals court has now sustained the MSPB decision and Mrs. Banks is out of luck. The court cites the two conditions that must be met for a former spouse to be able to receive a survivor annuity: “the annuitant did not receive the required annual notice of his election rights; and ‘there is evidence sufficient to show that the annuitant intended to provide a survivor annuity for the former spouse.’” (p. 6)

Since OPM submitted into evidence before the MSPB an affidavit that a general notice had been sent to all annuitants during the two years in question, that “is alone sufficient to satisfy OPM’s burden.” (p. 8)

This is yet another tough outcome for a former spouse. She obviously relied on her ex husband to do whatever was necessary to ensure she got a survivor annuity. He let her down and she found herself in the almost impossible position of proving a negative—that OPM never in fact notified her ex of the requirements.

Banks v. OPM (2011-3203)

© 2016 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

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About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.

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