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Comments on Proposed Amendments to the Code of Federal Regulations

Part 63 of Title 32 of the Code of Federal Regulations contains the regulatory implementation of the Uniformed Services Former Spouses' Protection Act. The main body of 32 CFR Part 63 is contained in a file available on this site.

The Defense Finance and Accounting Service published proposed amendments to the regulation in the Federal Register, Volume 60, Number 66 on April 6, 1995. The exact text of the published comments follows these introductory comments.

Typically, proposed regulations are later published in final form after the public has had an opportunity to comment. However, in this case, the proposed regulation was not formally published and integrated with the existing regulation.

Nevertheless, the pay center technician's have been using the proposed regulations in their adjudications. As of early October, 1996, it appears that at least one of the provisions of the proposed regulation is in question. Therefore before any provision of the new regulation is relied upon, research should be conducted to find out the status of the regulation and current policies of the pay center.

The most significant area of concern in this turbulent era is the provision on the acceptance of a court order or agreement that uses a formula to calculate the former spouse's share with one of the elements as an unknown. This is a frequent issue when the member is still on active duty and the denominator of the marital fraction is, therefore, unknown until the member retires.

See the proposed amendments to Section 63.8(c)(8), following.

In the event this provision in the proposed regulation is withdrawn, I am available to assist counsel in dealing with this problem.

TEXT OF FEDERAL REGISTER PUBLICATION

Proposed changes to 32 CFR Part 63 were published in

ACTION: Proposed rule; amendment.

SUMMARY: This proposed rule amends part 63 of title 32 of the Code of Federal Regulations to reflect amendments to the Uniformed Services Former Spouses' Protection Act and to clarify the language in @ 63.6(c)(8) concerning court orders that provide for a division of retired pay by means of a formula.

Guidance implementing the amendments have been incorporated into Volume 7, Part B of the DoD Financial Management Regulation, DoD 7000.14-R, but has not been previously published in the Federal Register.

DATES: Comments must be received June 6, 1995.

ADDRESSES: Interested parties should submit written comments to: Deputy Director for Finance, Defense Finance and Accounting Service, 1931 Jefferson Davis Highway, Arlington, VA 22240-5291, Attention: Military Pay Directorate.

FOR FURTHER INFORMATION CONTACT: Mr. Fiti Malufau, (703) 602-5279.

SUPPLEMENTARY INFORMATION: Because of the large number of comments anticipated, we do not plan to acknowledge or respond to individual comments but will address the comments, as appropriate, in the preamble of the final rule.

To avoid undue hardship on those seeking to enforce support orders providing for a division of retired pay, the Department of Defense will continue to follow its current implementing guidance with regard to the amendments to the Uniformed Services Former Spouses' Protection Act and, effective April 1, 1995, will accept court orders containing formulas that are consistent with the proposed rule until a final rule is issued.

Executive Order 12866, "Regulatory Planning and Review"

The Under Secretary of Defense (Comptroller) has determined that 32 CFR part 63 is not a significant regulatory action. The rule does not:
(1) Have an annual effect on the economy of $ 100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants, user fees,or loan programs or the rights and obligations of recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.

Public Law 96-354, "Regulatory Flexibility Act of 1980" (5 U.S.C. 601-612)

The Under Secretary of Defense (Comptroller) has certified that this rule is not subject to the Regulatory Flexibility Act (5 U.S.C. 601-612) because it affects only certain military members and their former spouses.

Public Law 96-511, "Paperwork Reduction Act" (44 U.S.C. 3501-3520)

The Under Secretary of Defense (Comptroller) has certified that this amendment of 32 CFR part 63 does not impose any new reporting or recordkeeping requirements under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520).

List of Subjects in 32 CFR Part 63

Alimony, Child support, Retirement, Uniformed Services, Payments to former spouses, Military retired pay. Accordingly, 32 CFR part 63 is proposed to be amended as follows:

PART 63--FORMER SPOUSE PAYMENTS FROM RETIRED PAY

1. The authority citation for part 63 continues to read as follows:

Authority: 10 USC 1408.

