MILITARY PENSION DIVISION: THE SPOUSE’S STRATEGY

Introduction: SILENT PARTNER is a lawyer-to-lawyer resource for military legal assistance attorneys and civilian lawyers, published by the Military Committee of the American Bar Association’s Family Law Section. Please send any comments, corrections and suggestions to the address at the end of this Silent Partner. There are many SILENT PARTNER infoletters on military pension division, the Survivor Benefit Plan and other aspects of military divorce. Just go to www.abanet.org/family/military (the website of the above committee) or www.nclamp.gov (the website of the military committee, N.C. State Bar).

Introduction

The battlefield in military divorces is often military pension division. An overview is contained in the Silent Partner, Military Pension Division: Scouting the Terrain, and the topics below expand that advice to help the pension recipient (servicemember or retiree) to cut corners, save money, and reduce or eliminate benefits for his (or her) spouse or ex-spouse.

While many servicemembers (SMs) are vociferous in their resistance to division of the military pension, it is important to remember and to remind the client of the cost of an aggressive and unyielding defense. Once they know the odds and the costs, few clients have the will or the wallet for diehard resistance. Few want to risk what’s at stake in visitation, child support, alimony and other matters in a case that could be settled, just to engage in “nuclear warfare” regarding the pension. All states allow military pension division. As will be outlined below, only a few U.S. jurisdictions limit military pension division based on years of service or years of marriage. The job of a good attorney is to guide the client with sage advice and serious judgment, rather than to be pulled along blindly by a client who wants to “set a precedent” – usually (as clients state it) “for the principle of the matter.” Is it worth it? Will it help the client with the rest of his or her case? Advice and guidance for the “big picture” is the task of the lawyer who is serious about helping military pension division clients.

ADDITIONAL NOTE: There were several new developments in 2016-2018 regarding military pension division. Be sure to read the Silent Partner infoletters on the Frozen Benefit Rule at www.nclamp.gov (For Lawyers), as well as “The Blended Retirement System and Divorce,” and “The Death of Indemnification.” These will add context and new information to the text below.

Roadblocks and Minefields

Our client in this example is Army Colonel John Doe. He’s been in the Army 20 years and now he’s going through a divorce. He wants to know how to stop Mrs. Jane Doe from getting the courts to divide his military pension rights. He also wants to know his maximum exposure in the event she succeeds.

To advise him fully, we need to first look at the roadblocks and minefields that may be placed in Mrs. Doe’s way, blocking the division of her husband's military retirement rights. The following potential obstacles should be discussed with COL Doe.

Minimum Contacts. A state court will often require more than just the residence of the spouse, servicemember, retiree or former spouse within its borders. In a 1991 California case, Marriage of Tucker, the husband objected at the outset to the division of his military retired pay in that state, claiming that he was not domiciled there and the marriage had never existed there, thus depriving the court of the power to divide the pension. The appellate court agreed with him and, finding that the husband had not entered an appearance as to pension division and consented to it, the court refused to make the division.[i]

Nonvested or Nondivisible Pension Benefit. There are only a few jurisdictions which provide that, by law, a military pension may not be divided. These fall into the following categories: two states where there is a “vesting requirement” and one jurisdiction which bars division of any non-contributory pension plan.

A pension is vested when the employee is entitled to receive something upon termination of employment, whether that is in the form of a return of contributions, regular retired pay or an early (and reduced) retirement benefit. A service member with 11 years of service, for example, would not have a vested pension because there is no right to retire after 11 years’ service. A member with 25 years of service, on the other hand, would clearly have a vested retirement benefit.

There are two states, Indiana[ii] and Arkansas,[iii] which limit court jurisdiction over pension division to those pensions which are “vested.”

A third jurisdiction, Puerto Rico, does not allow the division of noncontributory pensions at all. Puerto Rico treats these pension rights as separate property.[iv] Thus a military pension would not be divisible there although the Thrift Savings Plan, being contributory, would be divisible by the courts.

There may be several states which could divide COL Doe’s military pension. To minimize his exposure, COL Doe may want to "shop around" for a jurisdiction that will either limit pension division (through a vesting requirement), bar pension division entirely (Puerto Rico) or will otherwise allow military pension division on the best terms for him. COL Doe can employ these divisibility provisions to his advantage in the pension division litigation. If he is stationed in Indiana, for example, he might decide to become domiciled there and then file for divorce in that jurisdiction so as to exclude his pension benefit from division. In like manner, Mrs. Doe and her attorney will want to examine each jurisdiction where she might be able to file for division of COL Doe’s pension to see whether the laws there allow such division.

