Navigating the Former Spouse Protection Act.

• Author: Cushing, Peter C.

In the early 1980's Congress enacted legislation overturning the U.S. Supreme Court decision in McCarty v. McCarty, 453 U.S. 210 (1981), which held that a military pension was the separate property of the service member and not subject to division in a dissolution of marriage action. In the 15 years since the enactment of the Former Spouse Protection Act (FSPA), controversy surrounding the fairness of this legislation, and the implementation of the FSPA by the various states, has raged in Congress. This article will discuss the McCarty decision and its merits, the FSPA and its several amendments, Florida's approach to division of military pensions, and a brief overview of application of the FSPA in other states.

The McCarty Decision

On June 26, 1981, the Court held that, in a dissolution of marriage, federal law precluded a California court from dividing military nondisability pay pursuant to state community property laws. The Court found that dividing a military pension in state court threatened grave harm to "clear and substantial" federal interests such as providing for the retired service member in old age, encouraging enlistment and reenlistment, orderly promotions, and encouragement of a youthful military. Military pensions were viewed by the Court as different from other pension systems, because the retired officer is subject to recall to active duty at any time, continues to be subject to the Uniform Code of Military Justice, and is restricted in post-service activities, including employment. Because of these factors, military retirement had not historically been considered a "pension," but rather reduced pay for reduced services. Not even a limited "property" concept had ever existed in military compensation laws or the Court's own precedents. As early as 1881, the U.S. Supreme Court had ruled that when a military member retires or leaves active duty, compensation is continued, with reduced duties and responsibilities. U.S. v. Tyler, 105 U.S. 244 (1881).

The McCarty Court also noted that dividing military pensions made it less likely that the retired service member would choose to reduce his or her retirement pay still further by purchasing an annuity for the surviving spouse and children. Since the military retirement laws contained nothing permitting the states to divide a military pension in a dissolution of marriage, the California superior court was reversed. Congress was invited to change the law if it so desired.

The Former Spouse Protection Act

Congress did act shortly after the McCarty decision by enacting the Uniformed Services Former Spouses' Protection Act. The USFSPA, or FSPA or FSVA, is found at 10 U.S.C. [subsections] 1408 et seq. (1982), effective date February 1, 1983, retroactive to June 25, 1981, one day prior to the McCarty decision. Sponsored by Rep. Patricia Schroeder (DCO), the FSPA reversed the McCarty decision, rejecting the Court's concerns regarding military retention, enlistment, and the economic needs of older veterans. Also known as the Former Spouse Victim Act by military retirees, the FSPA has been a source of confusion and controversy at both the state and national level.

The FSPA applies to the "uniformed services," defined to include the Army, Navy, Air Force, Marine Corps, Coast Guard, commissioned corps of the National Oceanic and Atmospheric Administration, and the commissioned corps of the Public Health Service. The FSPA applies to active duty, retired, and reserve/guard (whether active duty, inactive status, or retired), pay and nonpay categories.[1]

Since the FSPA is a federal statute, its provisions and the regulations thereunder preempt or supersede state laws. A state court order that contradicts the FSPA will not be enforceable. The FSPA, with limitations, allows state courts to treat a military pension either as property solely of the service member, or as property of the member and his or her spouse in accordance with the law of the jurisdiction for pay periods beginning after June 25, 1981. In the unlikely event that a state court order divided military retirement pay before June 26, 198 1, in conformity with the FSPA, the order will be honored.[2]

A 1990 amendment to the law addressed the retroactivity problem of former spouses returning to state court on "old" divorces seeking division of the military pension. The FSPA now specifically provides that a state court may not treat retired pay as property in any proceeding to divide or partition it if a final decree of dissolution, annulment, or legal separation (including property settlement cases) was issued before June 25, 1981, and that decree did not divide or reserve jurisdiction to divide the member's retired pay.[3]

Special Federal Jurisdictional Rules

Special federal jurisdictional rules apply to divide a military pension. A state court may not divide a military pension unless...