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January 01, 2017

Reserve Retirement and the Uniformed Services Former Spouses Protection Act: The Hypothetical Kuenzli v. Kuenzli Divorce

By Lt. Col. Kristine D. Kuenzli

When I first started using a hypothetical briefing of my own divorce to fellow judge advocate generals more than 15 years ago as a way to illustrate the Uniformed Services Former Spouses Protection Act (USFSPA), the focus was on the division of my active-duty husband’s upcoming retirement pay and what I would be entitled to as a former spouse. Lest the reader think that I am callous, my husband and I have, at least at this point, a happy marriage with no plans on divorcing. However, as a military spouse and a military attorney, mapping out my own divorce was an illustrative way to explain to other military attorneys what they needed to understand about USFSPA when advising clients. Those briefings focused on what I would be entitled to in terms of both financial compensation and other military benefits, if I was married to him for 20 years of his active-duty service.

There was a small footnote in my presentation on my reserve retirement, and if he would be entitled to a portion of my reserve retirement, if we were to divorce. But that was all that it was, a small footnote. My reserve retirement seemed even more tenuous than his active-duty retirement and was so far away in terms of my ability to start drawing that retirement. However, that briefing was more than 15 years ago and the situation has changed drastically. First of all, my husband is now a 26-year active-duty member and we have been married for almost 16 years. When he retires after 30 years of service, I should have a good argument (in my hypothetical divorce) that I can collect a significant portion of his retirement and maybe even be entitled to other military benefits as well. But wait a minute, not so fast. I now have 19 years of active duty and reserve service myself and under the new Reduced Reserve Retirement plan, my retirement is even closer than I imagined 15 years ago. What would my husband be entitled to now? It is a lot more than you think. It is no longer just a footnote.

Basics of USFSPA

Let’s start with some basics on the USFSPA and how it affects both active-duty and reserve retirement division.1 USFSPA allows states to treat disposable military retired pay2 as marital property or community property. Disposable retired pay is the total monthly retired pay to which a service member is entitled less amounts that are (1) owed by the member to the United States for previous overpayments of retired pay, (2) deducted from retired pay as a result of forfeitures ordered by a court-martial, (3) equal to the amount of retired pay waived to receive disability benefits, and (4) deducted because of an election to provide an annuity to a spouse or former spouse. It also allows some former spouses to receive their share of military retired pay directly from military finance centers.3 This circumvents the need to collect the percentage awarded directly from the service member.

Direct payment of retired pay awarded as property requires the following: the former spouse must be a “10/10/10 spouse,” which means that the marriage must overlap with 10 years of service creditable toward retirement; the court order must provide a specific dollar figure or specific percentage of disposable retired pay; and the order must show that the court had jurisdiction over the service member. For all direct payment orders, there must be a final decree of divorce, dissolution, legal separation, or court approval of a property settlement agreement and a statement in the order that the rights and protections afforded by the Servicemembers Civil Relief Act rights were observed. The USFSPA also allows some former spouses to continue to receive military benefits (health care, commissary, base exchange privileges).4 Finally, it allows former spouses to be designated as Survivor Benefit Plan (SBP) beneficiaries. SBP allows retired members (both active duty and reserve) to provide continued income for designated beneficiaries after the retiree’s death through an annuity.5

The USFSPA does not require courts to divide military retired pay or establish a formula or award a predetermined share of military retired pay to former spouses.6 There is no federal right to a portion of military retired pay; rather, state law controls whether and how much to divide military retired pay. Further, contrary to popular belief, the act does not require a 10-year overlap between marriage and military service. (This mistaken notion comes from the requirement of overlap between military service and marriage for the distribution of retired pay directly from the military finance center.) However, some states require that the military retired pay be “vested” in order to be divided pursuant to a property settlement.7 For military members, a pension is “vested” when the member has performed 20 years of qualifying service, either active duty or reserve duty or a combination of both. Finally, most states require that they have jurisdiction over the divorce proceedings and distribution of property.8

