For generations, the cornerstone of military retirement planning was the defined benefit pension – the promise of a reliable monthly check for life after 20 or more years of dedicated service. This traditional system, often called the “High-3” or “Legacy” retirement system, heavily influenced how military families planned their financial futures and, consequently, how assets were divided during a divorce. The pension was typically the largest single asset, and negotiations often revolved around securing a fair share of that future income stream.
However, for service members who entered the military on or after January 1, 2018, and for many who opted in during 2018, a new system governs their retirement benefits: the Blended Retirement System (BRS). This system fundamentally changes the landscape, blending a reduced defined benefit pension with significantly enhanced emphasis on the individual service member’s Thrift Savings Plan (TSP) account, including automatic and matching government contributions.
This shift is not just a minor tweak; it represents a seismic change in how military retirement wealth accumulates. For couples divorcing under the BRS, the financial dynamics are vastly different than under the High-3 system. The TSP is no longer a secondary consideration; it often becomes a primary marital asset, potentially worth hundreds of thousands of dollars, requiring meticulous attention to valuation, vesting schedules, and division procedures. Understanding which retirement system applies to the service member spouse and how that system impacts asset division under Florida law is absolutely critical. Failing to grasp these differences can lead to significant financial oversights, leaving one party severely disadvantaged. Navigating this new terrain requires up to date knowledge and strategic planning, underscoring the importance of working with a Tampa military divorce lawyer who is fluent in both systems.
The Old Guard: Understanding the High-3 (Legacy) System
For service members who entered before 2018 and chose not to opt into BRS, the High-3 system remains in effect. Its primary feature is a defined benefit pension.
- Pension Calculation: After completing at least 20 years of creditable service, the retiree receives a monthly pension calculated as: (Years of Service) x 2.5% x (Average of Highest 36 Months of Base Pay)
- TSP Component: While members under High-3 could contribute to their TSP, there were no automatic or matching government contributions. The TSP balance typically consisted only of the member’s own contributions and their associated investment earnings. As a result, the TSP was often a smaller asset compared to the projected value of the lifetime pension.
- Divorce Implications (High-3):
- Focus on the Pension: The division of the military pension was the main event. Florida courts treat the marital portion (earned during marriage) as divisible property, usually applying a coverture fraction to the disposable retired pay (gross pay less VA waiver/SBP costs). Securing a share often involved complex negotiations over the percentage, valuation date, and Survivor Benefit Plan (SBP) coverage. A Tampa military divorce lawyer would dedicate significant effort to this aspect.
- TSP Division: The TSP, being smaller and containing only member funds, was still divided as marital property, but often involved less complex valuation and division procedures (still requiring a Retirement Benefits Court Order, or RBCO).
The High-3 system offered predictability but required long term service commitment to receive any pension benefit.
The New Standard: Deconstructing the Blended Retirement System (BRS)
Effective January 1, 2018, the BRS became the default retirement system for all new entrants. It combines elements of the old system with features common in civilian retirement plans, aiming to provide portable benefits even for those who do not serve a full 20 years. BRS has three main components:
- Reduced Defined Benefit Pension: Service members who complete 20+ years under BRS still receive a monthly pension for life, but the multiplier is reduced.
- Pension Calculation (BRS): (Years of Service) x 2.0% x (Average of Highest 36 Months of Base Pay)
- This 0.5% reduction in the multiplier means the BRS pension is 20% smaller than the High-3 pension for the same years of service and pay grade.
- Enhanced Thrift Savings Plan (TSP) with Government Contributions: This is the cornerstone of the BRS and where the significant shift occurs.
- Automatic 1% Contribution: After 60 days of service, the government automatically contributes 1% of the service member’s base pay to their TSP, regardless of whether the member contributes anything themselves.
- Matching Contributions: After two years of service, the government will match the service member’s own contributions dollar for dollar for the first 3% of base pay contributed, and fifty cents on the dollar for the next 2% contributed. This means a service member contributing 5% of their base pay receives a total government match of 4%, plus the automatic 1%, for a total of 5% in government contributions.
- Significance: This essentially provides “free money” from the government, dramatically accelerating the growth potential of the TSP account compared to the High-3 system.
- Continuation Pay: BRS offers a one time, mid career cash bonus (typically around 8-12 years of service) in exchange for an additional service commitment (usually 4 years). The amount varies by service branch and specialty.
BRS offers greater portability (service members keep their TSP funds even if they leave before 20 years) but places more responsibility on the individual service member to save and invest wisely through their TSP.
BRS vs. High-3: The Divorce Asset Landscape Transformed
The introduction of BRS fundamentally changes the financial picture in a Florida military divorce.
- Shift in Asset Value: Under High-3, the pension was the dominant retirement asset. Under BRS, the enhanced TSP account, fueled by years of 5% government contributions plus member contributions and market growth, often becomes equal to or even greater in value than the reduced defined benefit pension, especially for members divorcing mid career.
- TSP Becomes Central: The strategic focus during property division must shift. While the reduced pension still needs proper division (including addressing SBP), meticulous attention must now be paid to accurately valuing and dividing the TSP, including capturing the marital share of all government contributions. A Tampa military divorce lawyer must prioritize TSP discovery.
