Amicus Brief — McCarty v. McCarty

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The amici on whose behalf this brief

is filed are: Representatives John L.

Burton, Millicent Fenwick, Margaret M.

Heckler, Barbara A. Mikulski, Patricia

Schroeder, John F. Seiberling, Olympia

Snowe and Howard Wolpe; Action for

Former Military Wives, Ex-Military

Wives Alliance of Unrecognized Women

Veterans, National Military Wives

Association, Ex-Partners of Servicemen

for Equality, and Association of

American Foreign Service Women.

(1)

TABLE OF CONTENTS

Page

Statement of Interest of Amici

De 6. WS ee we wk ae ee ek

Statement of Facts .. - .« = ee « 8

summary Of Argument. ...s+«se §

IS © aul? arty tay te aA te ie tires Hes eG

qt. NOTHING IN THE FEDERAL

STATUTES PROVIDING FOR

MILITARY RETIREMENT PAY

CALLS FOR OVERRIDING STATE

RULES GOVERNING THE

DIVISION OF PROPERTY ON

DETTE. 6 eee ee eee | F

A. No Subjects of Legal

Rules Are More

Traditionally Reserved

for the Exercise of

State and Not Federal

Sovereignty Than

Property and Domestic

ee ae eee

B. When Congress Means To

Intrude on State

"Family and Family-

Property Law" To

Preserve Federal

Interests, It Says

So Unmistakably ... ll

(ii)

Page

Cc. In Statutory Provi-

sions Dealing with

Army Officers' Retire-

ment Pay, Congress

Expressed no Intent

to Override State Law

Governing the Dispo-

sition of Property

Upon Dissolution of a

a 6 GS ease ae

D. No Discernible Con-

gressional Policy

Is Frustrated by

Treating an Army

Pension or Pension

Expectancy as Com-

munity Property .. 31

Il. THE NATIONAL POLICY

THAT FAVORS PROVISION

FOR THE FINANCIAL NEEDS

OF THE ELDERLY WOULD BE

SUBVERTED BY A DECISION

THAT CALIFORNIA LAW HAS

BEEN PREEMPTED ..... 40

ie re eae er kee ee

re a ee eee

TABLE OF AUTHORITIES

Federal Cases:

Aquilino v. United States,

ee ee A. ee

Free v. Bland,

oan gems Gee Cleese 2 ee vie e OR

(iii)

Page

Hisquierdo v. Hisquierdo,

Soe Ue eee ees cd we e. 20, 22,

> > b F

19, 21,

> at ¥

29, 30,

31

In re Burrus,

eR me 8 eS

Labine v. Vincent,

a Se eee Ul

McCune v. Essig,

Se ae ee © Pao’

United States v. Price,

eS % ee OC) re +

United States v. Wise, |

yee he eee |

United States v. Yazell,

eee O(a

Wilcox v. Jackson,

38 U.S. (13 Pet.) 498

(1839) ar A 9

Wissner v. Wissner,

Soe Uels DE Reels.» sc. « & « “38, 16

Yiatchos v. Yiatchos,

ota wens ae eas 6 ct te te e «6B, 28

State Cases:

Chisnell v. Chisnell,

82 Mich. App. 699, 267 N.W.2d

155 (1978), cert. denied, 442

V.R. Dew Geweeee «4 5 6 « ew o |

(iv)

Page

Fithian v. Fithian,

10 Cal.3d 592, 517 P.2da 449,

111 Cal. Rptr. 396 (1974),

cert. denied, 419 U.S.

825 (1974) Cp A a ae

In re Marriage of Brown,

15 Cal.3d 838, 544 P.2d 561,

a6 Cai. Rote. 633 (2976)... . 39

In re Marriage of Campa,

89 Cal. App.3d 113, 152 Cal. Rptr.

362 (1979), appeal dismissed,

S66 U.8. £4040 (apeer sic « 2 2 & B9O

In re Marriage of Musser,

70 Ill. App.3d 706, 388 N.E.2d

Sa ees © oe es ace «ae

Kruger v. Kruger,

139 N.J. Super. 413, 354

ee @ |

Statutes:

= Wemeee SORES C9St2). « « «2 ow st te BF

2 OS PR ll A ee.

RR er me

ae Gales a Bee kk wt Ee we is

BY wepeces & SRT «6 ek Rk 2 es CR

a.) Bas

aa, 24,

ae> Be

37 U.S.C. § 7Ol(c) 32

37 U.S.C. § 701(d) 20

(v)

38 U.S.C. § 3101 .

Ase GE Hay G, i792, ch.:33, § 1,

1 Stat. 271-72 ak oe

Act of May 8, 1792, ch. 37, § 4,

1 Stat. 279. er ee eee

Act of April 23, 1904, ch. 1485,

33 Stat. 259, 266. bices

Act of March 2, 1907, ch. 2511,

34 Stat. 1158, 1159. of

26, 32

33

33

Foreign Service Act of 1980, Pub. L.

No. 96-465,

§ 820(b)(1), 94 Stat. 2120 .

§ 308, 94 Stat. 2086 .

Employee Retirement Income

Security Act of 1974,

29 U.S.C. § 1000 et. seg..

29 U.S.C. § 1052

29 U.S.C. § 1053

29 U.S.C. § 1056(a)(1)

Railroad Retirement Act of 1974,

45 U.S.C. § 231m.

27

37

44

46

45

30

aa, 42,

13, 14,

19, 24,

25

(vi)

Page

Regulations:

SR aeats OS Sree es os. ew le a ee ae

32 C.FP.R. §$§ 59.1<59.4 .... +. 320, 22

Bills:

H.R. 2817, 96th Cong.,

| ee 7 a

H.R. 3677, 96th Cong.,

Se ees Cee ee oes! Os we Ss ee

H.R. 6270, 96th Cong.,

ee es Res 26 set a 6 « & aes

Treatises:

6 Am. Jur. 2d S252 2EEESL8

§ 52 (1963)... iin A eee ee

GCoceae., Gemerenes. . «cs ts © © oe

6A C.J.S. Assignments

Me B@:. o ee e ee

70 C.J.S. Pensions

Stee «hae let @ oe eid! a2 wee OL

Griswold, Spendthrift Trusts ... 22

ee ll ee Oe a ee ° Pee» |

(vii)

Page

Congressional Reports:

Congressional Research Service of the

Library of Congress for the Subcom-

mittee on Retirement Income and

Employment of the House Select

Committee on Aging, Women and

Retirement Income Programs:

Current Issues of Equity and

Adequacy, Committee Pub. No.

96-190, 96th Cong., lst Sess.

GC. oo , I eee ee

Congressional Testimony:

Testimony of Winnifred Cowan on

behalf of Ex-Partners of Service-

men for Equality, before the House

Armed Services Subcommittee on

Military oe

May Ze. i00e + 3% s ss ae ee ey

49

Testimony of Representative

Schroeder before the

Subcommittee on Military

Compensation of the House Armed

Services Committee, 96th Cong.,

2G /OGG8. (5RBC)s 6 oe a. cs ele: QB as

Appendix

Other Testimony:

Testimony of Winnifred Cowan on

behalf of Ex-Partners of Service-

men for Equality, before the

Citizens Conference on Pension

Policy, September 5, 1980. ... 46

(viii)

Other:

1 American State Papers

(Misc. 1834)

Benson, Women and Private Pension

Plans, presented to the U.S.

Department of Labor Council

on Employee Welfare and Pension

Benefit Plans.

Dingle Associates, Inc., The Navy

Leaders Family Manual, prepared

for the gin yaaiacameaty of the sects

AgeW . . «

Little, Occupational Socializa-

tien

President's Commission on Pension

Policy, An Interim sERtLS.

wens anaes 6 xs ie ‘

President's Commission on Pension

Policy, Pensions and Divorce:

Staff Recommendations,

undated.