2. Section 63.6 is proposed to be amended by adding the word "certified" after the word "A" in paragraph (b)(1)(ii), by revising paragraphs (b)(5), (c)(8) and (e), and by adding a new paragraph (h)(13) to read as follows:

63.6 -- Procedures.
* * * * *
(b) * * *

(5) The designated agent for each uniformed service is:
(i) Army, Navy, Air Force and Marine Corps: Defense Finance and Accounting Service, Cleveland Center (Code LF), PO Box 998002, Cleveland, OH 44199-8002.

(ii) Coast Guard: United States Coast Guard, Commanding Officer (L), Pay and Personnel Center, 444 Quincy Street, Topeka, KS 66683-3591.
(iii) Public Health Service: Office of General Counsel, Department of Health and Human Service, Room 5362, 330 Independence Avenue, SW, Washington, DC 20201.

* * * * *
(c) * * *
(8) The court order shall require payment of child support or alimony or, in the case of a division of property, provide for the payment of an amount of disposable retired or retainer pay, expressed as a dollar amount or as a percentage. Court orders specifying a percentage fraction of disposable retired pay shall be construed as a percentage or a fraction of disposable
retired pay. A court order that provides for a division of retired pay by means of a formula wherein the elements of the formula are not specifically set forth or readily apparent on the face of the court order will not be honored unless clarified by the court. For orders served on or after April 1, 1995, an exception to requiring such a clarifying order will be made only if in accordance with (c)(8) (i), (ii) and (iii) of this section:
(i) The order otherwise qualifies for direct payment but the parties are divorced when the member is on active duty. In that situation, where the pertinent court order is expressed in terms of a formula and the element missing from that formula is the member's years of service, then the designated agent will supply the member's years of service in terms of whole months to arrive at a percentage of disposable pay due the former spouse. Partial months of service will be dropped. The member's service that is creditable for retirement percentage multiplier purposes (See Chapter 1, Section C of DoD Financial Management Regulation, DoD 7000.14-R, Volume 7, Part B n1) will be used in all formulas. In the case of reserve members, points earned during the member's marriage must be contained in the court order. The designated agent will supply total retirement points earned by a reservist [*17508] if that element is missing from the formula. The formula will be computed based on the member's service for retirement multiplier or points and carried out to four decimal places. n1 Copies may be obtained from the Deputy Director for Finance, Defense Finance and Accounting Service, 1931 Jefferson Davis Highway, Arlington, Virginia 22240-5291, Attention: Military Pay Directorate. (ii) The order otherwise qualifies for direct payment but the parties are divorced when the member is on active duty and the pertinent court order awarding the former spouse a portion of the member's retired/retainer pay is expressed in terms of a hypothetical retired pay amount-one that is conditional or based upon the occurrence of certain facts and/or events. No application will be processed by the designated agent in the absence of a clarifying order where the hypothetical retired pay amount is to be based upon retired/retainer pay due the member at the time of divorce and the divorce occurs prior to the member's retirement eligibility (at least 15 or 20 years of service) unless the hypothetical retired pay amount is contained in the order or is based on 15 or 20 years of service. All hypothetical awards will be computed on the basis of the member's retired pay at the time of retirement (as explained in paragraph (c)(8)(iii) of this section) and, if the order also provides for the same percentage of cost-of-living adjustments, will be converted to a percentage of current disposable pay. If the hypothetical contained in the court order does not provide for the same percentage of cost-of-living adjustments, then payments will be made in a fixed dollar amount only. As noted in this section, the formula will be carried out to four decimal places. (iii) Example. A court order awards the former spouse 25% of the member's monthly retired/retainer pay of a retired rank of Captain with 20 years of service to include the same percentage of cost-of-living increases. The member later retires after 25 years of service as a Major. The monthly retired pay of a Captain with 20 years of service equals $ 1,000.00 and the monthly retired pay of a Major with 25 years of service is $ 1,100; $ 1,000.00 divided by $ 1,100.00 equals .909091. This amount (.909091) multiplied by 25% (amount of former spouse award) is .2272. This 22.72% award is proportionately the same share as the 25% award in the court order except it is expressed in terms of the member's actual rather than hypothetical retirement pension.
