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MILITARY PENSION UPDATE

On December 23, 2016, President Obama approved the National Defense Authorization Act for Fiscal Year 2017. Simply put, a time based coverture fraction will no longer be accepted by the Defense Finance and Accounting Service. This has a significant impact on our use and drafting of Military Retired Pay Division Orders (“MRPDO’s) for those folks who are in the military and not retired.

The change in definition applies to any Order entered after December 23, 2016. In other words, for those military members who have not yet commenced benefits, there is no longer the option of dividing a military pension with a traditional coverture fraction. This is obviously opposed to case law in nearly every state, including Pennsylvania, espousing the use of this method.

DRO experts are widely suspending the drafting of MRPDO’s at this time. As of yet, the Department of Defense has not yet published revisions to appropriate Regulation and has not provided sample language for our use, which DRO experts are hoping for.

That’s about all we know at present. Hopefully this problem will be resolved promptly.

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