Under Arizona law, nearly all assets and debts that either spouse acquires during the marriage become part of the marital estate. In addition to real property, like houses and cars, marital property may include bank holdings, investments and retirement plans: including military pensions.
During a divorce, a retirement plan may be subject to division by the court in the form of a Qualified Domestic Relations Order. In the case of a military divorce, the Uniformed Services Former Spouses’ Protection Act may entitle a service member’s ex-partner to a portion of a military pension plan upon retirement in the form of alimony, child support or a property division decision.
When does a military spouse become eligible to receive pension benefits?
To be eligible to receive benefits under the USFSPA, a military marriage must meet the “10/10” rule. Under this rule, a former spouse must have been in the marriage for at least ten years of duty creditable to retirement to receive a portion of retirement pay.
Does the law automatically entitle eligible ex-spouses to retirement pay?
While ex-partners must meet the 10/10 rule to be eligible for benefits under the USFSPA, the law also determines that it is the state courts that have authority to distribute military retirement assets according to local statutes; ex-spouses are not automatically entitled to a portion of retirement pay.
How does the court determine the division of retirement benefits?
Under the USFSPA, state courts must divide retirement benefits determined to be part of the marital estate in the form of either a percentage of disposable pay or fixed monthly payments.
The standard maximum percentage that the court can award a former spouse is 50% of disposable retirement pay. However, if the court determines that child support and/or alimony are due, the maximum percentage eligible for garnishment is 65%.
Additionally, if the court makes a percentage award, that percentage amount may increase between the date of divorce and the date of retirement to match cost-of-living adjustments.