COA affirms post-retirement survivor benefits for ex-military spouse

A Hamilton County woman is entitled to a post-retirement survivor benefit offered by her ex-husband’s military retirement program, the Indiana Court of Appeals affirmed Tuesday.

After more than 30 years of service and multiple deployments, Rick Story left the United States Army Reserve and subsequently filed for divorce. Rick and his wife, Allyson Story, eventually entered into a mediated settlement agreement that was adopted and incorporated into their dissolution decree.

The agreement stated in part that Allyson “shall be treated as Husband’s surviving spouse for the purpose of any pre-retirement survivor’s benefit and shall be entitled to receive her Military Reserve Survivor Pension free and clear of any claim by Husband.” It also stated that she “shall be treated as Husband’s irrevocable beneficiary for Husband’s Military Reserve Annuity Retirement and Husband shall make the necessary election in a timely manner to effectuate survivor coverage for Wife… .”

Meanwhile, Rick executed an optional survivor benefit plan election statement for former spouse coverage that would provide survivor benefits to Allyson should he die before her. The premiums for the SBP would to be deducted from his military retired pay and ultimately accrue and be due when he starts receiving it.

However, Rick refused to sign an addendum prepared by Allyson’s counsel to the mediated settlement agreement for the parties’ signatures “that included the necessary information to meet the (Department of Finance and Accounting Services) requirements” for calculating the division of his military retired pay. Rick asserted that the cost of the premiums for the Survivor Benefit Plan had not been accounted for in the settlement agreement.

The Hamilton Superior Court held that Allyson was entitled to pre-retirement survivor’s benefits and that the agreement was silent as to how or who would pay the premium, thus ordering that she reimburse Rick 50% of what’s withheld from his benefit each time it is withheld for the premium.

But when Rick later requested a clarification as to whether Allyson was not entitled to his retired military pay SBP, a new judge ordered that Allyson was entitled to receive a portion of his post-retirement SBP, as well as the pre-retirement.

A panel of the Indiana Court of Appeals affirmed in In Re the Marriage of: Rick Story v. Allyson Story, 19A-DC-2385,

https://www.in.gov/judiciary/opinions/pdf/05192001ewn.pdf finding, among other things, that no evidence supported Rick’s assertion that he has a unilateral, unqualified right to cancel Allyson’s survivor benefit coverage after he reaches retirement age under the settlement agreement.

It therefore held that the trial court did not err when it found she was entitled to the survivor benefit during both the pre-retirement and post-retirement periods.

Additionally, the appellate court concluded that the trial court properly interpreted the agreement and, with the consent of the parties, only modified the agreement to provide for how the survivor benefit coverage premiums will be paid.

“At the hearing on Wife’s motion for court intervention, the parties agreed that the cost of the premiums for the survivor benefit plan had not been accounted for in the settlement agreement, and they consented to have the court determine who should pay the premiums for that coverage. As such, on the question of who should pay the premiums, the parties consented to the court’s subsequent modification of their agreement. Husband’s assertion on appeal that the modification violated the terms of the parties’ agreement because he only agreed to pre-retirement survivor coverage is incorrect,” it wrote.

“Both the text of the agreement and the corresponding (Department of Defense) regulations providing for former spouse survivor coverage demonstrate otherwise. In response to Husband’s motion to clarify, the dissolution court did not err when it held that under the agreement Wife is entitled to both pre-retirement and post-retirement survivor benefits and that the parties shall each pay fifty percent (50%) of the premiums for that coverage,” the appellate court concluded.