President's Commission on Pension

Policy, Working Papers:

Working Women and Retirement,

August, 1980 . Cae See

Protocol Committee of the Navy

Wife Line Association,

Guidelines for the Wives of

Commanding Officers, 1977.

Report of the President's

Commission on Military

Compensation, April, 1978.

32

44,

49

48,

43,

$$,

54,

SO,

34,

46

52

55

56

55

51

52

(ix)

Page

U.S. Department of Commerce,

Bureau of the Census,

So-ial and Economic Characteristics

of the Older Population:

Pe ee ee eg ge et SS ae

U.S. Department of Labor, Bureau

of Labor Statistics, News

Release USDL 79-285,

re Ee O°) i re

U.S. Department of Defense,

Report of the Pay Adequacy

ocucy, October, 1979 ...... 47

Wooley-Downs, Family Services

Section of the Bureau of Navy

Personnel, Study of Navy Wives,

es ee A eS ee ae ee 54

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1980

No. 80-5

RICHARD JOHN McCARTY,

Appellant,

Vv.

PATRICIA ANN McCARTY,

Appellee.

On Appeal from the

Court of Appeal of California,

First Appellate District

BRIEF AMICI CURIAE ON BEHALF

OF CERTAIN MEMBERS OF CONGRESS

AND ORGANIZATIONS

STATEMENT OF INTEREST OF AMICI CURIAE

This brief amici curiae is

filed with the written consent of counsel

Sor the parties by eicht members of

Congress’ and five organizations

. The eight members of Congress are

the Honorable John L. Burton, Millicent

Fenwick, Margaret M. Heckler, Barbara A.

Mikulski, Patricia Schroeder, John F.

Seiberling, Olympia Snowe and Howard Wolpe.

composed of spouses and former spouses of

military and foreign service personnel.?

The eight members of Congress

believe that the decision in this case

will significantly affect the extent to

which state and local governments will

remain free to exercise the authority

that has traditionally been theirs with

respect to family law issues. I[t will

also have important consequences for

large numbers of the constituents whom

they represent.

The five organizations are

made up of people who could be directly

affected in a very adverse way should

it become established chat military

pensions are not subject to division by

’ The five organizations are Action

Sor Former Military Wives, Ex-Military

Wives Alliance of Unrecognized Women

Veterans, National Military Wives Asso-

ciation, Ex-Partners of Servicemen for

Equality, and Association of American

Foreign Service Women.

the states upon dissolution of a marriage

under principles of community property

law or equity.

STATEMENT OF FACTS

The relevant facts can be

quickly summarized. The appellee,

Patricia Ann McCarty, was married to

the appellant, Richard John McCarty on

March 23, 1957. In the second year of

their marriage, Mr. McCarty went on

active duty with the Army as a physician.

Appellant continued to serve with the

Army through December 1, 1976, when he

petitioned for divorce in the appropri-

ate California Superior Court. At that

time he had served 220 months of the 240

months required for eligibility for

Army retired pay.

Appellant's petition for

divorce was subsequently granted. The

Superior Court ordered appellant to

pay alimony for support, divided the

available cash and the value of two

vehicles between the spouses, and deter-

mined that appellant's retirement pay

should be divided as quasi-community

property pursuant to Section 4803 of the

California Civil Code. After that

decision was reached, appellant retired

from the Army and began receiving

retired pay in the amount of $1,500 a

month.

Appellant appealed the portion

of the Superior Court's decision that

required the division of his Army retired

pay. The Court of Appeal affirmed the

lower court's decision, distinquishing

this Court's intervening decision in

Hiscguierdo v. Hisquierdo, 439 U.S. 572

(1979), and the California Supreme

Court declined to grant a hearing.

SUMMARY OF ARGUMENT

This case touches on two areas

traditionally reserved for the states --

family law and property law. There must

be a clear statement from Congress before

an intent to preempt state law in those

domains will be found. In past cases

before this Court, such strong language

was present. The language of the statute

here, supported by other indications of

its meaning, compels a contrary result.

The relevant provision, 37 U.S.C.

§ 70l1(a), does not on its face forbid

anything but instead authorizes Army

and Air Force officers to assign or

transfer current pay. Even if a nega-

tive inference is supplied, the clause

only reaches to voluntary assignment of

future pay. And in other federal pay

statutes, Congress has used language

that undoubtedly does cover involuntary

assignments, which is what is involved

here.

Military pensions may in part

be compensation for current services.

But no superior federal policy prevents

California from treating them totally as

pensions for state law purposes.

Appellant's contentions that a ruling

for Mrs. McCarty would entitle her to

pension benefits beyond her husband's

death or in the future give spouses of

servicemen a right to enjoin retirement

from the military are simply not so.

© FF

Because of the traditional

roles of women in our society as child-

rearers and homemakers, women are often

unable to remain in the work force long

enough to earn their own retirement bene-

fits. As a consequence, many elderly

women without husbands live on poverty

level incomes. This plight is even more

egregious for former wives of servicemen,

whose chances of earning a pension while

married are frustrated by their constant

relocation, the customary duties of a

military wife, and the long absences

from home of their husbands. The Govern-

ment has a strong interest in providing

financially for the elderly, and in the

case of a military wife whose marriage

is dissolved, that policy calls for

allowing the states to divide military

pensions upon divorce.

ARGUMENT

Zz. NOTHING IN THE FEDERAL STATUTES

PROVIDING FOR MILITARY RETIREMENT

PAY CALLS FOR OVERRIDING STATE

RULES GOVERNING THE DIVISION OF

PROPERTY ON DIVORCE

A. No Subjects of Legal Rules Are

More Traditionally Reserved

for the Exercise of State and

Not Federal Sovereignty Than

Property and Domestic Relations

The legal rules governing

people's most intimate relationships with

one another -- domestic relations law --

and people's relationships to land,

things and money -- property law --

are unquestionably matters primarily

of state and not of federal concern.

"The whole subject of the domestic

relations of husband and wife, parent

and child, belongs to the laws of the

States and not to the laws of the

United States." In re Burrus, 136

U.S. 586, 593-94 (1890). "[T]he power

to make rules to establish, protect,

, and strengthen family life... is

committed by the Constitution of the

United States ... to the legislature

of [each] State." Labine v. Vincent,

401 U.S. 532, 538 (1971). No less is

property law the primary concern of the

states and not the national government.

Family property law, in particular, is

of a "peculiarly local jurisdiction" of

the states and implicates "intensely

—_

local interests." United States v.

Yazell, 382 U.S. 341, 349, 353 (1966).

This is in keeping with the states'

"long-established role... in creating

property interests," Aquilino v.

United States, 363 U.S. 509, 513 n.3

(1960), as well as with their responsi-

bility for the laws governing family

life. For so dominant is the state

role in property law that, after title

to property has passed from the United

States to a private party, "that

property, like all other property in

che State, is subject to State legisla-

tion." Wilcox v. Jackson, 38 U.S. (13

Pet.) 498, 517 (1839).

What has just been said is

not debatable. Appellant does not

attempt to controvert it. The primacy

of the states is asserted -- not

denied -- in those few cases in which

this Court has found that Congress has

@ 36 «

ordained that federal law shall supersede

some aspect of state property or

domestic relations law. “In BRiscuierdo

v. Hiscuierdo, 439 U.S. 572 (1979),

the one opinion in over 440 volumes of

the United States Reports that sives

even plausibility to appellant's

contention that state law has been

displaced here, the Court was emphatic

on the point:

"On the rare occasion when state

family law has come into conflict

with a federal statute, this

Court has limited review under

the Supremacy Clause to a determina-

tion whether Congress has 'posi-

_tively required by direct enactment'

that state law be pre-empted.