Jurisdiction is another interesting issue. Military members are reassigned and who has control over the divorce, and resulting property division, can be a moving target. The USFSPA provides that if retired pay is divided in a property settlement, jurisdiction is limited to jurisdiction based on domicile in the territorial jurisdiction of the court, residence within the state other than because of military assignment, or consent to jurisdiction. Jurisdiction is an important issue with military retiree groups as well, particularly given the argument that spouses can forum shop to get the best result. Therefore, as long as my husband (in my hypothetical divorce) picks the right state in which to file for divorce and can establish jurisdiction in that state, he would be entitled to petition the court for an award of a portion of my reserve retirement as part of our property settlement. He also could collect his portion directly from the finance center and petition to be listed as my SBP beneficiary.

Kuenzli v. Kuenzli: How Much Would My Husband Collect?

Exactly how much would my husband get? The standard active-duty formula, followed in the majority of states, is called the “time rule” formula.9 This formula takes into consideration the length of overlap between the marriage and the military service time in proportion to the total amount of military service. Generally speaking, the time rule formula gives the former spouse 50 percent of the pension times the actual retired pay, which is multiplied by the marital fraction (years of marriage during military service). The “time rule” formula recognizes that the former spouse’s contributions during the marriage permitted the service member to build the “foundation” for his/her career such that the former spouse should benefit from the increase in rank and subsequent retirement pay. Another variation, typically called the “frozen accrued benefit,” only considers the rank and time in service at the time of the divorce or separation and “freezes” the benefits as of that date. This approach is intended to not reward the former spouse for the time served or rank achieved after the divorce and/or create an incentive to the service member to not serve longer than retirement eligible in order to limit the distribution to the former spouse.

When it comes to the division of reserve and/or guard retirement, there are two things that need to be considered. First, because reserve members do not generally begin to get paid until age 60, regardless of when they retire and stop accumulating points, this deferral needs to be taken into consideration when making division decisions. Second, the “marital fraction” is different for reserve members. Reserve members typically have spent some time on active duty in addition to their reserve time. Each year of active duty is counted as 365 points towards retirement, while each year as a reserve member is calculated solely by virtue of how many days or “points” the member accrues in that year. All of this time, including all of my active duty and reserve points, is converted into “points towards retirement.”10 As a result, when dealing with a reserve retirement, the question should be how many points, not how many years, the member accrued during the marriage. Although this would seem to be an easy solution, this becomes difficult when state law interacts with federal law. Some states recognize the use of points for dividing pensions, but some states only allow a “time rule” for the marital fraction, applying an active-duty formula to a reserve retirement.11

Let’s assume the demise of my marriage occurs this next year. I will have four years of active-duty service and 16 years of service in the Air Force Reserve. Assume that I married my husband when I left active duty. To calculate the “marital fraction” using points, we started counting the points I accrued while on active duty, which is 4 times 365, to get 1,460 points. Then we have to count my reserve points. Assume that I acquired 60 points a year for 15 years, or 900 points. Thus, my total points at 19 years are 2,360 [1,460 + 900], of which 900 (or about 38 percent) are marital. This should mean that 38 percent of my retirement pay is marital and subject to division. However, if we apply the “time rule” for the marital fraction using just the fraction of my years of marriage to the years of service, 78 percent of my retirement would be marital. This is a huge difference. As a result, it is essential that the division of my reserve retirement pay consider my actual points versus just the total number of years of service. In addition, our example assumes that I have only accumulated 60 points per year.