It is impossible for any individual attorney to know each of these state rules. To find out the rules in an individual state, contact a lawyer there who specializes in family law and divorce.

The importance of this point for Mrs. Doe’s attorney is that it is vital to shop around for the jurisdiction that will allow military pension division on the best terms for Mrs. Doe. For COL Doe, the opposite approach would apply; he needs to find a jurisdiction which can hear his case but will deny the division of his pension. How to go about this forum-shopping, which is implicitly allowed by the triple jurisdictional approach of 10 U.S.C. § 1408(c)(4), is found below.

Federal Jurisdiction. If a state does not have jurisdiction under federal law, then that state may not divide COL Doe’s pension, regardless of his wife's wishes. As set out in the USFSPA, 10 U.S.C. § 1408 (c)(4), a state may only exercise jurisdiction over a military member's pension rights if:

• That state is his or her domicile; or
• The member consents to the jurisdiction of the court; or
• The member resides there for reasons other than military assignment.

These statutory provisions are explained in detail in the Silent Partner, Military Pension Division: Scouting the Terrain. They are limitations on pension division which exist in addition to traditional state long-arm statutes, which allow the exercise of jurisdiction consistent with due process if there are sufficient minimum contacts with a state.

How can the SM use these to his advantage? The primary way is not to allow “jurisdiction by consent” to pave the way to division of his pension if he has truly decided on a course of complete resistance. This might involve one of the next two approaches.

Meritorious Issue. Assume that COL Doe is domiciled in a state where division of the pension is limited or barred (e.g., Arkansas), and his wife has sued him in a state that has no such limits on pension division. In this situation, his not consenting to military pension division could save his pension.

Due to the complexity of this subject, is to be sure he has skilled counsel in both jurisdictions. Don’t even try to get a continuance while he’s “out in the field” without advice from trained and experienced co-counsel. The issues and tactics are too difficult for the average JAG officer or civilian attorney, and it isn’t worth your professional reputation (or malpractice liability) to try to disprove this. Seek out competent co-counsel, as your state rules of professional conduct require. Contact a consultant or an expert witness who can provide the due diligence and the extra margin of safety.

Even then, don’t assume you’re “out of the woods” with the pension being defined as non-divisible. The court may decide that, because such a large asset is not divisible as marital or community property, the rest of the property should be divided unequally in favor of the nonmilitary spouse in order to compensate for this inequity.[v]

Bluff. COL Doe may want to make sure that his wife has to expend the maximum amount of money to get a piece of his pension. He may want to ensure a fight in two states – State #1 (the state of suit) and State #2 (the state of his domicile) – to try to get her to back down. He may be convinced that she won’t spend the time or money to try to get counsel in State #2 to ask for a share of the pension, which means that you may have to do some hard bargaining to adjust the property division in light of his pension not being divided. Counsel for Mrs. Doe would certainly want some concessions on other matters in exchange for not pursuing the military pension.

Type of Pension

The pension rights contemplated by USFSPA (the Uniformed Services Former Spouses’ Protection Act) involve non-disability "longevity retirement", not retirement for disability under Title 10, Chapter 61, or VA disability compensation under Title 38. In Mansell v. Mansell [vi]the U.S. Supreme Court in 1989 held that at the time of divorce, a court may divide only “disposable retired pay” as that term is defined in USFSPA, and that is what the retired pay center[vii] will allocate in a pension garnishment for property division. Disability pay is a complicated issue. A member’s case may involve two different systems for disability benefits.

Military Disability Retired Pay. Military disability retired pay is available for those members who are sufficiently disabled that they cannot perform their assigned duties. If a member has enough creditable service, he or she may be placed on the disability retired list and may begin to draw disability retired pay. When a SM is rated as disabled by the uniformed services, that means that he is unfit to perform his duties consistent with his rank and position. If the military disability rating (not the VA disability rating) is 30% or more, or if the member has at least 20 years of creditable service, the SM will be able to retire with military disability retired pay.

The SM’s amount of disability retired pay would be based on two different calculations of pay, with the SM deciding which one to accept. There are three steps to this process. For the purposes of this example, assume that the SM has an active duty base pay of $3,000 per month, 20 years of creditable service and a disability rating of forty percent (40%).

