Passion, Money and Retiring Feds
By Ralph Smith
Wednesday, May 25, 2005
That apparently is not true. A marriage that may have survived the ups and downs of a spouse working 25 or more years in the federal government, may not survive when two people are suddenly around each other all the time. And, when a retired federal employee ends up getting a divorce, the final separation may not be quick or easy.
What about that annuity that has been accumulating for years? Does the former spouse of a retired federal employee get a slice of that potentially long-running federal benefit when a former fed departs from this Earth?
With money and (former) love, there can be a lot of passion, including passionate litigation. Last week, we provided a description of one scenario involving a survivor annuity. (See, "Honey, I Forgot To Give My Former Wife a Survivor Annuity.")
Here is another scenario in a new decision from the Court of Appeals for the Federal Circuit. As you will see, if you should be involved in a situation like this, be sure to get a lawyer familiar with the nuances of the federal retirement system.
The Rafferty's were married in 1974 and separated in 1990. Mr. Rafferty retired from his job as a federal employee in 1994. On his retirement application, he indicated he was not married and did not provide his wife with a survivor annuity.
A few years later, Ms. Rafferty filed for a divorce. She asked for her share of pension benefits from her former husband's federal retirement annuity. The divorce was granted in 2001. No mention was made of a survivor annuity in the court order granting the divorce even though she had asked for one.
To clarify the matter, Ms. Rafferty went back to the court to ensure she would receive an survivor annuity. Her former husband opposed her request but they settled when he agreed to ask the Office of Personnel Management (OPM) to award her a survivor annuity. The court granting the divorce also issued an order giving her the maximum possible survivor annuity benefit under the Civil Service Retirement System.
But the happiness (and financial security) of the former wife of a retired fed was short-lived. OPM denied the application to grant her a survivor annuity. Undaunted, she headed for the Merit Systems Protection Board (MSPB) to try and retrieve the survivor annuity to which she thought she was entitled.
But the bad news continued to flow. The MSPB upheld the decision by OPM denying her a survivor annuity.
Ms. Rafferty pressed on. Before the Court of Appeals for the Federal Circuit, her attorney unveiled several arguments on her behalf--including an argument that the OPM regulations were inconsistent with law. Unfortunately for her, the court did not find any of the arguments persuasive and her request for a survivor annuity was again denied while the OPM regulations survived another round of judicial review.
The problem facing Ms. Rafferty was largely the regulations issued by OPM. These regulations state that a court order giving a former spouse a survivor annuity must do so "expressly." Having said that, the regulations go on to state that an order awarding a survivor annuity must do so before the employee dies or before the employee retires. And (the portion of the regulations that effectively halted Ms. Rafferty's attempts to gain a survivor annuity), the award of a survivor annuity must do so in the first award dividing the marital property.
In other words, a second court order to include the award of a survivor annuity is not sufficient. As a result, fair or not, the court found that this former spouse of a retired federal employee apparently won't get the long-term financial security she was seeking.
Rafferty v. OPM, 04-3323 (May 18, 2005), Court of Appeals for the Federal Circuit
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