Federal Employee Retirement System
Qualified Domestic Relations Order (QDRO)
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Most Civilian Federal Employees will be in one of two retirement systems: the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS). Generally, CSRS covered employees prior to 1987 and FERS covered employees after 1987 and employees who voluntarily switched from CSRS.
The FERS System was created by congress in 1986 and became effective on January 1, 1987. Under the FERS retirement plan, the employee is also a participant in the social security plan. Under CSRS retirement plan the employee usually does not participate in the social security system.
The United States Office of Personnel Management (OPM) managed the FERS and CSRS systems. Court orders dividing CSRS and FERS pension plans are not ERISA- Qualified Retirement Plans and the orders are not referred to as Qualified Domestic Relations Orders (QDRO’s). OPM uses the term Court Order Acceptable for Processing (COAP). When a COAP is being drafted, your attorney must be aware of how to address the employee’s annuity, a potential refund of employee’s contributions and the survivor annuity. The former spouse survivor annuity is the reoccurring benefit under CSRS or FERS that is payable to a former spouse after the employees’ death. The refund of employee contributions refers to a lump sum credit to a separated employee. The retirement benefit itself is generally divided on a formula wherein the former spouse receives 50% of the benefit that accrued during the marriage and the employee spouse receives the balance.