• Years of Service Calculation: The first step is to calculate the SM’s normal retired pay based on his years of service, which we will assume for this example is 2.5% times his years of service times his retired base pay (or “High-3”). The “High-3” is the average of the three highest years of compensation. Here we’ll just assume that his “High-3” is $3,000 a month. In this case, the net pay would be 2.5% X 20 years X $3000, or $1500.
• Percent of Disability Calculation: This calculation involves multiplying the SM’s retired pay base times his disability rating. This is achieved by multiplying $3,000 by 40%, or $1,200.
• Result: The SM would probably choose to receive the higher of these two amounts ($1500 per month in military disability retired pay in this example).

When the higher of the two amounts is based on percent of disability, no amount is divisible. If the higher is based on years of service, then USFSPA makes divisible only the amount of pay that is the difference between the two above amounts, that is, the difference between the SM’s gross disability retired pay and his disability pay based solely on the disability rating. In this example, the difference is $1,500 minus $1,200, or only $300 as divisible military retired pay. Thus although the SM’s former spouse might be entitled to half of $1,500, or $750 per month as her spousal share of military pension rights, a disability retirement as shown in the above example would yield only half of $300, or $150 per month for her share of the pension. Her attorney should consider a provision for the agreement -- whether consent order or separation agreement -- that protects her interest in her husband’s pension against a possible disability retirement in the future. This is discussed in the Silent Partner, Military Pension Division: The Spouse’s Strategy.

VA Disability Benefits. A second system of disability retirement benefits is administered by the Department of Veterans Affairs (VA). Even if COL Doe’s disability is not such as to qualify him for military disability retired pay, he might still elect to receive monthly payments from the VA. He can even elect VA disability pay when he’s receiving military disability retired pay! To qualify for disability compensation from the VA, he would need to waive an equivalent amount of his military retired pay. Almost all retirees who can make this election do so. Why? There are two distinct benefits for the military client who is contemplating a divorce:

• While taking this option doesn’t provide an increase in gross income, it does yield a net increase in pay since the VA portion of the SM’s compensation is tax-free. Thus if the SM’s pension (without disability) were $1,600 per month and his disability were evaluated as equivalent to $600 per month in VA benefits, he could waive the same amount of taxable longevity pension in order to receive this amount with no taxes on it. His monthly benefits would still total $1,600, but only $1,000 of this would be subject to taxes if he makes this choice.
• In addition, the VA benefit is not subject to division. Only the longevity-based portion of the pension is divisible in divorce court.

This latter “benefit” for the SM was the issue involved in the Mansell case.[viii] The Supreme Court, after reviewing the history of McCarty and USFSPA, proceeded to define the problem as one of statutory interpretation of 10 U.S.C. § 1408(c)(1), which allows the division of military pensions, and Section 1408(a)(4)(A), which exempts VA disability benefits from “disposable retired pay.” While the courts are allowed to treat disposable retired pay as community or marital property, the Supreme Court stated that – at the time of divorce – they were not allowed to treat all retired pay as such, only disposable retired pay. Thus the Court ruled that states are preempted from dividing at divorce the retired pay that a retiree has waived to receive VA disability pay. As the statute now reads, both these types of disability benefits are exempted from division to the extent stated above:

“Disposable retired pay” means the total monthly retired pay to which a member is entitled less amounts which... (ii) are deducted from the retired pay of such member as a result of … a waiver of retired pay required by law in order to receive compensation under… title 38; (iii) in the case of a member entitled to retired pay under chapter 61 of this title [10 USC 1201 et seq.], are equal to the amount of retired pay of the member under that chapter computed using the percentage of the member’s disability on the date when the member was retired (or the date on which the member’s name was placed on the temporary disability retired list).[ix]

Congress has taken steps to modify the VA waiver requirement by allowing simultaneous receipt of both forms of payments – retired pay and VA disability compensation – for certain retirees. The statute is found at 10 U.S.C. § 1414, and the restoration of retired pay is known as Concurrent Retirement and Disability Pay, or CRDP. For those with at least 20 years of qualifying military service and a VA disability rating of at least 50%, CRDP eliminates the VA offset to retired pay. The disability does not have to be combat-related. These retirees are entitled to full retired pay and full VA payments.

