Divorce for Oregon Public Service Retirement Plan (OPSRP) members

APs and former RDPs benefit directly from the member’s benefit

Court orders may allow for an alternate payee (AP) or former registered domestic partner (RDP) to receive a benefit withheld directly from each benefit received by the member and possibly the member’s beneficiary.  

The court order or forms must award benefits by:  

• A direct percentage to be withheld from the member’s actual benefit payments.
• A percentage of a married time ratio method resulting in a percentage to be withheld from the member’s actual benefit payments (only available for nonretired members).
  OR
• A specific dollar amount to be withheld from the member’s actual benefit payments.

PERS cannot administer an award that combines a percentage and a dollar award.  

When an award pays an AP or a former RDP directly from the member’s benefit, the AP or former RDP will receive payment at the same time the member receives service retirement or death benefits*, as provided for in the court order. This award method also allows for restrictions to be added requiring a member to elect a specific benefit payment option and beneficiary at retirement.  

Reduction benefits are paid for the lifetime of the member and possibly the member’s beneficiary’s lifetime, as directed by the court order. Deduction benefits are only payable for the member’s lifetime due to taxation issues.  

Reduction awards converted to Separate Benefit awards

Some Reduction awards are converted to Separate Benefit awards; review the “Separate Benefit awards” section for details.  

If an AP has the choice of receiving a Reduction or a Separate Benefit Award and chooses a Separate Benefit, the AP must submit an Alternate Payee OPSRP Pension Program Separate Benefit Application requesting benefit distribution. Once the AP’s Separate Benefit is established, the member is released from all preretirement beneficiary restrictions and retirement option/beneficiary restrictions. The release triggered by the application submission is irrevocable once accepted by PERS.  

Death before retirement

Member dies before the AP or former RDP

The court order may state that the AP or former RDP is beneficiary for:  

• A specific percentage of the death benefits.
• A percent of the awarded married-time ratio of the death benefits.
  OR
• The member is not required to name the AP or former RDP as a preretirement beneficiary. If the AP or former RDP is not designated as a preretirement beneficiary and the member dies before retirement, the AP or former RDP will receive no benefits.

AP or former RDP dies before member

The court order may state that the AP or former RDP award:  

• Reverts to the member — 100% of benefits will be payable to the member.
• Be paid to the AP’s or the former RDP’s surviving spouse, if any, as a Reduction or Deduction from the member’s retirement benefit when the member retires. For Reduction awards that are payable to the AP’s surviving spouse from the member’s retirement benefits, the court order also should state whether the AP benefit continues to be paid to the AP’s surviving spouse after the member’s death, if the member has selected a survivorship retirement option. (A Deduction benefit cannot be paid to an AP or former RDP or to the AP’s or the former RDP’s beneficiary from the member’s beneficiary benefit.)

If the AP or former RDP dies before retirement and does not have a surviving spouse at that time, all benefits revert to the member. 

Death after retirement

Member dies before the AP or former RDP (five possible situations)

AP or former RDP dies before member

The court order may provide that the AP or former RDP award:  

• Revert to the member, with 100% of benefits payable to the member.
• Be paid to the AP’s or the former RDP’s beneficiary as a Reduction or Deduction from the member’s retirement benefit. For Reduction awards that are payable to the AP’s beneficiary from the member’s retirement benefits, the court order also should state whether the AP benefit continues to be paid to the AP’s beneficiary after the member’s death, if the member has selected a retirement option with death benefits. (A Deduction benefit cannot be paid to an AP or former RDP or to an AP’s or former RDP’s beneficiary from the member’s beneficiary’s benefit.)

Member withdrawals

Senate Bill (SB) 1049 (2019) eliminated pension withdrawal provisions for OPSRP members. OPSRP members can still withdraw their Individual Account Program (IAP) account. However, if an OPSRP member withdraws their IAP, their OPSRP membership is terminated, and they will not receive lifetime monthly benefit payments from PERS in retirement.  