(iv) Except for years of service or date of retirement, as well as hypothetical retired pay amounts mentioned in paragraphs (c)(8) (i) and (ii) of this section, in order to be honored without the necessity of obtaining a subsequent clarifying order from the court, pertinent court orders must contain a fixed dollar amount or a percentage of disposable pay that can be computed using the qualifying court order alone without reference to any facts or values external to the court order dividing the member's retired/retainer pay.
* * * * * (e) Limitations. (1) Divorces, dissolutions of marriage, annulments, and legal separations that became effective before February 3, 1991. Upon proper service, a member's retired pay may be paid directly to a former spouse in the amount necessary to comply with the court order, provided the total amount does not exceed: (i) Fifty percent of disposable retired pay for all court orders and garnishments paid under this part. (ii) Sixty-five percent of disposable retired pay for all court orders and garnishment actions paid under this part and garnishments paid under 42 U.S.C. 659. (2) Divorces, dissolutions of marriage, annulments, and legal separations that become effective on or after February 3, 1991. Upon proper service, a member's retired pay may be paid directly to a former spouse in the amount necessary to comply with the court order, provide the total amount does not exceed: (i) Fifty percent of disposable retired pay for all court orders and garnishment actions paid under this part. (ii) Sixty-five percent of the remuneration for employment as defined under 42 U.S.C. 659 and 662 for all court orders and garnishments under this part and garnishments paid under 42 U.S.C. 659. (3) Disposable retired pay. Disposable retired pay is the gross pay entitlement, including renounced pay, less authorized deductions. Disposable retired pay does not include annuitant payments under 10 U.S.C. Chapter 73. For court orders issued on or before November 14, 1986, (or amendments to such court orders), disposable retired pay does not include retired pay of a member retired for disability under 10 U.S.C. Chapter 61. The authorized deductions are: (i) For divorces, dissolutions of marriage, annulments, and legal separations that become effective before February 3, 1991:
(A) Amounts owed to the United States. (B) Amounts required by law to be deducted from member's pay. (C) Fines and forfeitures ordered by a court-martial. (D) Amounts waived in order to receive compensation under Title 5 or 38 of the United States Code. (E) Federal employment taxes and income withheld to the extent that the amount is consistent with member's tax liability, including amounts for supplemental withholding under 26 U.S.C. 3402(i) when the member presents evidence to the satisfaction of a designated agent that supports such withholding. State employment taxes and income taxes when the member makes a voluntary request for such withholding from retired pay and the Uniformed Services have an agreement with the State concerned for withholding from retired pay. (F) Premiums paid as a result of an election under 10 U.S.C. Chapter 73, to provide an annuity to a spouse or former spouse to whom payment of a portion of such member's retired pay is being made pursuant to a court order under this part. (G) The amount of the member's retired pay under 10 U.S.C. Chapter 61 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), for court orders issued after November 14, 1986. (ii) For divorces, dissolutions of marriage, annulments, and legal separations that become effective on or after February 3, 1991:
(A) Amounts owed to the United States for previous overpayment of retired pay and for recoupment required by law resulting from entitlement to retired pay. (B) Forfeitures of retired pay ordered by court-martial. (C) Amounts waived in order to receive compensation under Title 5 or 38 of United States Code. (D) Premiums paid as a result of an election under 10 U.S.C. Chapter 73 to provide an annuity to a spouse or former spouse to whom payment of a portion of such member's retired pay is being made pursuant to a court order under this part. (E) The amount of member's retired pay under 10 U.S.C. Chapter 61 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). * * * * * (h) * * * (13) For divorces, dissolutions of marriage, annulments, and legal separations that become effective on or after February 3, 1991, payments to a former spouse for a division of property are excluded in determining a member's gross wages concerning retired pay. * * * *
Dated: March 31, 1995. Patricia L. Toppings, Alternate OSD Federal Register Liaison Officer, Department of Defense.

© 1997 Flying Solo™. All rights reserved. Legal Notices



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