- Vesting Matters: Unlike member contributions (which are always owned by the member), the government’s automatic and matching contributions under BRS are subject to vesting schedules. This adds a layer of complexity to determining the divisible marital share.
Failing to recognize this shift and treating a BRS divorce like a High-3 divorce is a recipe for financial disaster, potentially leaving the non military spouse without a fair share of a massive marital asset.
Diving Deep: Dividing the TSP Under BRS in Florida
Because the TSP takes center stage in BRS divorces, understanding exactly how it is divided under Florida’s equitable distribution laws is crucial.
1. Identifying the Marital Portion (It Includes Government Money): Just like under High-3, the portion of the TSP accrued during the marriage (from date of marriage to date of filing/cutoff) is marital property. Under BRS, this marital portion includes:
- The service member’s own contributions made during the marriage.
- The government’s Automatic 1% Contributions made during the marriage (subject to vesting).
- The government’s Matching Contributions (up to 4%) made during the marriage (subject to vesting).
- All investment gains or losses attributable to the above marital contributions during the marriage.
- Any passive appreciation/depreciation on a pre marital balance occurring during the marriage.
Crucially, the government contributions made during the marriage are not a gift solely to the service member; they are treated as marital earnings subject to division. A knowledgeable Tampa military divorce lawyer will ensure these contributions are included in the marital pot.
2. The Vesting Hurdle: This is a key difference from High-3 TSP division. BRS government contributions have vesting requirements:
- Automatic 1% Contributions: Generally require the service member to complete two years of service before they become vested (meaning the member owns them even if they leave the military).
- Matching Contributions: Also generally require two years of service for vesting.
How Vesting Impacts Divorce Division:
- Only vested government contributions accrued during the marriage are typically considered divisible marital property.
- Timing is Everything: If the marriage is very short and occurs early in the service member’s career before they meet the two year vesting requirement, the government contributions made during that brief period might not be considered marital property because they were unvested and forfeitable.
- Example: Couple marries six months after the service member joins under BRS. They divorce one year later (18 months of service total). The automatic 1% contributions made during that year are likely unvested and thus may not be divisible. However, if they divorce after the member has completed 2.5 years of service, the government contributions made during the marriage would be vested and divisible.
Determining vesting dates requires obtaining the service member’s entry date and reviewing specific BRS plan rules. A Tampa military divorce lawyer must perform this analysis to accurately calculate the divisible marital share of the TSP.
3. Calculating the Marital Share (More Complex Under BRS): Accurately isolating the marital portion of a BRS TSP account requires careful analysis of historical statements:
- Establish the pre marital balance (if any).
- Track member contributions made during the marriage.
- Track vested government (automatic and matching) contributions made during the marriage.
- Calculate the investment gains/losses specifically attributable to all these marital contributions.
Given the added complexity of tracking different contribution sources and vesting dates, using a financial expert (like a forensic accountant or CDFA) may be even more advisable in BRS divorces compared to High-3 cases, especially if the account value is substantial or records are incomplete. Your Tampa military divorce lawyer can coordinate with these experts.
4. The RBCO Requirement Remains: Regardless of whether it’s High-3 or BRS, dividing any TSP account still requires a specific, federally compliant Retirement Benefits Court Order (RBCO) (formerly COAP). Your Florida Final Judgment must authorize the RBCO and clearly define the division terms, including:
- The valuation date.
- The specific percentage, dollar amount, or formula defining the former spouse’s share (ensuring it accurately captures the marital portion of member and vested government contributions).
- How gains/losses between valuation and payment are handled.
- How any outstanding TSP loans are treated.
Errors in the RBCO will lead to rejection by the Federal Retirement Thrift Investment Board (FRTIB). Given the increased value and complexity of TSP under BRS, getting the RBCO right is absolutely critical. Relying on a Tampa military divorce lawyer experienced in drafting these specific orders is paramount.
Dividing the Reduced Pension Under BRS
While the TSP takes on greater prominence, the defined benefit pension under BRS still exists for those serving 20+ years, and it remains a divisible marital asset under Florida law.
- Calculation: The process is similar to High-3, using a coverture fraction to determine the marital share of the disposable retired pay. However, the result will be smaller due to the reduced 2.0% multiplier.
- Example: Using the earlier example (15 years marriage / 24 years service), the marital fraction is 62.5%.
- High-3: Former Spouse gets 50% x 62.5% = 31.25% of disposable pay.
- BRS: Former Spouse gets 50% x 62.5% = 31.25% of disposable pay. BUT the total disposable pay itself is 20% smaller due to the lower multiplier used in the initial pension calculation.
- SBP Still Crucial: The need for the Survivor Benefit Plan (SBP) to protect the former spouse’s share after the retiree’s death remains just as critical for the BRS pension, perhaps even more so given its reduced value. Negotiations over SBP election and cost allocation must still occur, guided by your Tampa military divorce lawyer.
- DFAS Order: Direct payment of the BRS pension share from DFAS still requires meeting the 10/10 Rule and having a precisely drafted court order.