If an AP or former RDP has been awarded a Reduction, Deduction, or Separate Benefit, the member will not be allowed to withdraw their IAP account unless the court order clearly states that:  

• The member is allowed to withdraw from OPSRP membership.
  AND
• This action will negate any OPSRP AP or former RDP benefit awarded.

If the court order states that information and the member does withdraw, the AP or former RDP will not receive any OPSRP benefits.  

AP and former RDP withdrawals

An AP or former RDP cannot withdraw.  

Award methods

A court order can use one of two methods to make the award:  

• A set monthly dollar amount or set monthly percentage award.
  OR
• A married time award or ratio method; this method applies only to nonretired awards.

Under the set dollar amount or set percentage method, a set amount or percentage of any benefit due is awarded to an AP or former RDP. The award is withheld from the member’s monthly benefit at the time the member retires or goes into pay status and is paid to the AP or former RDP at the same time and in the same manner as it is to the member. Set monthly dollar awards are not subject to increases, such as cost-of-living adjustments (COLA). Set monthly dollar awards are converted to a percentage of the benefit if the member receives a lump sum.  

Under the married time ratio method, an award is calculated by dividing the married service time specified in the court order by the member’s total creditable service time when benefits are due to determine the percentage of the retirement benefit that accrued during the marriage or partnership. The resulting fraction is multiplied by the percentage awarded to the AP or former RDP. The resulting percentage is then applied against the member’s retirement benefit. This amount is paid to the AP or former RDP monthly or in a lump sum, based on the benefit paid to the member.  

Tax liability

The difference between a Reduction and a Deduction Award is which party has tax liability for payments made to the AP/former RDP. 

In a Reduction Award, each party is responsible for paying taxes on the benefits they receive.  

In a Deduction Award, the member is responsible for paying taxes on all benefits paid, including the benefits paid to the AP or former registered domestic partner (RDP). The member will receive a 1099-R issued under the member’s Social Security number reporting the benefits paid to the AP or former RDP. To comply with Internal Revenue Code, a dissolution of a registered domestic partnership can provide a Deduction Award to a former RDP but cannot provide a Reduction award to a former RDP.  

Post-retirement beneficiary change (retired members)

A member who retired under a Survivorship option (Full Survivorship, Full Survivorship Increase, Half Survivorship, Half Survivorship Increase) is allowed to change their beneficiary if they meet the following criteria:  

• The AP is the member’s current beneficiary.
• The court order is not a dissolution of registered domestic partnership.
• The court order specifically states the member is allowed to change their beneficiary.
  AND
• The court order provides an award to the AP. (A one-time, $1 award would satisfy this criterion.)

The AP will remain beneficiary until PERS receives a valid Divorce: Post-retirement Survivorship Beneficiary Change form. The form asks for the new beneficiary’s full name, address, Social Security number, and date of birth. Age verification documents also are required for the new beneficiary.  

Once a beneficiary change is accepted by PERS:  

• The member’s monthly benefit will be recalculated based on a blended factor of the original beneficiary’s and the new beneficiary’s ages.
• The member’s monthly benefit amount may increase or decrease.
• The change will be effective on the first of the month after the month in which PERS receives a valid request to change the beneficiary, and it will be payable the first of the month following the effective date.
• The member will receive any underpayment or be invoiced for any overpayment of benefits retroactively back to the effective date.

If the member’s new beneficiary is younger than the current beneficiary, it can significantly reduce the member’s benefit. It is advisable for members to use the Divorce: Survivorship Beneficiary Changes Estimate Request form to request a benefit estimate prior to requesting a survivor beneficiary change due to divorce.  

A survivor beneficiary change due to divorce is a one-time, irreversible change. A survivorship option beneficiary change due to divorce is final once processed by PERS and subsequent beneficiary changes are not allowed.  

If a member retired under a Survivorship Increase option (Full Survivorship Increase or Half Survivorship Increase) and is both eligible to change their beneficiary and is not restricted from changing to a higher-paying benefit option (aka “popping up”), the member can do either but not both. Once a beneficiary change has been processed, the member is no longer eligible to change to a higher-paying benefit option due to divorce. Once a member’s request to “pop up” has been processed, the member is no longer eligible to change their beneficiary.  