Not all reserve years are the same and the member does not always accrue a consistent amount of points each year. There have been many years of my career when I have performed additional reserve duty and bumped up my total points for that year considerably to 200 or even 300 points. There have been other years when I have not volunteered for additional duty. Assuming all of my reserve years are marital, the differences between these years don’t affect his marital fraction. However, what if I performed a number of reserve years prior to our marriage? What if my husband and I divorce and I continue to perform reserve duties? The variations in the amount of points that I accumulate in each respective year needs to be considered as well. Much like the concern about the former spouse being rewarded for additional duty after the date of divorce for active-duty members, what incentive do the inequities in reserve years have to myself or my husband in terms of the amount that he will collect upon my retirement? Regardless of which calculation is going to be applied by the state court, and any variations in my years of service, my husband needs to request a summary of my points from the Point Credit Accounting and Reporting System to determine which is the best approach. Unlike for an active-duty member, the number of years that I have been a reserve member is not the only factor to consider in determining the percentage that he could be awarded. As you can see, my husband will hope that he is able to file for divorce in a “time rule” state as that would result in a larger portion of my reserve retirement being considered as “marital property” and I will hope that I can get a state that uses the points division theory to get jurisdiction. The difference could be substantial in what he would collect from my reserve retirement.

Recent Changes in the Law—Who Do These Help?

Concurrent Retirement and Disability Pay and Combat-Related Special Compensation

What if I have a service-connected disability? I can exclude my disability pay from being divided with my husband, right? As discussed above, under the original provisions of the USFSPA, courts held that the amount of my reserve retirement that I would waive in order to collect disability pay would be excluded from marital division.12 As more reserve members have deployed and we have a corresponding increase in service-connected disability and combat-related issues, the issue of disability pay has become a larger problem.13

There has been some relief for the former spouse from this apparent inequity in the National Defense Authorization Act of 2004 (NDAA).14 The NDAA provided for restoration of retired pay currently deducted from some retirees’ accounts due to their receipt of VA disability compensation.15 Concurrent Retirement and Disability Pay (CRDP) is awarded to members with 20 years of qualifying military service and a VA disability rating of at least 50 percent. CRDP is VA disability paid to the member in addition to full retirement pay. As a result, there is no requirement to waive corresponding retirement pay to receive CRDP. However, unlike regular disability pay, CRDP can also be divisible with a former spouse under a military pension division order. Nonetheless, all is not lost for me retaining as much of my reserve retirement as possible. Under Combat-Related Special Compensation (CRSC) pay, the effects of CRDP may be reversed.16 CRSC is an additional benefit that is paid to the service member with at least 10 percent of combat-related disability.17 CRSC is disability compensation, not retired pay. CRSC rates are based on the VA tables and increase with the number of the retiree’s dependents. Further, “combat-related” includes, by way of example, injury or illness resulting from actual combat, simulations of war (e.g., gas mask training, field training exercises, direct-fire training, and “confidence courses”), hazardous duty such as diving or parachuting, and instrumentalities of war (e.g., tanks, artillery, machine guns, military planes). As you can see from this definition, “combat-related” is a broad category that encompasses a large portion of service-related disabilities. However, in order to receive CRSC, you must waive a corresponding amount of military retired pay.

The important piece for my consideration is that CRSC cannot be divided with a former spouse. The further twist is that the service member cannot collect CRSC and CRDP at the same time and Defense Finance and Accounting Service is the one that makes the decision as to which is more beneficial to the service member, regardless of whether there is a distribution to former spouse.18 As a result, the service member typically wants as much of his or her disability rating to be combat-related in order to retain this portion of the retirement pay and not allow it to be subject to division. This can result in a very different calculation of the amount of retirement pay that could be awarded to my husband.

