Are you searching for information regarding FERS and CERS in a Louisville divorce? Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CERS) coverage applies to more than 3% of the workforce here in Kentucky and across the nation. Most retirement plans fall under the Employee Retirement Income Security Act of 1974, more commonly known as ERISA. Retirement plans which are governed by ERISA require a “Qualified Domestic Retirement Order” or QDRO.
Just as in most types of retirement or pension plans, marital property division rules apply to FERS and CERS in a Louisville divorce. However, FERS and CERS are not governed by ERISA and must be managed by what is known as a Court Order Acceptable for Processing or COAP. The COAP must be precise and contain every variable in order for the Office of Personnel Management to be able to implement the order.
The former spouse’s share of a federal employee’s retirement plan must be expressed as either a percentage or fraction of the employee’s annuit, or a fixed amount. The COAP must include all information including the periods of service and pay rates. Most cases involve a “marital fraction,” where the former spouse would receive a specific portion of the employee’s annuity or refund of contributions. This reflects the years of the employee’s qualifying service during which the parties were married divided by the total years of service covered by the FERS or CERS plan.
When the former spouse’s benefit is expressed as a fraction, the COAP must also specify whether the benefit will be based upon gross annuity, net annuity or self-only annuity. There are complex differences between these options and the specific details of your own case will be decided during negotiations, mediation or at trial.
We realize that the topic of retirement plans such as FERS and CERS in a Louisville divorce is a lot of alphabet soup, but it’s potentially the most expensive soup you could ever purchase. Retirement accounts often represent the largest net asset(s) of the parties. One mistake in any order which divides a retirement account in a divorce could literally cost you hundreds of thousands of dollars. This is why you need the proven, experienced divorce and family law attorneys at Dodd & Dodd.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.