Combat-Related Special Compensation (CRSC) is another form of tax-free disability pay. It’s found at 10 U.S.C. § 1413a, and it includes those who have a disability of at least 10% directly related to the award of the Purple Heart decoration or related to combat, operations, instrumentalities of war or hazardous duty.

The rules are much more complicated than the brief overview given here. For further information, see the Silent Partner, Military Pension Division: The ‘Evil Twins’ – CRDP and CRSC.

Dividing the Military Pension—Crossing the Minefield

Overview. Once it is understood how to set up obstacles to pension division, the next step should be to understand how to overcome them and divide the pension once the court has acquired jurisdiction over it. There are generally two methods available for pension division.

The first is deferred division, often called if, as and when payments, which refers to shared payments when the retired SM starts receiving his pension. This is the most common way of allocating the pension between the spouse and SM. In the usual situation, a share of the SM’s pension is paid to the former spouse (FS). This can be done by the retired pay center through garnishment if the marriage and the length of service overlap by at least 10 years; otherwise the payment must be made by the SM.

The second involves a present-value offset, in which property or money is traded against the present value of the pension. For example, the house and other property might go to Mrs. Doe and COL Doe would receives the pension, if they are approximately equal in value. Both of these topics are covered in the Silent Partner, Military Pension Division: Scouting the Terrain.

Deferred Division

When dividing the military pension on a deferred division basis, there are four separate ways to make the division that the retired pay center will accept for direct payments to Mrs. Doe. These four methods are set out in the pension division regulations.[x] They are explained in detail in the Silent Partner, Getting Military Pension Division Orders Honored by the Retired Pay Center.

Fixed dollar amount. A fixed dollar clause might read: Wife is awarded $550 per month, payable from Husband’s retired pay.

Percentage clause. A percentage clause might state: Wife is granted 40% of Husband’s disposable retired pay.

Formula clause. This is an award expressed as a fraction or a ratio, and it is usually employed when a SM is on active duty (or a member of the National Guard or Reserves and is still drilling). It might read: Wife shall receive 50% of the Husband’s disposable retired pay times a fraction, the numerator being the months of marital pension service, and the denominator being the total months of service by Husband. The court must then provide the numerator, which is usually the months of marriage during which time the member performed creditable military service. In Guard/Reserve cases, when the member is still drilling, this fraction must be expressed in terms of retirement points, not time.

Hypothetical clause. This is an award based on a rank or status which is different from that which exists when the servicemember retires. For example, the order might say: Wife is granted 40% of what a major would earn if he were to retire on January 31, 2022 with 18 years of military service and a retired pay base of $7,200 per month. This is often used when state law requires that the share of the pension awarded to the spouse be determined according to the grade and years of service of the member at a specific date, such as the date of divorce or of separation (see below). This is the most complicated of the four, and the attorney should pay careful attention to the tips and terms set out in the Silent Partner, Military Pension Division: Guidance for Lawyers.

For COL Doe, the most advantageous way to allocate the pension is through the fixed dollar amount. That’s because this does not grant Mrs. Doe a COLA (cost-of-living adjustment) each year. The fixed dollar amount simply excludes a COLA – it’s outside the definition of fixed dollar amount, in other words. The other three clauses automatically include COLAs.

The Marital Fraction

Assume that COL Doe is on active duty and has 20 years of creditable service. He has been married for all 20 years. He tells his lawyer, who is inexperienced in military pension division, that he is willing to give his wife half of his pension, either because that seems fair to him or it appears to be inevitable under state law. The lawyer, taking him at his word, proceeds to draft a clause for pension division which is worded as follows:

Husband shall pay to Wife fifty percent (50%) of the disposable retired pay that he receives from the Defense Finance and Accounting Service at retirement.

Are there any problems with this wording?

At least from COL Doe’s point of view, the answer is yes. The clause fails to take into account the marital fraction and future military service. Defined by state law, the “marital fraction” is usually the number of years of marital pension service divided by years of total pension service.[xi] This fraction reflects the fact that COL Doe will probably continue on active duty and acquire additional retired pay due to those years. These are not “marital years”—they are years after the separation or divorce. There also may be years of military service before the parties married, and these non-marital years must also be taken into account.

The way to do this is with the marital fraction. In reality, Mrs. Doe is not entitled to half of the pension; she is only entitled to half of the marital share of the pension. The above clause gives Mrs. Doe too great a share.