Early Reserve Retirement

The question of when a reserve/guard member was eligible to draw his or her retirement used to be easy to answer. The reserve member did not draw retirement, regardless of when he or she retired from the reserves and stopped performing duty, until he or she reached age 60. This would mean that my husband would not start collecting his awarded percentage of my retirement pay until I reached age 60. However, given revisions to NDAA in 2008, a new provision authorized the reserve retired pay age to be reduced below age 60 (but not below age 50).19 The reserve member accumulates this “early retirement” by performing 90 days of active duty during the same fiscal year. For each 90-day period the reserve member performs, the retirement age is reduced by three months. Most active-duty time qualifies, including training, operational support duties, and school tours. Also included is full-time National Guard duty served under a call to active service by a governor and authorized by the president or the Secretary of Defense under 32 U.S.C. § 502(f) for purposes of responding to either a national emergency declared by the president or a national emergency supported by federal funds.20

Effectively, this allows the reserve member to start to draw his or her retirement much earlier than age 60. As a result, a former spouse needs to determine whether the member has performed qualifying service that will result in an earlier retirement by getting copies of the completed and certified orders and determining whether the service is qualifying. As discussed above, those years that I have performed 200 or 300 days of qualifying tours can make a big difference in when I will start to draw my retirement. Regardless, my husband is going to need to do some research into my orders and figure out when I am retirement eligible under these new provisions. His portion of my retirement pay may not be that far away.

Drastic Changes to USFSPA coming in 2017?

The 2017 Department of Defense Appropriations Bills from both the House and the Senate21 have similar provisions that would drastically change the application of the USFSPA by some states. The proposals would require all military pay to be divided according to the rank and years of service at the time the division order is finalized. The House Bill provides that “the division of property” under the USFSPA is “to be determined using the member’s pay grade and years of service at the time of the court order, rather than member’s pay grade and years of service at the time of the retirement, unless the same.” This would eliminate the ability for the former spouse to “benefit” from the additional time in service after the divorce. For active-duty members, as you might imagine, this could cause lots of issues, especially when the military member has not yet retired. The former spouse could demand immediate payment, in those states that allow immediate payment, as there is no incentive for the former spouse to wait until the member actually retires as there is no additional rank or time-in-grade advantage to waiting.

Unfortunately, there is no indication that reserve members are either included or excluded from these provisions but by applying the general practice of application of all USFSPA provisions to reserve members would seem to indicate that this would apply to reserve members as well. For the reserve retiree, this limits the ability for the former spouse to “benefit” from the additional time and additional rank accumulated after the divorce but before retirement filing. This also highlights why, in my case, I would need to clearly identify the number of points that I have accumulated in each of my reserve years in order to ensure that my husband only gets the portion of my reserve points that apply to the years that we were married. My future additional duty and/or margarita days should not affect the amount that he would collect.


As I mentioned in the introduction, I am hoping that Kuenzli v. Kuenzli remains a hypothetical forever. I have plans to spend the rest of my life with my husband. However, now when I brief new active-duty JAGs on the provisions of the USFSPA, the briefing isn’t as one-sided as it once was. The ability of my husband to collect a significant portion of my reserve retirement is a reality that I cannot ignore or restrict to the importance of a footnote.


1. 10 U.S.C. § 1408 (2016); see generally Capt. Kristine D. Kuenzli, Uniformed Services Former Spouses Protection Act: Is There Too Much Protection for the Former Spouse?, 47 A.F. L. Rev. 1 (1999).

2. 10 U.S.C. § 1408(a)(4) (2016). The largest exemption from the amount considered as disposable retired pay is the amount waived to receive disability benefits. See, e.g., Mansell v. Mansell, 490 U.S. 581 (1989) (amount of retirement pay waived to receive veteran’s disability pay not divisible under USFSPA). But see infra “Concurrent Retirement and Disability Pay and Combat-Related Special Compensation.”

3. This is one of most attractive provisions of the USFSPA. 10 U.S.C. § 1408(d)(2) (2016). It is important to note though that direct payment of child support and alimony awards has no special requirements and is treated like any other lien on the member’s retirement. For general information on dealing with the Defense Finance and Accounting Service (DFAS), see Dep’t of Def., Financial Manager Regulation, DoD 7000.14-R, vol. 7B, Military Pay Policy and Procedures—Retired Pay (Nov. 2015) [hereinafter DoDFMR], ch. 29, Former Spouse Payments; chs. 42–46, SBP.