Wetmore v. Markoe, 196 U.S. 68,

77 (1904). A mere conflict in

words is not sufficient. State

family and family-property law

must do ‘major damage' to ‘clear

and substantial’ federal interests

before the Supremacy Clause will

demand that state law be overridden.

United States v. Yazell, 382 U.S.

341, 352 (1966)." Id. at 581.

We now describe the compelling

reasons that the Court found for the

“ile

limited incursions into state areas of

responsibility that Hisquierdo and the

handful of remotely similar cases

allowed. Then we demonstrate that no

such reasons are present in this case.

B. When Congress Means To

Intrude on State "Family and

Family-Property Law" To

Preserve Federal Interests,

It Says So Unmistakably

The Hiscquierdo case concerned

the division, upon divorce, of retirement

benefits that the husband in the divorce

action expected to receive under the

Railroad Retirement Act. The Court held

chat under th: : statute the wife could

not be awarded a share of her husband's

benefits as community property. The

reason was -- principally -- the unequi-

vocal language of Section 14 of the

Railroad Retirement Act of 1974, which

carried forward what was said in Section

12 of the Act of 1937.

» 12 «

"Notwithstanding any other law of

the United States, or of any State,

territory, or the District of

Columbia, no annuity or supplemental

annuity shall be assignable or be

subject to any tax or to garnish-

ment, attachment, or other legal

process under any circumstances

whatsoever, nor shall the payment

thereof be anticipated

45 U.S.C. § 231m.

The legislative history confirmed that

the purpose of the clause was "to make

it sure that the annuitant gets the

pension.” 439 U.S. at 576 n.7. The

Court also noted that Congress had

provided in the Act benefits for the

spouse of a railroad worker, which

"even embodied a community concept to

an extent,” but that these benefits

ceased upon divorce, demonstrating

that Congress meant chat community to

verminate at that point. Id. at

584-85. Section 14, its history and

the other manifestations of Congressional

purpose disposed of the wife's principal

claim, which was to periodic payments

« 13 «

of a part of what the husband would

receive under the Railroad Retirement

Act.

The Court also rejected an

alternative claim. This was for an

offsetting award of community property

that was available at the time of the

divorce, as compensation for the

wife's interest in her husband's

pension. Again, Section 14 foreclosed

that claim. The Court held that the

compensatory offset scheme conflicted

with the clause of Section 14 that

states flatly that the payment of an

annuity shall not "be anticipated."

439 U.S. at 588-90.

The Court in Hisocuierdo

adverted to "four prior occasions" on

which it had "found it necessary to

forestall . . . [major damage] to

federal rights by state law based on

community property concepts." Id. at

° 14 «

582. On each such occasion Congress or

its delegate had spoken in terms that

admitted of as little doubt as the terms

of Section 14 of the Railroad Re_irement

Act.

In McCune v. Essig, 199 U.S.

382 (1905), the Court rejected an

attempt by Mary McCune to establish an

undivided one-half interest in a

parcel of land. Her parents had

settled the land as homesteaders.

Under the Federal Homestead Act, a

patent to land would not issue until

certain conditions were met. McCune's

father died, and his widow exercised

her right under the Act to fulfill the

requirements for a patent. Appellant

claimed shat a half interest had

passed to her at her father's death,

under the community property laws of

Washington. The Homestead Act, however,

clearly gave the widow a right to

« 48 «

continue cultivation and ultimately to

obtain a fee title by patent. The

Court was left in no doubt. "It

requires an exercise of ingenuity to

establish uncertainty in [the Homestead

Act] provisions." Id. at 389.

In Wissner v. Wissner, 338

U.S. 655 (1950), appellant's estranged

husband had bought a National Service

Life Insurance policy and named his

parents as beneficiaries. Appellant

asserted her right to one-half of the

insurance proceeds under California

community property law. This Court

held that California law had been

preempted by clear Congressional

enactments. The controlling section

provided that the insured "shall have

the right to designate the beneficiary

or beneficiaries of the insurance

[within a designated class] .. . and

Shall... at all times have the

right to change the beneficiary or

beneficiaries." Id. at 658 (citations

omitted). Moreover, the diversion of

future payments to Wissner's widow

would have necessitated seizure by

legal process. This would have been

in "flat conflict" with the provision

of the federal insurance statute that

"[p]ayments to the named beneficiary

‘shall be exempt from the claims of

creditors, and shall not be liable to

attachment, levy, or seizure by or under

any legal or equitable process whatever,

either before or after receipt by the

Deneficiary.'" Id. at 659.

In Free v. Bland, 369 U.S.

663 (1962), petitioner Free claimed

sole title to a United States savings

bond registered to "Mr. or Mrs. Free."

His wife had recently died, and her

son from a previous marriage asserted

an interest in the bonds by virtue of

°e 179 «

Texas community property laws. A

Treasury regulation, issued pursuant

to undoubted Congressional authority

and designed to carry out the Congres-

Sional purpose of making savings bonds

attractive to potential buyers, id. at

669, made the survivor of two co-owners

"or" form bond "'the sole and

of an

absolute owner.'" Id. at 667 n.5.

Another provision of the regulation

stated that "'[n]o judicial determina-

tion will be recognized which would

defeat or impair the rights of

survivorship conferred by [the] regula-

tions.'" Id. at 667 (citations omitted).

The Court recognized that "[t]he clear

purpose of the regulations is to

confer the right of survivorship on

the surviving co-owner." Id. at 668.

See also Yiatchos v. Yiatchos, 376

U.S. 306 (1964) (Treasury regulations

making the beneficiary cf bonds payable

a a a a

on death the sole and absolute owner

preempt state community property law).

C. In Statutory Provisions

Dealing with Army Officers’

Retirement Pay, Congress

Expressed no Intent To Over-

ride State Law Governing the

Disposition of Property upon

Dissolution of a Marriace

The statutory provisions

dealing with Army officers' retirement

pay stand in stark contrast to the

statutes and regulations discussed

above.

Appellant discourses learnedly

and at length on the statutes that

govern Army retirement pay. When all

is said and done, however, there is

only one section of the United States

Code that is even arguably pertinent

to his preemption claim. That is 37

U.S.C. § 7Ol(a). It is pertinent, if

at all, only by implication. In terms

it is an authorization to Army and Air

Force officers to assign their pay

checks (including retirement paychecks)

as they come to hand.

"Under regulations prescribed by

the Secretary of the Army or the

Secretary of the Air Force, as

the case may be, a commissioned

officer of the Army or the Air

Force may transfer or assign his

Pay account, when due and payable."?

The implication may be that the officer

may not "transfer or assign his pay

account" in advance. Such an implied

restriction falls markedly short of

the catalogue of means of ensuring

that the annuitant gets his pension

that were held in Hisquierdo to preclude

the application of state community

property law. [If an officer may not

assign future pay, it does not follow

that, as Section 14 of the Railroad

. Section 1-17 of Army Regulation

No. 37-104-1 implements this section

for retired pay. It provides that

"(a] retired officer may transfer or

assign retired pay when due and payable."

= 20 «

Retirement Act has it, no other federal

law and no state law may result in tax

Or garnishment or attachment "or other

legal process under any circumstances

whatsoever" and that the payment of an

annuity shall not "be anticipated."

The negative implication of

Section 70l(a), at that, is a dubious

one. If Section 701(a) implicit

forbids Army and Air Force officers to

"assign" their future pay, Section

701(d) turns right around and allows

them to make "allotments" from their

future pay "for the support of

relatives, or for any other purpose

that the Secretary... [of the Army

or Air Force] consider proper."

