Federal Government employees and their spouses who reside in Maryland face different hurdles when going through the divorce process. Special care is required to assure that the “ends justify the means” of the Maryland Property Divorce Settlement. The issues that have to be skillfully dealt with include:
- Retirement Benefit Court Order
- Pension Offset or Sharing
- Health Insurance
The Retirement Benefit Court Order is the document that is required to have an employee’s TSP split with his or her ex-spouse. The TSP has different rules than those of the private sector’s companies’ QDRO, including it will only review a “complete” copy of the court order.
Can a Federal employee keep 100% of his or her pension benefits? Although there are different rules on splitting pensions in divorce, government employees may be able to use the “offset method” to keep their future retirement benefits intact.
One of the prized benefits of Federal employees is their health insurance plans. The loss of coverage under the Federal Employees Health Benefits Program (FEHBP) can be expensive and potentially devastating to a spouse whose soon to be ex-husband or ex-wife is a Federal employee.
Although a former spouse can apply for Temporary Continuation of Coverage (TCC), there are also a Spouse Equity provisions that enable a former spouse to maintain their coverage beyond the 36-month window. This is extremely important for those who may have insurability or other issues that would make coverage unlikely or impractical under the circumstances.
John Faggio is a CPA and Maryland divorce financial planner who has extensive knowledge of and experience in dealing with Federal employee benefits. Email or call John now at 410-988-7333 if you are contemplating or are in the divorce process.