Changing to the higher-paying Single Life Option (retired members)

A retired member who named their former spouse as beneficiary of a Survivorship Increase option (Full Survivorship Increase or Half Survivorship Increase) at retirement will be allowed to request a benefit option change to the higher-paying Single Life Option (aka “pop up”), if:  

• The member is divorced (not legally separated) or a former registered domestic partner.
• The member was married to the AP as of the member’s effective retirement date.
• The AP is the current beneficiary.
  AND
• The court order has not restricted the member from “popping up.”

Note: The Single Life Option does not provide any death benefits. As a result, if the member changes to the Single Life Option, all benefits end upon the member’s death.  

The pop-up effective date is the first of the month after the effective divorce date. The Single Life Option benefit is payable the first of the month after the pop-up effective date.  

Barring beneficiary provisions contained within the court order, the AP will remain the beneficiary until PERS receives a request to change to the higher-paying Single Life Option.  

Court orders may allow or require PERS to convert a Reduction Award into a Separate Benefit Award in an alternate payee’s (AP) name at retirement. 

• If a Reduction Award allows the AP to convert to a Separate Benefit Award or to begin receiving benefits at the member’s earliest retirement eligibility, the AP will have the option of receiving a Reduction or a Separate Benefit Award.
  • If the AP has the option of receiving the award as a Reduction or a Separate Benefit and the AP does not make an election prior to PERS processing the member’s retirement, the AP will be paid a Reduction Award by default.
• If the court order requires the AP to convert to a Separate Benefit, then the AP is required to be paid as a Separate Benefit rather than having the choice of a Reduction or a Separate Benefit.
  • If a court order provides that the AP is to be paid under an option selected by the AP, provides them with option restrictions, or indicates the benefit will be based upon the AP’s lifetime, PERS will interpret the award as a required Separate Benefit, i.e., the AP will not be able to choose a Reduction.
  • If the AP is required to be paid as a Separate Benefit and the AP has not elected a retirement option by submitting a retirement application prior to PERS processing the member’s retirement, the AP’s Single Life Option benefit will be initiated by default.

The court order or forms must award benefits by: 

• A direct percentage to be applied to the member’s benefit calculation at the time of payment to establish the AP’s Separate Benefit.
• A percentage of a married time ratio resulting in a percentage to be applied to the member’s benefit calculation at the time of payment to establish the AP’s Separate Benefit.
  OR
• A specific dollar amount to be to be applied to the member’s benefit calculation at the time of payment to establish the AP’s Separate Benefit.

PERS cannot administer an award that combines a percentage and a dollar award.  

Under the Separate Benefit method, the AP may request a benefit on or after the member’s earliest retirement eligibility but no later than the member’s retirement date, as provided for in the court order or forms. 

A Separate Benefit will not be established in the name of the AP until the AP applies for retirement but no later than the member’s retirement date. 

Death before retirement

Member dies before the AP’s Separate Benefit effective benefit date

The court order may provide that: 

• The AP is beneficiary for a specific percentage of the death benefits.
• The AP is beneficiary for a percent of the awarded married time ratio of the death benefits.
  OR
• The member is not required to name the AP as a preretirement beneficiary. If the AP is not designated as a preretirement beneficiary and the member dies before the Separate Benefit award effective benefit date, the AP will receive no benefits of any kind.

AP dies before preretirement and before member

The court order may state that the AP award: 

• Reverts to the member — 100% of benefits will be payable to the member.
• Be paid to the AP’s surviving spouse, if they have one, as a Reduction from the member’s retirement benefit when the member retires. For Reductions that are payable to the AP’s surviving spouse from the member’s retirement benefits, the court order also should state whether the whether the AP benefit continues to be paid to the AP’s surviving spouse after the member’s death, if the member has selected a survivorship retirement option.

If the AP dies before retirement and they do not have a surviving spouse at the time of their death, all benefits revert to the member. 

Member dies before retirement and after the AP Separate Benefit effective benefit date

Separate Benefit awards do not contain member preretirement beneficiary restrictions once the AP’s Separate Benefit becomes effective. 