Allotments, then, are permitted by

statute for wives, children and other

relatives and, by regulation, for

purposes such as buying savings bonds

and paying insurance premiums. 32

» 21 «

C.F.R. §§ 59.1-59.4. "Allotment" is

not defined in the Code, but even if

it is thought to embody the idea of

revocability, as "assignment" presumably

does not, it is certainly a kind of

"transfer." Section 701(a) authorizes

transfers as well as assisgnments of

pay when due and payable, and appellant,

in terming the statute an anti-assign-

ment statute (Appellant's Br. 17),

must logically be urging that the

Statute is an anti-transfer statute

also, implicitly forbidding transfers

of future pay.

Appellant, having assumed with-

out analysis the negative implication

of the authorizing language of Section

701(a), goes so far as to Say that the

phrase "'[w]jhen due and payable’ is

simply an alternative phrasing for the

prohibition against ‘anticipation’

considered in Hiscuierdo." (Appellant's

o 29 «

Br. 27.) Not so. The Court in Hisquierdo

looked to the law of trusts for enlight-

enment on what a prohibition against

anticipation entails and found that,

according to Dean Griswold's classic

treatise on spendthrift trusts, such a

prohibition is commonly understood to

mean that "the interest of a sole

beneficiary shall not be paid to him

before a certain date," Griswold,

Spendthrift Trusts § 512, p. 583 (2d

ed. 1947), quoted at 439 U.S. at 588.

Thus, in the Hisquierdo case, the

offsetting immediate award that the

wite sought as an alternative to

periodic payments would have improperly

anticipated payment by allowing her

"to receive her interest before the

date Congress has set for any interest

to accrue." Id. at 589. If Army and

Air Force officers are forbidden,

analogously to Dean Griswold's sole

© 23 «

beneficiary of a trust, to receive

advances against their pay -=- to

"anticipate" their pay -- it is not by

virtue of Section 70l(a) (or any other

statute appellant has cited).

It is, however, instructive

here also to look to the law of trusts

for enlightenment on the character of

the restriction that Section 70l(a),

read most generously for appellant,

implies. There are two categories of

state trust statutes dealing with the

assignability of the beneficiary's

interest in a trust. The statutes

have been collected by Professor Scott

in his treatise. 2 Scott, Trusts

§ 152.1 (3d ed. 1967 & Supp. 1979).

One group of statutes limits

the voluntary assignment of a benefi-

ciary's interest and is worded as a

restriction on the beneficiary. The

other group restricts involuntary

@ 246

assignments and is phrased in terms of

the extent to which the interest in

the trust can be reached by creditors

and courts. Secticn 70l(a), if relevant

at all, is within the first group. It

prohibits, if anything, only voluntary

assignments by the officer. Involuntary

assignments by way of legal process

are left untouched. And it was to the

prohibition of involuntary assignments

by way of legal process that the Court

was referring when it said that Section

14 of the Railroad Retirement Act

"plays a most important role in the

statutory scheme." 439 U.S. at 583-84.

Its role is that of an "anti-attachment

provision[s]," ensuring "that the

benefits actually reach the beneficiary."

Id. at 584. tatutory provisions that

merely forbid voluntary assignments

necessarily play a lesser role.

@ 28 «

That Section 70l(a) reaches

only voluntary assignments of future

pay, if any, means that it contrasts

not only with Section 14 of the Railroad

Retirement Act but also with other

federal pension plan provisions.

Involuntary assignments are precluded

in no uncertain terms in these statutes

as well. The law governing federal

civil service pensions generally

forbids assignment, in law or equity,

and immunizes the pension from "execu-

tion, levy, attachment, or other legal

process." 5 U.S.C. § 8346. The

statutes governing Foreign Service

pensions and veterans' benefits contain

comparable language. See 22 U.S.C.

§ 1104 (Foreign Service); 38 U.S.C.

§ 3101 (veterans' benefits). Even

more strikingly, as appellant himself

points out, Congress has adopted "a

strong anti-assignment provision for

» 26 «

the Survivor Benefit Plan, 10 U.S.C.

§ 1440." (Appellant's Br: 30.) The

survivor benefit plan is an annuity

plan for the survivors of servicemen

financed out of deductions from retire-

ment pay. (See Appellant's Br. 21.)

The anti-attachment provision (a more

apt characterization than appellant's)

of the governing statute reads, "No

annuity payable under this subchapter

is assignable or subject to execution,

levy, attachment, garnishment, or other

legal process."

As long ago as 1792 the Con-

gress knew how to write a strong anti-

assignment, or anti-attachment, clause.

The very same day that the original

version of Section 701 was passed, appli-

cable only to enlisted men, Act of May 8,

1792, ch. 37, § 4, 1 Stat. 279, the

Second Congress made the arms and ammuni-

tion that a militiaman was required to

« 27 «

keep "exempted from all suits, distresses,

executions or sales, for debt or for

the payment of taxes." Act of May 8,

area, Gh. 33; $2, 1 Stat. 27172.

Appellant ascribes signifi-

cance to the fact that the Foreign

Service and Civil Service pension

systems have lately been amended to

make pensions subject to division as

part of a divorce decree. Foreign

Service Act of 1980, Pub. L. No.

96-465, § 820(b)(1), 94 Stat. 2120 (to

be codified as 22 U.S.C. § 4060); 5

U.S.C. § 8345(j)(1). (Appellant's Br.

24-25.) A similar amendment +o the

military retired pay provisions was

considered but not enacted in the 96th

Congress. H.R. 2817, 96th Cong., lst

Sess. (1979); H.R. 3677, 96th Cong.,

lst Sess. (1979); H.R. 6270, 96th

Cong., 2d Sess. (1980). Amendment of

the Foreign Service and Civil Service

» 28 «

pension laws was necessary because of

' the anti-attachment provisions of

those statutes. A mere clarification

of the military pension scheme, which

included no anti-attachment provision,

was by no means so urgent.* In any

Appellant quotes a statement by one

of these amici, Representative Schroeder,

the sponsor of H.R. 2817, as evidence

that existing law does not entitle an

ex-spouse to a share of a serviceman's

pension. (Appellant's Br. 25, n.35.)

(The full statement is attached as an

Appendix.) The bill would have

entitled a former spouse to a pro rata

share of a serviceman's pension,

provided that the couple was married

at least two years. It was in this

context that Rep. Schroeder said that

"(ujnder current law a divorced spouse

is prohibited from receipt of retire-

ment. . . benefits," Appendix at l,

to indicate that existing law does not

Give the former spouse any pro rata

share. Rep. Schroeder stated later on

that the reason legislation was needed

was to "clear up the confusion in the

courts about Congressional intent

regarding pensions." Appendix at 8.

These statements are not probative of

the meaning of § 70l(a). "The interpre-

tation placed upon an existing statute

by a subsequent group of Congressmen

(Footnote Continued)

o 29 «

event, the subsequent inconclusive

Congressional consideration is not a

ground for ascribing one meaning or

another to the existing statute.

"(T]he views of a subsequent Congress

form a hazardous basis for inferring

the intent of an earlier one." United

states v. Price, 361 U.S. 304, 313

(1960).

The short of it is that the

crystal-clear language of the statutes

involved in Hisquierdo and the precedent

cases, which this Court has rightly

required as a prerequisite to a decision

(footnote cont'd)

who are promoting legislation and who

are unsuccessful has no persuasive

significance [in the courts]." United

States v. Wise, 370 U.S. 405, 411

(1962). These amici claim no special

authority for the construction of

federal statutes urged in this brief

merely by virtue of the fact that

Representative Schroeder and other

members of Congress are among the

amici.

e 30 «

that Congress meant to intervene in

traditionally local affairs, is lacking

from the military pay statutes. Even

the much stronger clause in the Employee

Retirement Income Security Act of

1974, which requires private pension

plans to proscribe the assignment or

alienation of benefits, 29 U.S.C.