Dividing Disposable Retired Pay

What is it that the courts divide – gross pay or net pay? USFSPA specifies that the court at the time of divorce can only divide disposable retired pay.[xii] The U.S. Supreme Court upheld this requirement in the Mansell decision. According to 10 U.S.C. § 1408(a)(4)(A), "disposable retired pay" means gross retired pay minus:

• recoupments or repayments to the federal government, such as for overpayment of retired pay;
• deductions from retired pay for court-martial fines or forfeitures, or such amount required by law to be waived to get VA disability compensation;
• military disability retired pay as calculated using the percentage of disability; and
• Survivor Benefit Plan premiums.

Note that VA disability payments are deducted from gross pay in order to arrive at "disposable retired pay." Thus a retired SM can waive receipt of retired pay to receive an equivalent amount of VA disability compensation, and these latter benefits will be received tax-free. This tactic can be used by a military member to reduce the portion of retired pay that is divisible with one’s former spouse. And there’s no way to stop a SM from taking disability pay! This topic is covered more fully above at VA Disability Benefits and in the Silent Partner on CRSC and CRDP.

Reserve and National Guard Pension Rights

There are three key considerations in dividing Guard/Reserve retirement rights.

• First, Guard and Reserve personnel generally do not begin to get paid until age 60 (regardless of when they apply for retirement); therefore this deferral of payment must be taken into account in the negotiations and the present value calculations.
• Second, the pension can be calculated in two ways to determine the best outcome for the client – using months of military service and then again using retirement points.
• The third point involves Guard/Reserve personnel who are still drilling. A pension division clause for these SMs usually involves a formula to determine the marital share of the pension, which is then divided with the FS. Such a formula must be expressed in terms of retirement points, not months or years, to be acceptable to the retired pay center.

A fuller explanation of Guard/Reserve retired pay is found in the Silent Partner, Military Pension Division: The Spouse’s Strategy.

Survivor Benefit Plan

After the battle comes caring for the survivors. The equivalent of this in the area of military pension division is deciding what to do if the SM dies before the FS. Since the military pension ends when the SM dies, the Survivor Benefit Plan (SBP) is the usual issue at stake. This survivor annuity is a means of continuing monthly payments to the former spouse who survives.

The Survivor Benefit Plan pays a specified beneficiary 55% of the selected base amount when the SM dies. This topic is covered in detail in the Silent Partner, Military Pension Division: Scouting the Terrain. The cost in active-duty cases is 6.5% of the base amount, paid out of the pension; in Guard/Reserve cases, it’s about 10% if the SM selects immediate coverage for a spouse or former spouse.

The best SBP option for the SM is, of course, silence. If no one says anything about SBP and the settlement is worded properly, then COL Doe won’t have to elect SBP coverage. This will save him money and also retain the option for a remarriage and a new wife, if that’s in his future. SBP cannot be divided between current and former spouses. There can only be one adult beneficiary. There are other options for COL Doe, however.

Life Insurance. If there is a discussion about SBP, then his attorney would want to deflect the conversation into death benefits in general, of which life insurance is the most obvious choice. Life insurance for Mrs. Doe would probably be cheaper than the SBP premium, and insurance has the advantage of paying Mrs. Doe in a lump-sum cash amount at his death, rather than doling out monthly payments to her. Life insurance payments are tax-free, unlike the payments from SBP. If there’s a dispute, offer to split the cost with Mrs. Doe – each will pay half the life insurance premium.

Put a Present Value on the Benefit. Since the former spouse, Mrs. Doe, is the sole beneficiary of this survivor annuity, COL Doe feels that it’s only fair that she should be charged with the total value of the SBP in dividing marital property. Hiring an expert to value the SBP which Mrs. Doe will receive is the key to this strategy.

An example of a survivor annuity evaluation can be found in a 1998 Pennsylvania case, Palladino v. Palladino.[xiii] In this divorce case, the judge found that the wife had requested that the husband elect survivor annuity coverage to continue payments to her if he died before she did. The expert witness who valued the survivor annuity determined that it had a present value of about $57,000.

The judge ruled that the survivor annuity, which derived from the husband's civilian pension, had a value independent of the pension's value, the wife had elected to receive the survivor annuity, and therefore she should be charged with the value of the survivor annuity as an asset in equitable distribution. The court decided that $57,000 was the proper value of the survivor annuity which ought to be charged to the wife. The survivor annuity was found to be marital property.