Death after retirement

Member dies after retirement and after AP Separate Benefit effective benefit date

Separate Benefit awards do not contain member retirement option or beneficiary restrictions once the AP’s Separate Benefit becomes effective. 

AP dies after AP Separate Benefit effective benefit date

OPSRP Separate Benefit APs retire under the Single Life Option, which does not provide any death benefits. When a retired Separate Benefit AP dies, the AP benefits end and do not revert to the member. 

Member withdrawals

Senate Bill (SB) 1049 (2019) eliminated pension withdrawal provisions for OPSRP members. OPSRP members can still withdraw their Individual Account Program (IAP) account. However, if an OPSRP member withdraws their IAP, their OPSRP membership is terminated, and they will not receive lifetime monthly benefit payments from PERS in retirement.  

If an AP has been awarded a Separate Benefit or choice of a Separate Benefit, the member will not be allowed to withdraw their IAP account unless the court order clearly states that: 

• The member is allowed to withdraw from OPSRP membership.
  AND
• This action will negate any OPSRP AP benefit awarded.

If the court order states that information and the member does withdraw, the AP will not receive any OPSRP benefits. 

Alternate payee (AP) withdrawals

An AP cannot withdraw. 

Court orders may allow for an alternate payee (AP) or a former registered domestic partner (RDP) to receive a benefit withheld directly from each disability benefit received by the member. 

The court order or forms must award benefits by:  

• A direct percentage to be withheld from the member’s actual benefit payments. (The percentage can be written using up to two decimal points.)
  OR
• A percentage of a married time ratio resulting in a percentage to be withheld from the member’s actual benefit payments.

If awarded, the AP or former RDP will receive their payment at the same time the member receives disability benefits, as provided for in the court order. The percentage awarded to the AP or former RDP will be applied to any retroactive disability payments accrued after the date the court order is processed by PERS. 

The AP’s or former RDP’s portion of the disability benefit will end when the member:  

• Is no longer disabled.
• Retires under early retirement provisions.
  OR
• Reaches normal retirement age.

The AP will not receive an award of the member’s disability payment if the AP is retired under a Separate Benefit election. 

The AP’s portion of a disability benefit will end and revert to the member if the AP retires under a Separate Benefit election while the member is receiving disability benefits. 

An OPSRP member’s disability benefit is not a retirement benefit. If an OPSRP member is approved and receives OPSRP disability benefits, those benefits end no later than when the member reaches normal retirement age. For this reason, if an AP or former RDP is to receive an award of any current or future disability and receive a retirement award, forms for each benefit are required to be included as part of the court order. 

Death of either party while receiving OPSRP disability benefits

Because OPSRP disability benefits are not retirement benefits, if either party dies while OPSRP disability benefits are being paid, the deceased’s death will be considered a preretirement death. Death and/or AP or former RDP benefits will be paid based on the court order directions for that individual’s preretirement death.  

If there is no award of the member’s account or benefits, the court order should state there is no award.  

Here are additional key things to know about situations in which there are no awards: 

• PERS prefers that court orders incorporate the appropriate No Award divorce form.
• No Award court orders can contain beneficiary and benefit option restrictions as provided for on the OPSRP Beneficiary Restrictions divorce form.
  
• Final court orders received with no mention of PERS will be interpreted as No Award and no restrictions.
• No Award, No Restriction court orders may allow members who retired under a survivorship increase option to change to the Single Life Option (aka “pop up”), resulting in removal of the member’s former spouse as beneficiary. (Read the “Changing to the higher-paying Single Life Option” and “Beneficiary restrictions” sections for additional details.)
• A retired member who named their former spouse as beneficiary of a survivorship option (Full Survivorship, Full Survivorship Increase, Half Survivorship, or Half Survivorship Increase) at retirement will not be allowed to change their beneficiary if the court order contains no award. The former spouse will remain the sole beneficiary.