§ 1056(a)(1), has been held insufficient

to preempt state community property

law. In re Marriage of Campa, 89 Cal.

App.3d 113, 152 Cal. Rptr. 362 (1979).

This Court only last term dismissed an

appeal in that case for want of a

substantial federal question. 444

U.S. 1028 (1980). Moreover, the

intent to cut off the marital community,

which this Court inferred in Hisaquierdo

from the termination of a spouse's

annuity upon divorce, 439 U.S. at 584-85,

is absent here. And the anti-anticipa-

tion clause, which prevented an award of

“oe > or

offsetting community property in

Hiscuierdo, is absent as well.

D. No Discernible Congressional

Policy Is Frustrated by

Treating an Army Pension or

Pension Expectancy as

Community Proverty

The policy that underlies

Section 70l(a) is a familiar one.

Section 70l1(a) is no more than the

codification of a very old principle:

the law will not permit an assignment

of a public officer's salary. See

generally 6 Am. Jur. 2d Assignments

§ 52 (1963); 6A C.J.S. Assignments

§ 26 (1975); 70 C.J.S. Pensions § 9

(1951); 1 Scott, Trusts § 79 (3d ed.

1967). That rule is meant primarily

to protect the public. An employee

who has already frittered away his

future salary may not put forth his

best efforts on the job. There may

also be a desire to protect the public

o 29 «

servant against his own folly. See 4

Corbin, Contracts § 857 (1951).

In the case of Army and Air

Force officers, the anti-assignment

policy, if it exists, cannot be a very

strong one. There is no statute prohib-

iting their fellow officers in the Navy

and Marine Corps from assigning their

pay. There was no such prohibition

implied by statute even for Army officers

until 1907. The original anti-assignment

statute applied only to privates and non-

commissioned officers. Now Section

70l(c), that provision dates back to

1792. Act of May 8, 1792, ch. 37, § 4,

1 Stat. 279, 280. There is no illumina-

ting legislative history.* A statute

governing the assignment of pay by

As originally presented to the

House in February 1792, the bill to which

the anti-assignment provision was added

made no mention of assignments of pay.

1 American State Papers 46 (Misc. 1834).

o 93 «

commissioned officers was first enacted

in 1907. Act of March 2, 1907, ch.

2511, 34 Stat. 1158, 1159. Previously

commissioned officers were covered

only by Army regulations. See Act of

April 23, 1904, ch. 1485, 33 Stat.

259, 266. There is surely no basis

here for inferring the sweeping preemp-

tive effect for which appellant contends.

This is aside from the fact

that we deal here with retired pay,

with respect to which the need to

protect the public against the. improvi-

dence of its servant is minimal.

It has been argued that a

decision in favor of appellee would

unjustly reduce retirement benefits of

the bachelor sailor who has too much

to drink one evening and wakes up the

next morning only to find that he got

married the night before. While such

stories may be the grist of Hollywood

« 34°

script writers, we suspect that the

incidence of such events in real life

is so slight that the argument can

fairly be disregarded.

It has also been argued that

recruiting of military personnel would

be hindered by a decision upholding

California pension splitting. A

report by The President's Commission

on Military Compensation, however,

disagrees:

"The retirement plan apparently

has little influence on prospective

recruits or on service members in

their first enlistment. This

phenomenon results from the

strong preference among young

people for current income rather

than deferred income. For such

persons, up front compensation in

the form of pay or bonuses can be

a much more effective incentive

than retirement ... ." Report of

the President's Commission on

Military Compensation, p. 27,

April 1979.

o SS «

E. The Fact That for Some Purposes

Military Retirement Pay Is

Regarded as Pay and not a

Pension Does Not Prevent Its

Being Treated as Community

Property

Appellant argues that, because

Army retired pay "is continuation of

active duty pay -- in the nature of

reduced pay for reduced services"

(Appellant's Br. 38), it cannot be

treated by a state as what appellant

terms "divisible property."

The conclusion does not

follow from the premise. There is no

question of the continuing obligations

of the retired Army officer that

appellant describes. Nor can one

doubt the authority he cites for the

Proposition that retired pay is, for

some purposes, different from a pension.

Yet, it is hard to imagine that Colonel

McCarty, just like the California

courts (Appellant's Br. 37 n. 59), has

@ 36 «

not in unguarded moments referred to

his Army pension. Of course, the

compensation he is now receiving is in

the nature of a pension -- as well as

in the nature of reduced pay for

reduced services. For most retired

officers, the services are reduced to

nothing. California was entitled to

look to the realities and not to form.

The realities are that the expectancy

of retired pay came into being during

the existence of the marital community.

The officer was married when he performed

the services that entitled him to

retire with continued compensation.

Thus, it is appropriate to treat the

expectancy, as the California courts

have, as an asset of the marital

community. No federal statute defining

the nature of retired pay forbids such

treatment. As we have seen, Congress

last year acted to allow the division

« 379 «

of Foreign Service retirement pay

(Pp. 27, supra); like military officers,

retired Foreign Service officers

are -- by the same amendatory statute --

liable to recall for active service.

Foreign Service Act of 1980, supra,

§ 308, 94 Stat. 2086 (to be codified as

22 U.S.C. § 3948). |

In none of the other respects

suggested by appellant does the California

treatment of retired pay impinge upon

any defined federal interests.

Appellant suggests that the

"implication" of the California decision

to apply community property principles

to military retired pay is that the

divorced wife -- assuming that the

member of the service is the husband --

has an "entitlement" to retired pay

for as long as she lives, irrespective

of whether her spouse predeceases

her. (Appellant's Br. 32.) There is

« 38 «

of course no substance to this sugges-

tion. No person can claim any greater

"entitlement" to retired pay than

federal law itself permits. Under

federal law, the duration of military

pay is limited to the lifetime of the

person whe earned it; when that person

Gies, the benefit ceases to exist.

That fact of life has already been

recognized by the California courts

themselves. See, e.g., Fithian v.

Fithian, 10 Cal.3d 592, 599, 517 P.2a

449, 111 Cal. Rptr. 369 (1974), cert.

Genied, 419 U.S. 825 (1974).

Appellant's conjecture that

a serviceman's ex-spouse might attempt

to control the serviceman's decision

whether to remain in the military is

Similarly misguided. Appellant's Br.

32-33. The California Supreme Court

has already specifically stated that

it does not believe that its community

« 39 «

property treatment of retired pay in any

way limits "the employee's freedom to

change or terminate his employment, to

agree to a modification of the terms of

his employment (including retirement

benefits) or to elect between alterna-

tive retirement programs.” In re

Marriage of Brown, 15 Cal.3d 838, 849,

$44 P.2d 561, 126 Cal. Rptr. 633 (1976).

Under California law, "[t]he employee

retains the right to decide, and by his

decision to define, the nature of the

retirement benefits owned by the commu-

nity." 15 Cal.3d at 850. In short,

there is simply no basis for appellant's

suggestion that the California courts

might attempt to "intervene... in the

operation of the personnel system of the

Army" by attempting, on behalf of an ex-

spouse, to control the decision of the

former spouse with respect to continued

military tenure. Appellant's Br. 33.

a 40 «

II. THE NATIONAL POLICY THAT

FAVORS PROVISION FOR THE

FINANCIAL NEEDS OF THE

ELDERLY WOULD BE SUBVERTED

BY A DECISION THAT CALIFOR-

NIA LAW HAS BEEN PREEMPTED

There is an undoubted national

policy that favors caring for the

financial needs of people in their

later years. The expressions of the

policy are too many and too familiar

to bear citation. The provision of

military retired pay is itself one

such expression and -- for the military

wite whose marriage lasts until the

the husband dies -- the military

Survivor benefit plan to which we have

referred is another. But, unless the

States are left free, as a decision

against preemption in this case would

leave them free, to divide military

retired pay on dissolution of a marriage,

the national policy will not be well

served in the case of the military

= 61 «

spouse whose marriage fails. The case

in which the Court is asked to decide

against preemption comes from a commun-

ity property state, but the impact of

a decision against preemption would

not be limited to the community property

States. States other than the community

property states make equitable distribu-

tions of marital property upon divorce,

distributions that are comparable to

treatment of the property as that of

the marital community. See, e.g.,

Chisnell v. Chisnell, 82 Mich. App.