4.See, e.g., Kuenzli, supra note 1, at 44.

5. 10 U.S.C. § 1448(b)(2) (2016). Under the original SBP provisions, a member could designate a former spouse as an SBP beneficiary. In 1996, the USFSPA amended the SBP to authorize state courts to order members to designate former spouses as SBP beneficiaries. Defense Against Weapons of Mass Destruction Act of 1996, Pub. L. No. 104-201, § 634, 110 Stat. 2561 (codified at 10 U.S.C. § 1450(f)(3) (2016)). State law controls whether such an order will be issued.

6.See, e.g., Kuenzli, supra note 1, at 8.

7. Vesting is required in some states. See, e.g., Holaway v. Holaway, 70 Ark. App. 240, 16 S.W.3d 302 (2000); Dowden v. Allman, 696 N.E.2d 456 (Ind. Ct. Ap. 1998). Some states require a certain period of marital military service. See, e.g., Ala. Code § 30-2-51 (requiring 10 years of “pension service” by the spouse in order to divide military retirement). Other states don’t allow for division of any noncontributory pension plan. See, e.g., Delucca v. Colon, 119 P.R. Dec. 720 (1987) (noncontributory pensions treated as separate property not subject to division).

8. 10 U.S.C. § 1408(c)(4) (2016). The question then arises whether a general appearance constitutes “consent.” In the majority of states, a general appearance is tantamount to consent. See, e.g., Lewis v. Lewis, 695 F. Supp. 1089 (Nev. 1988); Seeley v. Seeley, 690 S.W.2d 626 (Tex. Ct. App. 1985); In re Marriage of Kildea, 420 N.W.2d 391 (Wis. Ct. App. 1988). By contrast, California says a nonresident member did not consent to California jurisdiction to divide military pension even though he consented to the court’s deciding dissolution, child support, and other property issues. Tarvin v. Tarvin, 187 Cal. App. 3d 56, 232 Cal. Rptr. 13 (1986).

9.See, e.g., Siefert v. Siefert, 82 N.C. App. 329, 346 S.E.3d 504 (1986); In re Marriage of Hunt & Raimer, 909 P.2d 525 (Colo. 1995).

10.See, e.g., In re Poppe, 97 Cal. App. 3d 1, 158 Cal. Rptr. 500 (1979); Hasselback v. Hasselback, 2007 Ohio 762, 2007 Ohio App. LEXIS 644 (2007); In re Beckman, 800 P.2d 1376 (Colo. Ct. Appl. 1990); Woodson v. Saldana, 165 Md. App. 480, 885 A.2d 907 (2005).

11. For an example of a “time rule” case involving reserve retirement, see Jordan v. Jordan, 2004 Va. App. LEXIS 285 (2004).

12. See supra note 2; see, e.g., Mansell v. Mansell, 490 U.S. 581 (1989) (amount of retirement pay waived to receive veteran’s disability pay not divisible under USFSPA).

13. The list of service-connected disability conditions can be found at

14. See supra note 2.

15. National Defense Authorization Act for Fiscal Year 2004, Pub. L. No. 108-136, § 631, 117 Stat. 1392 (codified at 10 U.S.C. §1414 (2016)). This was a phased-in program that resulted in full restoration of retired pay by January 2014.

16. DoDFMR, supra note 3, vol 7B, ch. 63, § 6306 (Sept. 2015).

17.Id. § 6308.

18. The practice note here is to draft a settlement so that any subsequent action by the member will not reduce the amount paid to the former spouse. See, e.g., Silent Partner, Military Pension Division: The Spouse’s Strategy, found at

19. National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 647, 122 Stat. 3 (codified at 10 U.S.C. § 12731 (2016)).

20. 10 U.S.C. § 12731(f)(2)(B).

21. H.R. Res. 4909 § 625, 114th. Cong. (2016). The same language is in S. Res. 2943 § 625, 114th Cong. (2016).