Changing to the higher-paying Single Life Option

A retired member who named their former spouse as beneficiary of a Survivorship Increase option (Full Survivorship Increase or Half Survivorship Increase) at retirement will be allowed to request a benefit option change to the higher-paying Single Life Option (aka “pop up”), if: 

• The member is divorced (not legally separated) or a former registered domestic partner.
• The member was married to the former spouse as of the member’s effective retirement date.
• The former spouse is the current beneficiary.
  AND
• The court order has not restricted the member from popping up.

The Single Life Option does not provide any death benefits. As a result, if the member changes to the Single Life Option, all benefits end upon the member’s death. 

The pop-up effective date is the first of the month after the effective divorce date. The Single Life Option benefit is payable the first of the month after the pop-up effective date.  

Under No Award, the former spouse will remain the beneficiary until PERS receives a request to pop up. 

When an alternate payee (AP) or a former registered domestic partner (RDP) has been awarded an OPSRP benefit, any beneficiary restrictions must be included on the appropriate divorce award form. 

The Oregon Public Service Retirement Plan (OPSRP) Pension Beneficiary Restrictions form may only be used to provide beneficiary restrictions on No Award accounts. If restrictions are not provided on this form, then:  

• A nonretired member will be allowed to select any retirement option and beneficiary at retirement.

• A retired member who named their former spouse as beneficiary of a Survivorship Increase option (Full-survivorship Increase or Half-survivorship Increase) at retirement will be allowed to request a benefit option change to the higher-paying Single Life Option (aka “popping up”) if:  

  • The member is divorced (not legally separated) or a former registered domestic partner.
  • The member was married to the former spouse as of the member’s effective retirement date.
    AND
  • The former spouse is the current beneficiary.

When PERS distributes benefits awarded in a dissolution of registered domestic partnership, PERS is required to report the benefits paid to the former registered domestic partner (RDP) on the member’s 1099-R. The member is responsible for taxes on benefits paid to the former RDP. 

Therefore, a dissolution of registered domestic partnership cannot provide a Reduction or Separate Benefit award.  

Deduction awards paid to a former RDP or a former RDP’s beneficiary terminate upon the member’s death. 

A former RDP cannot continue to receive Deduction Award benefits after an OPSRP member’s death. They can, however, receive death benefits as a beneficiary — either as the member’s designated beneficiary or as required by court order. Benefits paid to a beneficiary are taxable to the recipient. 

Dissolution of a registered domestic partnership does not allow a member who elected a Survivorship Increase option (Full Survivorship Increase or Half Survivorship Increase) to change to a higher-paying option (aka “pop up”) due to dissolution of the partnership. If the member’s RDP or former RDP dies before them, the member can pop up due to death. 

Dissolution of a registered domestic partnership does not allow a survivorship option beneficiary change. 

Any award type that would be applicable if the court order were a dissolution of marriage is also available for a legal separation. If all the criteria are met, a legal separation order also can allow a survivorship option beneficiary change. (Read the Reduction and Deduction Award section.) 

It is important to note that legal separations do not terminate marital rights. Any document submitted by the member that requires spousal consent is required to be signed by the member’s spouse from whom the member is legally separated — unless the separation order specifically addresses and exempts the document and the elements within the document from the spousal consent requirement, incorporating PERS' Legal Separation Spousal Consent Waiver form as a labeled and referenced court order exhibit.  

An example would be if a member with a legal separation order submits an application for retirement. The member’s spouse would be required to sign in front of a notary that they consent to the benefit option and beneficiary selected by the member — unless the separation order specifically states that the member may submit a retirement application and that spousal consent is not required for the member’s option or beneficiary selection.  

Legal separation does not allow a member who elected a Survivorship Increase option (Full Survivorship Increase or Half Survivorship Increase) to change to a higher-paying option (aka “pop up”) due to legal separation. If the member’s spouse, from whom the member is legally separated, dies before the member, the member can pop up due to death. 

Member retirement options

A member may select any retirement benefit option* unless their court order or divorce forms restrict the member to a specific option.  

Read Your OPSRP Pension Program and Individual Account Program (IAP) Preretirement Guide for an explanation of the benefit options that are available and a description of how they work.  

Read the subsections below for retirement option information by award type.  