699, 267 N.W.2d 155 (1978), cert.

denied, 442 U.S. 940 (1979); Kruger v.

Kruger, 139 N.J. Super. 413, 354 A. 2d

340 (1976); In re Marriage of Musser,

70 Ill. App.3d 706, 388 N.E. 2a 1289

(1979). Those states would be as free

as California to give effect to national

policy in their divorce decrees.

» 42 «

To provide financially for

military spouses whose marriages fail is

particularly urgent because (1) most of

them are women, who as a group are less

likely to enjoy appreciable pension pay-

ments than men, and (2) the military life

imposes extraordinary limits upon the

ability of the military wife to earn a

pension of her own.

In 1978 only 29 percent of

women aged 55 or older, and only 9 per-

cent of women aged 65 or older, who

maintained families without a husband

were employed. The median income for

these women between the ages of S5 and

64 was $4,533. For women from the

group who were 65 and older, it was

$3,087. In 1976, 72 percent of

. Department of Commerce, Bureau of

the Census, Social and Economic

Characteristics of the Older Population:

1978, p. 20.

unmarried elderly women had incomes

below the poverty line.’

With most elderly women

unemployed and living on near-poverty-

level incomes, the need for a pension

Guring old age is acute. Yet the

barriers to earning entitlement to a

pension in private employment are such

that even most women in the work force

reach retirement age without pension

rights of their own.

Employed women are less

likely than men to be covered by

private pension plans, because -- for

the most part -- they work in poorer

industries where fringe benefits such

as pensions do not exist. In addition,

women are less likely than men to be

union members and therefore less

. President's Commission on Pension

Policy, An Interim Report, p. 28, May

1980.

« 44 «

likely to benefit from pensions pro-

vided under collective bargaining

agreements. Since women are paid

about 59 percent of what men earn,

even for the woman who does earn a

pension, the pension benefits are

likely to be smaller.‘

The right to earn a pension

1s often foreclosed to women because

they interrupt their work to bear and

rear children. Although women between

the ages of 20 and 24 have the highest

labor force participation rate (68.3

percent in 1978), by age 25 many women

drop out for child rearing. The

Employee Retirement Income Security

Act of 1974 (ERISA), 29 U.S.C. § 1000

et seq., which governs private pensions,

° Benson, Women and Private Pension

Plans, presented to the U.S. Dept. of

Labor Advisory Council on Employee

Welfare and Pension Benefit Plans,

Pp. 3, November 1980.

« 68 «

permits an employer to require an employ-

ee to work 10 years before becoming

entitled to a pension.® This is a

distinct hardship for women, who are

likely to hold their jobs for shorter

periods than men.*® For example, a

woman who works from age 18 until age 25

and then drops out to have a child may

not be entitled to a pension at all

because she has not worked 10 years.

Furthermore, ERISA permits private pen-

sion plans to require an employee to work

at least 1,000 hours in a year before

° 429 U.$.¢C. § 105838.

48 Department of Labor, Bureau of

Labor Statistics, News Release USDL

79-285, April 23, 1979; Congressional

Research Service of the Library of

Congress for the Subcommittee on

Retirement Income and Employment of

the House Select Committee on Aging,

Women and Retirement Income Program:

Current Issues of Equity and Adequac P

Committee Pub. No. 96-190, 96th Cong.,

lst Sess. (1979).

/

« 46

entering a plan.'* Women are far more

likely than men to work fewer than 1,000

hours. *?

The obstacles to earning a

pension in the private sector are parti-

cularly high for wives of servicemen.

The life of a military wife is different

from that of her civilian counterpart.

Military people have to move frequently,

sometimes overseas or to parts of this

country where jobs for women are not

easy to find. Appearing before the

Citizens Conference on Pension Policy on

September 5, 1980, a representative of

an organization of former military wives

testified that 15 moves in a 30-year

career was not unusual.’? Among 211

s+ See 29 U.S.C. § 1052.

‘2 Benson, supra, p. 44.

‘3 Testimony of Winnifred Cowan on

behalf of Ex-Partners of Servicemen for

Equality to the Citizens Conference on

Pension Policy, September 5, 1980.

oe 47 «

members of the organization surveyed,

the average length of the wife's

Marriage was 22 1/2 years. During the

marriage, an average of 12 moves were

made.**

Frequent moves prevent a

military wife from accumulating an

employment tenure that would entitle

her to earn her own retirement benefit.

And private employers are wary of

hiring a military wife because her

husband will inevitably be reassigned

to another duty station. Even when

military wives are able to obtain a

job, they earn less than their

civilian counterparts. Department of

Defense, Report of the Pay Adequacy

Study, October, 1979.

+* Testimony of Winnifred Cowan on

behalf of Ex-Partners of Servicemen

for Equality before the House Armed

Services Subcommittee on Military

Compensation, May 28, 1980.

@ 46 «

Traditions and customs

within the military community have

also discouraged military wives from

working. Officers' wives, such as

appellee, are less likely to work

(16.2 percent) than enlisted men's

wives (31.6 percent). This is of

course partly because officers are

paid more, "but also because the role

of the officer's wife is subject to

more specific normative regulation.

Officers' wives are generally dis-

suaded from outside employment, but no

such norm affects the wife of an

enlisted man." Little, Occupational

Socialization 253.

Testimony by the former wife

of a general before the House Armed

Services Subcommittee on Military Com-

pensation on May 28, 1980, illustrates

the point. She testified that she was

always expected to nurture her husband's

oe 49 «

career from the sidelines by attending

wives' club functions, entertaining,

doing volunteer work, and attending .

command functions.**® In addition to

these responsibilities, long absences

of the military man from his home and

family require the presence of the

wife in the home, further preventing

her from engaging in outside employment.

"The average Navy career involves at

ed

least 7 out of 20 years spent away

from home, in extreme cases, many

more. The Navy spouse, left with

children to care for and with a house-

hold to manage, must act for months at

a time as independently as a single

parent." Dingle Associates, Inc., The

Navy Leaders’ Family Manual prepared

for Department of the Navy, p. 3, 1980.

es

« 80 «

Wives of commanding officers

have special duties. A publication

entitled Guidelines for the Wives of

Commanding and Executive Officers,

compiled by the Protocol Committee of

the Navy Wife Line Association (1977),

states that

"this is her time to make a visible

and necessary contribution both to

the Navy and to the country. She

has a very important part to play

in (her husband's) success as a

commanding officer. During her

husband's command, she is a person

set apart. She has heightened

responsibility to her husband and

his career." (p. 1)

An independent career for a

commanding officer's wife is not encour-

aged because she is expected <o have a

great deal to do at home. In fact the

Guidelines urge the commanding officer's

wife to

"put in extension phones with extra

long cords (or remote phone jacks)

in all major work areas, i.e.,

laundry room, kitchen, den, and

bedroom. Always take calls in an

area where there is work to be

« $i «

done. It can be amazing how much

laundry can be done, how much

baking, dinner preparation, or

just plain cleaning can be done

on the end of a 13-foot cord.

