Degrees of Losing: a Challenge to the Federal "frozen Benefit Rule"

• Jurisdiction: United States,Federal
• Citation: Vol. 39 No. 3
• Publication year: 2023

Degrees of Losing: A Challenge to the Federal "Frozen Benefit Rule"

Tuscan A. Fairfield

tfairfield1@student.gsu.edu

[Page 855]

DEGREES OF LOSING: A CHALLENGE TO THE FEDERAL "FROZEN BENEFIT RULE"

Tuscan A. Fairfield^*

ABSTRACT

The 2016 amendment to the Uniformed Services Former Spouses' Protection Act dramatically changed the level of discretion afforded to states in dividing military retired pay between divorcing parties. Now, all divorces involving an active service member at the time of divorce must adhere to Congress's strict formula when dividing the former spouse's interest in the service member's pension. This Note explores the question of whether Congress overstepped its constitutional limitations in directing the actions of state courts, whether the new rule may violate principles of equal protection doctrine, and whether a challenge to the novel scheme has any chance of success. This Note proposes a potential challenge and, finally, asks why we should treat military service members and their money differently in the first place.

[Page 856]

CONTENTS

Introduction.................................................................................856

I. Background.............................................................................860

A. Where Does Military Retired Pay Come From?................860

1. Retiring the Old Guard................................................862
2. Who Gets a Slice of the Pie?........................................864

B. Rejecting McCarty to Protect the Former Spouse.............866
C. How the States Used the USFSPA.....................................869

1. The Majority "Time Rule" Approach..........................869
2. The Minority "Frozen Benefit Rule" Approach..........871

II. Analysis...................................................................................872

A. A Challenge Under the Fourteenth Amendment................872

1. Which Test Is Best?......................................................873
2. Finding Discriminatory Intent: The Needle in the Haystack.......................................................................876

B. Infringement on the States' Power over Family Law........878

1. Jurisprudence Surrounding the Interplay of Family and Military Law.................................................................879
2. A Question of First Impression....................................882

III. Proposal.................................................................................884

A. A Judicial Challenge ......................................................... 885

1. Appeals......................................................................... 887
2. Injunction ..................................................................... 888

B. Change Must Come from Congress................................... 889
C. What Makes Military Retired Pay So Special? ................. 892

Conclusion....................................................................................893

[Page 857]

Introduction

What sets a military pension apart from all others? Military recruiters often sing the praises of military retired pay when enticing young people to enlist, but retirement benefits factor into any long-term employment decision. Of course, the United States strives to provide for the men and women in uniform even after their terms of service have ended, but nothing about this philosophy explains why Congress has elected to treat the division of military retired pay differently when a service member seeks a divorce.

From the outset, the United States Constitution limited congressional appropriations for the armed services to two years.¹ In modern day, with visions of Redcoats in Boston a distant memory, fear surrounding military power has largely abated; to the contrary, American political leaders push an ever-vigilant and dominant military force.² In 1962, Congress adopted the practice of passing the annual National Defense Authorization Act (NDAA), an omnibus spending bill that provides the annual budget for all U.S. military programs.³

Members of Congress love the NDAA: It is one of those must-pass bills that allows representatives and senators to pass unpopular measures more easily.⁴ In 2016, Representative Steve Russell, a

[Page 858]

freshman representative from Oklahoma, resolved to use the NDAA as a vehicle to direct state courts in the division of military retired pay in divorce proceedings.⁵ His proposal amended the Uniformed Services Former Spouses' Protection Act of 1982 (USFSPA) to require courts to calculate a former spouse's marital portion of military retired pay using the service member's base pay and years of service at the time of divorce.⁶ The measure took the method for the division of marital property out of the hands of the state courts that otherwise enjoy broad discretion in dividing marital assets.⁷ After Representative Russell referenced certain complaints he received from disgruntled

[Page 859]

veterans,⁸ the amendment (the Frozen Benefit Rule) passed the House Armed Services Committee by unanimous voice vote and endured no floor debate.⁹

