Bill Overview
Title: Retirement Annuity Supplement Clarity Act
Description: This bill specifies that an annuity supplement payment made under the Federal Employees Retirement System must be included when dividing an annuity pursuant to a court order in a divorce or similar proceeding, unless the court order expressly provides otherwise.
Sponsors: Sen. Lankford, James [R-OK]
Target Audience
Population: Federal employees under FERS involved in divorce proceedings
Estimated Size: 1000000
- The bill affects individuals who receive annuity payments under the Federal Employees Retirement System (FERS).
- The specific target within these individuals would be those undergoing a divorce or similar legal proceedings where a court order is involved.
- Federal Employees Retirement System (FERS) covers a significant number of federal employees, including those who have retired.
- The annuity supplement in question is a specific payment made to FERS retirees that bridge the gap until they reach Social Security eligibility.
- Not all federal retirees will be impacted, only those with a court order in a divorce or similar proceeding that involves the division of their annuity.
Reasoning
- The Federal Employees Retirement System (FERS) impacts about 2.1 million federal employees, but not all are retirees.
- Many federal retirees would not be impacted without a legal issue, such as a divorce requiring a court order involving annuity division.
- The U.S. workforce sees approximately a 40-50% divorce rate, but the specific occurrence during retirement years is harder to anticipate.
- Of those undergoing a divorce, only a subset will have annuities under FERS included in their proceedings.
- The budget restricts offering detailed support or benefits to a small fraction of the eligible population given implementation needs such as administration and legal frameworks.
Simulated Interviews
Retired Postal Worker (Virginia)
Age: 67 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- I didn’t realize my annuity could be divided like this. If I had known, I might have settled differently.
- The clarity this bill provides is helpful, but late for me.
- My wellbeing relies heavily on this income since my divorce.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Customs Officer (California)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- I’m relieved there's clearer guidelines now, it helps me understand what could happen to my annuity.
- I'm worried about losing part of my retiree benefits, but at least I know the possibilities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 6 |
| Year 5 | 9 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 4 |
Retired Park Ranger (Texas)
Age: 70 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- This policy doesn't affect me as I'm already settled and my retirement too isn't altering anymore.
- I think it's more beneficial for those still in dispute.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Retired HR Specialist (Florida)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This helps me understand my standing, but I'm unsure how the division will impact my monthly income for my family’s needs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 4 |
Retired IRS Auditor (Colorado)
Age: 59 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 3/20
Statement of Opinion:
- I’m anxious about losing benefits because I rely on them heavily due to my health.
- This policy gives a chance to be more prepared for what’s coming than to be caught off guard.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 2 |
Administrative Assistant (New York)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I guess it's good for those going through a divorce, but for me, life will continue as usual with my pension intact.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Retired Military Personnel (Ohio)
Age: 68 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- Interesting policy, but it doesn't apply to me based on my life situation.
- I'm glad for those this helps out.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Federal Benefits Counselor (Illinois)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The policy finally clarifies an otherwise gray area. It should ease financial planning for some of my clients.
- This won’t change my retirement, but it's crucial for my work.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Retired VA Nurse (Georgia)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- It's important to know how my annuity might be impacted, and be prepared in my ongoing proceedings.
- This clarity helps, but worries me about my financial stability in retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Retired Civil Servant (Arizona)
Age: 77 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- These changes don’t affect me now, but they could have been important during my divorce decades ago.
- I imagine it is beneficial for those currently going through such processes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $3000000 (Low: $1000000, High: $5000000)
Year 2: $3000000 (Low: $1000000, High: $5000000)
Year 3: $3000000 (Low: $1000000, High: $5000000)
Year 5: $3000000 (Low: $1000000, High: $5000000)
Year 10: $3000000 (Low: $1000000, High: $5000000)
Year 100: $3000000 (Low: $1000000, High: $5000000)
Key Considerations
- The legal and administrative adjustments required from federal agencies and courts can be managed with minimal cost increases.
- The underlying legal clarity provided by the bill may mitigate prolonged dispute costs for affected individuals.
- Potential complexities in balancing the inclusion of annuity supplement with state family laws need oversight.