The cost of the long cords and

extensions will more than pay for

themselves if they enable keeping

up with domestic duties -- even

if a significant time is spent on

the phone.” (p. 11).

The nature of the military

compensation system aggravates the

hardship for the former military

spouse who is not awarded a portion of

her former husband's retirement benefit.

Traditionally, military compensation

differs from civilian compensation in

that current pay is relatively low,

but pension benefits are relatively

large. For example, the lifetime

value of the typical United States

military retirement pension for an

officer with 20 years of service who

retires at age 43 is $420,000. For an

officer with 30 years of service who

retires at age 53, the pension is

» $2 «

worth $590,000. Report of the Presi-

dent's Commission on Military Compensa-

tion, p. 31, April, 1978.

Because of the low current

pay and expectation of a generous re-

tirement benefit, most servicemen do

not accumulate assets other than the

retirement benefit. This lack of

Savings and investment is encouraged

because the government provides housing

to over one-third of all eligible per-

sonnel. Little, Occuvational Sociali-

zation 258. The frequent changes in

Guty assignments and relocation of

residence force most servicemen to

rent rather than buy their homes.

Consegently, equity build-up that

civilian homeowners enjoy exists far

less among military couples.

The nomadic lifestyle of the

military family and the lack of current \

asset accumulation breed a strong

« $3) «

dependence on military benefits for the

serviceman's wife and family. The

Library of Congress reported to the

Rouse of Representatives Select Committee

on Aging that, upon divorce, spouses

"do not retain any entitlement to

nonmonetary benefits due to spouses

of military retirees, such as medi-

cal care, exchange and commissary

privileges, and use of certain mili-

tary base privileges. It has been

argued by many observers that the

abrupt cut-off «cf compensation and

benefits to the divorced spouse of

a military retiree is grossly

inequitable. These persons cite

the sacrifices made by military

Wives during the course of the

military career with attendant

moves (which interfere with che

wife's ability to establish her

Own career), long intervals of

managing a household during a

husband's absence, and arduous,

irregular, and long working hours

and conditions."?§

16 Congressional Research Service of

the Library of Congress for the Subcom-

mittee on Retirement Income and Employ-

ment of the Select Committee on Aging,

House of Representatives, Women and

Retirement Income Programs: Current

Issues of Equity and Adequacy, Comm. Pub.

No. 96-190, 96th Cong., lst Sess. (1979).

» $4.6

Another study of Navy wives

by Dr. Sabra Wolley-Downs of the

Family Services Section of the Bureau

of Navy Personnel found that, within a

group of older women surveyed, most

wanted their husbands to finish 20

years in the Navy, since at that point

the servicemen would become entitled

to retirement benefits.

The plight of the ex-military

wife has recently come under scrutiny

by the Government's policymakers.

Their unanimous conclusion is that

retirement benefits should be appor-

tioned between both spouses upon the

dissolution of the marriage.

In August of 1980 the Presi-

dent's Commission on Pension Policy

noted that "there has been explicit

recognition of the earnings sharing

approach to earned pension benefits in

recent divorce settlements, particularly

«. $8 «

in community property states." Working

Papers: Working Women and Retirement,

Pp. 41, August 1980. In the Commission's

Interim Report in May of 1980 the

Commission stated that it

"believes that employee pensions

should be taken into account when

people divorce, and survivor

protection should be automatic

for married and divorced spouses.

For divorced spouses, the survivor

protection should be prorated

based on years of pension service

accrued during the marriage."

(mp. 32).

The Commission's draft of its final

Staff Recommendations on the subject

of pension and divorce states that "it

is the intent of the Commission to en-

courage state divorce courts and

attorneys handling marital dissolutions

to consider earned pension benefits as

divisible marital property." (Section

V) Underlying the Commission's staff

recommendation of pension splitting is

its belief ... "that a nonemployed

« 86 «

‘spouse whose share of marital community

property has centered around home and

children should not be left without

pension income as a consequence of the

divorce; particularly where pension

benefits have been accrued during the

marriage and credited to the employee's

spouse." (Section I).

In summary, the national

policy clearly favors the right of a

former military wife to a proportion-

ate amount of her former husband's

military retirement benefits. Thereby

the military wife whose marriage

fails, who was prevented from earning

her own pension while contributing to

her husband's military career, will

have a measure of financial protection

in her old age.

» 37 «

CONCLUSION

Amici believe it important

that the judgment below be affirmed

for the reasons stated herein.

Respectfully submitted,

WILLIAM H. ALLEN

(Counsel of Record)

JEFFREY S. GERSHMAN

JOSEPH A. GODLES

STEPHEN J. NARKIN

Covington & Burling

888 Sixteenth

Street, N.W.

Washington, D.C. 20006

(202) 452-6192

Attorneys for Amici Curiae

TESTIMONY BEFORE THE

HOUSE ARMED SERVICES

SUBCOMMITTEE ON

MILITARY COMPENSATION

By Rep. Fatricia Schroeder (D-Colo)

May 28, 1980

, Thank you very much for the

opportunity to testify before this

Subcommittee on the plight of military

former spouses, and in particular on

my bill, H.R. 2817.

I applaud this Subcommittee

for holding hearings on this matter.

The issue raised is one for which

serious consideration is long overdue.

When a military man divorces

his wife, the wife not only loses a

husband but also her claim to his

military retirement pay and survivors'

benefits. Under current law a divorced

spouse is prohibited from receipt of

retirement or survivors' benefits even

when a marriage lasted 20 or 30 years.

The result: displaced military home-

makers who have no claim to the retire-

ment income that they have helped to

earn.

The military former spouses'

situation has been aggravated by

recent social changes. First, the

divorce rate has doubled in the last

10 years with the rate for long term

marriages ending in divorce increasing

substantially. Second, all but three

states have moved to some form of

no-fault divorce since 1974, with

limited, if any, spousal support or

alimony provided. Third, alimony is

no substitute for a vested property

right, since alimony ceases with the

death of the wage earner.

Last May, I introduced H.R.

2817, the Military Retirement Income

Equity Act to remedy the inequities

military former spouses face. The

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bill entitles a former spouse to a pro

rata share of their spouse's retirement

pay if the couple were married at

least 10 years, awards a pro rata

share of survivors’ benefits to a -

divorced spouse, and makes survivors'

benefits mandatory unless the employee

and his spouse and or former spouse

(if any) choose to waive the receipt

of survivors' benefits.

H.R. 2817 is based on the

premise that, among other things,

marriage is an economic partnership

and that a spouse makes a significant

contribution to the military employee's

ability to go through the ranks success-

fully, and consequently receive a

pension.

This concept was recently

acknowledged by the President's Commis-

sion on Pension Policy. In its interim

report it recommended that pensions be

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defined as a property right and that

divorced spouses be entitled to a

prorated portion of the benefits

earned by their spouses during the

marriage.

A couple marries and establishes

a household, often deciding that the

husband, who's in the Armed Forces

will supply the family income and the

wife will work in the home without

wages and care for their children.

They have established their economic

partnership. It seems fair enough.

Then, 20 or 30 years down the road,

the couple decides to divorce, and

suddenly the marital balance is tipped.

The military retiree walks away from

the divorce with a full retirement

plan and the spouse, after putting in

just as many years in the home as her

husband devoted to the military, walks

away with nothing.

We are a society which

places value on home and family,

encouraging women to stay at home and

take care of their children. Yet, one

of the most severe forms of economic

discrimination is that we fail to

attach an economic value to this

service.

We give wonderful lip service

to the reverence of the role of the

woman in the home. The plight of the

displaced military homemaker is an

example of how in the home, a woman's

role as housewife and mother receives

reverence and honor -- but no monetary

value. Unfortunately, the honor a

woman gets for staying at home and

raising children won't buy groceries,

pay medical bills or send the kids to

college.

