Divorce Tips Database

Social Security as a Surrogate

By: Marvin Snyder

Whether pension benefits for persons not covered by Social Security substitute in some way for the absence of Social Security benefits is an undecided issue. Several courts at both the state and federal levels have ruled that Social Security benefits are not marital property and cannot even be considered for any reason at all in equitable distribution. However, the issue continues to be raised and may yet be decided differently.

Would federal pensions be less if federal employees were covered by Social Security? My answer is yes. My reasoning is based on the fact that there are two federal retirement programs: the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). CSRS members are not covered by Social Security; FERS members are covered. CSRS members have a larger pension from the CSRS defined benefit pension plan than FERS members have from the FERS defined benefit pension plan. FERS members also have a thrift plan available, however.

So, it could be argued that a CSRS member's pension in some measure subsumes or includes or allows for the lack of Social Security benefits. On the other hand, while CSRS requires contributions from employees, the employees do not pay Social Security taxes. In private employment, both the employer and the employee pay Social Security taxes. This is not the case in CSRS.

Social Security benefits will not be affected by any sums received by way of divorce settlement until and unless total income in any year exceeds that allowed by Social Security regulations, depending on age. It is presumed that application would not be made for Social Security before age 62. At that time, income will be measured - if the Social Security laws and regulations are the same then as they are now. Social Security benefits may be decreased or reduced to zero if other income is too high.

I have, upon request, in certain cases computed the hypothetical Social Security pension and its present value. If you desire to see this illustration, please let me know and I will be pleased to provide it in the format of a regular valuation at the standard fee rates.

PAC provides pension valuations, QDROs and actuarial reports for divorce attorneys and marriage dissolution mediators nationwide. Our Philadelphia offices are located in the suburb of Elkins Park, Pennsylvania, from where we serve the needs of legal professionals nationally, including east coast states such as New York, New Jersey, Virginia, North Carolina, Florida, Washington, D.C., and Maryland. Our Florida office located in Coral Gables, FL serves Florida family attorneys.
Pension Analysis Consultants, Inc.

Contact Us For Specific Information About Your Case:

P.O. BOX 7107
Elkins Park, PA 19027

Phone: (215) 782-9845

(800) 288-3675

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