Upon an appeal by the wife, the Superior Court affirmed the trial court's decision. This meant that the wife did not get any of the husband’s pension; she only received the survivor annuity. Thus the husband received a fair distribution (not a windfall) regarding his pension; he kept the entire payment, simply because his ex-wife insisted on getting the survivor annuity. His monthly pension was cut by about $80 monthly to pay the survivor annuity premium.

Palladino represents a case in which the trial judge did the right thing, that is, valued the survivor annuity at the equitable distribution hearing. A 2010 case from Oregon, Forney and Forney, represents the opposite situation, a judge who refused to value the survivor annuity and whose ruling was reversed by the appellate court. In this military case, the expert witness valued the Survivor Benefit Plan at $84,855. The trial court refused to place a value the asset.

The Oregon Court of Appeals decided otherwise, stating:

In addition to the military pension itself, however, there is also wife's survivor annuity on that pension. That annuity, acquired by the parties during the marriage, is a marital asset. As we held in Miller and Garren, 208 Ore. App. 619, 623, 145 P3d 285 (2006), a survivor's annuity is analogous to an unvested pension and is subject to  [9] valuation and the court's disposition on dissolution. Although it is possible that wife could die before husband and never see the benefits from the annuity, in light of the 18-year disparity in their ages, it is likely that wife will survive husband. As in Miller, the parties' expert in this case took into account the contingency of wife's survival when valuing annuity. Wife is the only beneficiary of the survivor annuity, and it will provide her with income for many years. We conclude that it is appropriate to take wife's survivor annuity into account in the property distribution and that the trial court erred in failing to do so. As we have noted, the present value of wife's survivor annuity is $84,855. That value should be assigned to wife in the property division.[xiv]

The end result of the Forney case was that the Court reversed and remanded for a new judgment allocating the entire value of the Survivor Benefit Plan to the wife for the purposes of equitable division.

Lower Base Amount. When you can’t dissuade the other side from SBP, then consider the selection by COL Doe of a base amount that’s lower than his full retired pay when he’s not been married to Mrs. Doe the entire term of his service. After all, does it sense to him that she should get 55% of his full retired pay when he dies if she was only married to him for 10 of the 20 years he served? In this situation, with her pension share at half of 50% of his retired pay (or 25%), she should get the same dollar amount at his death, not 55% of his full retired pay. This is sometimes termed a “mirror award” – the death benefit mirrors the life benefit.

If possible, reduce the base amount selected so that her SBP benefit reflects the same percentage as her share of the military pension.[xv] You’ll also be saving COL Doe money because the premium will be lower. Note that there are only limited time when the match can be made, however. The problems that exist in trying to establish a mirror award are set out in the Silent Partner infoletter (for lawyers) and the LEGAL EAGLE handout (for clients) on this subject.

Who Pays the Premium? COL Doe might say, “Why doesn’t my wife have to pay for SBP? After all, she wants it! I’ll be dead and gone by the time she gets it. She should have to pay the premium.” Unfortunately for the SM, it doesn’t work that way with the retired pay center. You can submit as many orders as you want – signed by judges, certified by clerks and approved by the highest court you can find – and they’ll still pay no attention if you try to shift the premium payment to Mrs. Doe by telling the pay center to take the premium out of her share. The retired pay center will refuse to do it since the SBP premium, according to USFSPA, comes off the top before determining disposable retired pay. This results in the parties both paying the SBP premium in the same ratio as their share of the military pension is divided.

But the same thing can be accomplished by adjusting the percent that Mrs. Doe receives. Here’s how:

• Figure out what dollar amount Mrs. Doe would get each month as pension division, multiplying her spousal percentage times the gross retired pay of the member.
• Then figure out the dollar amount for the SBP premium. Use 6.5% except for Guard/Reserve members who choose immediate coverage at the 20-year point. This is multiplied by the member’s retired pay unless a lower amount has been – or will be - selected).
• Then subtract this from Mrs. Doe’s dollar amount (or anticipated dollar amount). This yields her spousal share less the SBP premium.
• Next divide this figure by the disposable retired pay (gross pay less SBP premium and VA waiver, if any) of COL Doe and multiply it by 100.

The result is the percentage of his retired pay that she would get with her paying for SBP. You’ve effectively shifted the premium payment to her by reducing the percentage of retired pay that she receives, assuming there are no other deductions from gross pay, such as a disability pay waiver or money owed to the federal government.