Military wives know lots

about honor. They have put up with

many difficult conditions for the good

of their country. These spouses have

traditionally contributed to the

undertakings of the military, sharing

the hardships of living abroad, with

limited opportunity to maintain separate

Careers. They have been subject to

the frequent uprooting that accompanies

changes of duty station, irregular

hours, and long periods of separation

peculiar to military life. As THE AIR

FORCE WIFE, a book by Nancy Shea

published in 1951 stated, "...every

Air Force Wife has 3 basic responsibili-

ties: (1) to make a congenial home,

(2) to rear a family of which he will

be proud, and (3) to strengthen her

husband's morale". Indeed, the armed

forces have given retirement certificates

to the wives acknowledging their years

of service along with their husband's.

The legislation would award

a pro rata share of the retirement

benefits to a divorced spouse, male or

female, married for at least 10 years.

The exact amount of the former spouse

annuity would depend upon the number

of years of marriage that overlap with

the credited years of service toward

retirement. At a maximum, the former

spouse annuity would amount to 50

percent of the retirement benefits, if

married during the entire period of

creditable work years.

Furthermore, the former

spouse would be entitled to a pro rata

share of the survivors’ benefits,

which would amount to the maximum 55

percent of the lifetime annuity if

married during the entire period of

creditable service. A surviving

spouse would be entitled to benefits

based on the number of years of marriage

during creditable service, as well as

the remainder of the survivorship

benefit not claimed by the first

spouse, including credit for any years

during which the employee was not

married.

The legislation would make

survivors' benefits mandatory unless

the retiree, spouse, and former spouse

(if any) elect out of the survivorship

plan. While this step may be controver-

Sial, it appears to be necessary.

First, many retirees are not fully

aware of the consequences of their

irrevocable decision at the time of

the retirement, but when they later

discover that they have made a mistake,

it is loo late to rectify it. Second,

widows, who discover after the death

of a spouse that they have no survivors’

benefits, write frantic letters to

their Members of Congress, only to be

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informed that under the law they are

entitled to no benefits if their

spouse opted out of survivors' benefits

at the time of retirement.

As of September 1977, there

were 1,155,000 military retirees

drawing retired or retainer pay, and

of that number only 55,446 provided

survivors’ benefits for their spouses.

While more retirees have opted for

survivors’ benefits in recent years,

the magnitude of the problem is evident

when we look at the record in fiscal

year 1976 when there were 64,000

military retirees, of which only 50

percent chose to participate in the

survivors’ benefit plan.

As a result, approximately

30,000 surviving spouses found themselves

ineligible for survivors' benefits.

While there is an actuarial reduction

of retired pay during the retiree's

lifetime to pay for survivors' benefits,

the amount of the reduction is minimal

compared to the cost to the survivors

of no benefits following the death of

the retiree. For example, for the

average enlisted man whose retirement

pay equals $423 per month, the reduction

for the survivors’ benefit would be

only $20 per month. For the average

officer who receives $841 per month,

the reduction would be only $62 per

month.

Unlike civil service and

Foreign Service members, military

personnel do not pay into the military

retirement system, although since 1957

members of the armed services have

made mandatory contributions for

social security coverage. While this

gives military spouses and former

spouses more protection than is available

to spouses in other Federal retirement

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programs, it is still not adequate

protection. First, the former spouse

cannot draw social security benefits,

regardless of her age, until the

military spouse retires and begins

collecting social security benefits.

Since military personnel frequently

retire at an early age and begin

another career at midlife, many work

well beyond age 65, thus preventing a

former spouse from receiving social

security benefits.

Second, even if a spouse or

former spouse is entitled to both

social security and benefits through

the survivors’ benefits plan (SBP),

dual benefits are not paid since the

amount of social security attributable

to the husband's military service is

offset from the SBP payments. Third,

social security was never intended to

provide the sole retirement income to

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a retiree or spouse, but to supplement

other retirement income. In fact,

those women who depend solely on

social security subsist well below the

poverty level of $2,900 for single

older women, since the average payment

for women is $2,676 annually or $223

per month.

I thought the subcommittee

would find it interesting that the

President's Commission on Pension

Policy in its interim report recommended

that survivor protection should be

automatic for married and divorced

spouses. To waive the benefit protec-

tion, both spouses should have to sign

a waiver witnessed by the plan adminis-

trator or agent after having been

informed of the provision by the

administrator. For divorced spouses,

the Commission recommended that the

survivor protection should be prorated

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based on years of pension service

accrued during marriage.

The idea of a divorced

spouse being entitled to her former

husband's pension is nothing new.

Under social security, if a wife has

been married to a covered worker for

at least 10 years at the time she is

divorced, she will be entitled to a

divorced wife's benefit or a surviving

divorced wife's benefit. This is the

same benefit which is provided to a

wife or widow of a covered worker.

Other countries also recognize

a former spouse's right to her former

husband's retirement benefits. In the

United Kingdom, any divorced individual

is entitled to use the earnings records

of the ex-spouse only for the time of

the marriage in order to determine the

first tier, flat benefit only. In

West Germany, a 1977 law required that

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‘the earnings credits accumulated

during the marriage by either spouse

are shared equally upon divorce. In

1978, Canada's social security pension

system provided pension credits that

were split equally in event of a

divorce after at least three years of

marriage. When the divorced spouse

dies, the Swiss, British, and West

German social security pension systems

generally split the survivors' benefits

between the divorced wife and the

surviving wife on the basis of how

long each was married.

I have also introduced

legislation to amend the civil service

and Foreign Service retirement systems

with the same provisions set forth in

H.R. 2817. The civil service bill,

H.R. 2818, is still in the House Post

Office and Civil Service Subcommittee

on Compensation and Employee Benefits.

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However, the Foreign Service bill,

H.R. 2857, has been amended and included

in H.R. 6790, the Foreign Service Act.

The bill will go to the floor early

this summer.

The Foreign Service provision

as amended provided for a pro-rata

division of retirement and survivor's

benefits, based on the number of years

of marriage, between the member of the

Foreign Service and the former spouse.

This pro-rata division was a presumption,

subject to affirmation, modification,

or vitiation by the state family law

court. This bill gave the current

spouse and former spouses of over ten

years a right to sign off before the

participant waived all survivor's

benefits.

I mention this language

because it may provide the route this

subcommittee might want to go when

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considering legislation surrounding

this issue. The court order language

in this provision permits the courts

to vary the pro-rata share if there is

overwhelming cause that it should be

changed. The court wouid be allowed

to make adjustments with the entitlemen‘

or vested interest. This provision

would also permit spouses to make

voluntary settlements or negotiate a

settlement with the court when it

would be to the former spouses’ advan-

tage to take cash or other assets in

lieu of the pension benefits.

I think the pro rata presump-

tion is important to set forth in

federal legislation. Because of the

variations in state domestic relations

law, the pro rata presumption is

needed to instruct attorneys and

judges to consider the vension rights

and needs of the individuals involved

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in a divorce. Although precedent was

set in California in a legal malpractice

case which required a lawyer to pay

his client $100,000 for failure to

include the military pension as part

of the marital property, most states

do not have such incentives.

Moreover, there has been

considerable confusion in the courts

concerning the intent of Congress.

The Supreme Court, in the Hisquierdo

decision, interpreted the intent of

Congress to prevent traditional community

property state treatment of pensions

as marital property. Therefore, it is

imperative that there be a strong

statement from Congress to clear up

the confusion in the courts about

Congressional intent regarding pensions.

I hope this subcommittee

issues such a strong statement by

adopting H.R. 2817. Many women are

depending upon you.

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