Reduction and Deduction awards

Regardless of whether the member is free to select any option* or is restricted to a particular option, the alternate payee (AP) or former registered domestic partner (RDP) will receive a portion of the member’s benefit — and possibly the member’s beneficiary’s benefit — for as long as it is paid, unless the court order provides alternate direction. If a member receives a lump-sum benefit, the AP or former RDP also will receive a lump-sum benefit. If the member receives a monthly benefit, the AP or former RDP also will receive a monthly benefit payment. 

Beneficiary designations  

The designation of primary beneficiary for survivorship options is made at the time the member applies for retirement. The court order may require the AP or former RDP to be named as the primary beneficiary, so the AP or former RDP will continue to receive their share for life. Any remaining share can go to the member’s secondary beneficiary, but this payment will stop upon the death of the AP or former RDP.  

When a member is free to name anyone as primary beneficiary and does not name the AP or former RDP, all payments to the AP or former RDP cease with the member or primary beneficiary’s death, as directed by court order.  

Separate Benefit awards

If an AP retires under a Separate Benefit award, the member is released from any retirement option* restrictions in the court order.  

*If you are legally separated, read the “Legal separations” section for additional information regarding member benefit options.  

AP and former RDP retirement options

OPSRP APs or former RDPs do not have retirement options. The award type and court order specifics will impact how an AP or former RDP is paid.  

Reduction or Deduction Award APs or former RDPs

APs or former RDPs of a Reduction or Deduction Award do not have any retirement option choices.  

The AP or former RDP will receive a portion of the member’s benefit (and possibly the member’s beneficiary’s benefit) for as long as it is paid — unless the court order provides alternate direction.  

If a member receives a lump-sum benefit, the AP or former RDP also will receive a lump-sum benefit.  

If the member receives a monthly benefit, the AP or former RDP also will receive a monthly benefit payment.  

The AP or former RDP benefits will begin automatically when the member’s benefits begin. The AP or former RDP does not submit an application to initiate benefits.  

Separate Benefit Award APs

APs of a Separate Benefit Award will be paid under the Single Life Option independent of the member’s option choice. The law does not allow survivorship annuity options for APs. The AP must submit the Alternate Payee OPSRP Pension Program Separate Benefit Application form to initiate benefits.  

An AP’s benefit based on a Separate Benefit Award will be determined by calculating the member’s benefit, after which the AP award is applied to determine the AP amount. The AP’s benefit is then re-annuitized based on the AP’s lifetime.  

APs are not allowed to cancel benefits later than the day before the issue date of their first payment. 

Single Life Option  

This option is a straight life benefit, meaning that monthly benefits are paid for the AP’s lifetime and no benefit of any kind is payable to anyone after the death of the AP. 

A court order containing an award of OPSRP benefits will not be administered until the Alternate Payee Information Verification form is completed by the AP or former RDP and received by PERS, accompanied by a copy of a document verifying the AP’s or former RDP’s correct Social Security number. The purpose of the form and Social Security documentation is to verify the AP’s or former RDP’s mailing address, date of birth, and Social Security number.  

To expedite court order processing, PERS encourages APs or former RDPs to be proactive in submitting this form to PERS.  

If the verification form is not on file, PERS will mail the form to the AP’s or former RDP’s presumed address. If the AP or former RDP address provided in the court order is no longer valid, the parties should contact PERS and provide the correct AP or former RDP address.  

If the AP or former RDP is a Tier One, Tier Two, or Oregon Public Service Retirement Plan (OPSRP) member in their own right, the Alternate Payee Information Verification form requirement is waived.  

Increases to AP or former RDP benefits for OPSRP

Increases to benefits, such as cost-of-living adjustments (COLA), currently in effect are not due the AP or former RDP until they are due and payable to the member. If an increase never becomes due and payable to the associated member, then the AP or former RDP will never receive an increase.  

Set monthly dollar awards are not subject to increases. 

Member cost/post-tax dollars

Any after-tax contribution is referred to as “member cost” and is reported as employee contributions on tax form 1099-R. Member cost is allocated between the member and AP based on the award proportionate to either the account balance or benefit awarded to each.