Importantly, Representative Russell passed similar legislation during his time in the Oklahoma Senate, but he complained that conflicts with federal law did not allow him to do enough.¹⁰ So what, exactly, is enough? Apparently, Representative Russell felt that, in most states, judicial discretion on the division of military retired pay did service members an injustice by allowing their former spouses to enjoy benefits from continued service occurring after the marriage.¹¹ The Frozen Benefit Rule creates a legal fiction that permanently arrests the former spouse's entitlement at the time of divorce and calculates her benefits using the service member's rank and years of service at the time of divorce rather than at the time of retirement.¹² If a service member continues to serve and enjoys promotions, the resulting increase to his military retired pay—based on pay increases and

[Page 860]

increased longevity—belongs exclusively to him.¹³ No other retirement scheme features such a requirement. Before state courts were required to adhere to the Frozen Benefit Rule, they enjoyed wide discretion in dividing military retired pay, with only five states applying the Frozen Benefit Rule.¹⁴

The foregoing paragraph intentionally employs gendered pronouns because men continue to comprise an overwhelming majority of the armed forces.¹⁵ Thus, advocates of the Frozen Benefit Rule must have foreseen the resulting disproportionate impact on women. This Note addresses Congress's disparate treatment of military retired pay as it compares to other benefit plans and whether Congress exceeded its Article I power in enacting the Frozen Benefit Rule. Part I offers a comprehensive look at the evolution of military retired pay and its treatment by state courts before 2016. Part II analyzes the potential for possible challenges to the law. Lastly, Part III proposes a judicial challenge to the law or, in the alternative, an extension of the doctrine to encompass all benefit plans.

I. Background

A. Where Does Military Retired Pay Come From?

The contemporary view of military retired pay has evolved somewhat but has remained relatively static since its inception.¹⁶ To

[Page 861]

properly understand the present controversy this Note addresses, one must first appreciate the different flavors of military retirement: non-disability retirement, disability retirement, and reserve retirement.¹⁷ Members earn non-disability retirement—a calculated fraction of the member's monthly salary payable immediately upon retirement—after twenty years of active-duty service in the armed forces.¹⁸ This policy does not discriminate between enlistees and officers.¹⁹ Reserve retirement operates much more like a traditional pension, making a portion of the member's monthly salary available upon the member's sixtieth birthday, but the minimum age drops proportionately to any time the member served on active duty.²⁰ This Note will not address the far more frequently appealed issue of divisibility of disability retirement.²¹ Instead, what follows offers an overview of how military retired pay evolved from compensation for aging officers forced out of the armed forces into a property right akin to the rudimentary pension plan and fully divisible upon divorce.

Once Congress, through the USFSPA, affirmatively declared that state courts can and should determine whether military retired pay is a

[Page 862]

marital asset,²² division of military retired pay entered the ever-perilous realm of judicial discretion.²³ Indeed, it is the difficulty of controlling the state courts at a national level that convinced Representative Russell and others of the need to nationalize the Frozen Benefit Rule.²⁴

1. Retiring the Old Guard

In the mid-nineteenth century, the officer corps was getting too old, placing an increased burden on younger officers' advancement.²⁵ The same service members who fought in the War of 1812 refused to retire from the armed forces well into the 1850s and, in addition to frustrating the advancement of younger officers, extracted their generous salaries from American taxpayers into their sixties.²⁶ As a result, Congress authorized the Secretary of the Navy to convene a board to force retirement for certain officers "who were deemed incapable or unfit for duty."²⁷ The legislation placed the officers on a "reserve list" which entitled them to half their salary at the time of retirement in perpetuity.²⁸ In 1861, the measure was extended to include the voluntary retirement of service members after forty years of service.²⁹

[Page 863]

At this juncture (setting aside for the moment that nineteenth-century divorces were exceedingly rare³⁰ ), contemporaries considered military retired pay to be the equivalent of a salary as opposed to a property asset.³¹

In 1916, Congress adopted the formulation for military retired pay: 2.5%...