Do not neglect the pension just because the TSP is larger. It is still a valuable marital asset requiring proper legal attention.
What About Continuation Pay?
Continuation Pay is the mid career bonus offered under BRS. How is this treated in a Florida divorce? The answer is less clear cut than for TSP or the pension, as it’s a newer benefit without extensive case law. Potential treatments include:
- Marital Property: If the eligibility criteria were met, the service commitment was made, and the pay was received(or constructively received) during the marriage, it is likely considered a marital asset subject to equitable distribution. Your Tampa military divorce lawyer would argue for its inclusion.
- Income for Support: If received after the divorce filing date but based on commitments made during the marriage, it might be argued as income available for child support or alimony calculations.
- Separate Property: If the service commitment and payment occur entirely after the divorce cut off date, it is likely the service member’s separate property.
The specific timing of the eligibility, commitment, and payment relative to the marriage dates and filing date will be key. This requires careful analysis and potentially negotiation or litigation.
Strategic Shifts: Discovery and Negotiation in a BRS Divorce
The move to BRS necessitates shifts in legal strategy:
- Prioritize TSP Discovery: Obtaining complete historical TSP statements (from before marriage to date of filing) is absolutely critical. This includes contribution histories to verify government deposits and vesting. Your Tampa military divorce lawyer must be aggressive in demanding these documents.
- Vesting Verification: Do not assume government contributions are divisible. Verify the service member’s vesting dates relative to the marriage duration.
- Consider Financial Experts: For high value TSP accounts or complex histories, budgeting for a forensic accountant or CDFA early on can save money and prevent errors in the long run.
- Focus on RBCO Accuracy: Allocate sufficient time and resources to ensure the RBCO is drafted perfectly to avoid FRTIB rejection. Pre approval is highly recommended.
- Re evaluate Settlement Offers: An offer that looks fair based only on the pension might be grossly inadequate if it undervalues or ignores a substantial marital share of the TSP. Analyze all retirement assets together.
Conclusion: Adapt Your Strategy for the New Retirement Reality
The Blended Retirement System represents a fundamental change in military compensation, moving away from sole reliance on a long term pension towards a model heavily dependent on the Thrift Savings Plan. For military couples divorcing in Florida under BRS, this means the TSP – including potentially significant government contributions earned during the marriage – is no longer a minor asset but a central piece of the financial puzzle.
Accurately identifying the marital portion of the BRS TSP, accounting for vesting schedules, and navigating the technical requirements for division via a Retirement Benefits Court Order are essential but complex tasks. Likewise, the reduced BRS pension still requires careful division and consideration of SBP. Ignoring these nuances or applying outdated High-3 strategies to a BRS case can lead to substantial financial errors and inequitable outcomes.
Whether you are the service member enrolled in BRS or the spouse anticipating a share of these benefits, you need legal counsel who understands this new landscape. An experienced Tampa military divorce lawyer familiar with both the High-3 and BRS systems can provide the crucial expertise needed to conduct thorough discovery, accurately value allcomponents of the retirement package, and ensure court orders are drafted precisely to secure your fair share under Florida law and federal regulations. Do not let unfamiliarity with BRS jeopardize your financial future – ensure your Tampa military divorce lawyer is up to date. Choose a Tampa military divorce lawyer who knows BRS. Your future depends on your Tampa military divorce lawyer’s expertise. Trust your Tampa military divorce lawyer.
Frequently Asked Questions (FAQ)
What is the main difference between BRS and High-3? High-3 is primarily a defined benefit pension (monthly check for life after 20+ years). BRS blends a smaller pension with a much larger Thrift Savings Plan (TSP) component that includes automatic and matching government contributions, similar to a civilian 401(k).
Are the government contributions to TSP under BRS marital property? Yes, the automatic 1% and matching contributions (up to 4%) made by the government during the marriage are generally considered marital property in Florida, provided the service member has met the vesting requirements (typically 2 years of service). An experienced Tampa military divorce lawyer will confirm vesting.
What is vesting and why does it matter for BRS TSP division? Vesting means ownership. The service member must typically complete two years of service to “own” the government contributions in their TSP. Only vested government contributions accrued during the marriage are divisible marital property.
Do I still need a special court order (RBCO) to divide the TSP under BRS? Yes. Regardless of the retirement system (High-3 or BRS), dividing any TSP account requires a specific Retirement Benefits Court Order (RBCO) that meets the strict requirements of the Federal Retirement Thrift Investment Board (FRTIB). Your Florida divorce decree alone is not enough.
Is the BRS pension still divided in divorce? Yes. Although smaller (due to the 2.0% multiplier vs. 2.5% for High-3), the defined benefit pension earned during the marriage under BRS is still considered marital property divisible under Florida law, subject to federal USFSPA rules regarding disposable retired pay. Your Tampa military divorce lawyer will address both TSP and the pension.
The McKinney Law Group: Dedicated to Tampa’s Service Members and Their Families
Divorce is difficult—especially for military families. Our firm provides trusted, compassionate guidance to help you move forward with stability and strength.
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