The Federal government is not bound by state government court decisions unless the state court follows very strict criteria for the COAP. Done incorrectly, a new spouse or a former spouse could take 100% of the FERS benefit, even though you have a court-order in place awarding you one-half the pension by “time rule.” That is why, it is so incredibly important to have an expert assist you with drafting DROs particularly for FERS and Military Retirement Pay.
The Federal Employees Retirement System (FERS) uses a Court Order Acceptable for Processing (COAP) instead of a Qualified Domestic Relations Order (QDRO) because FERS is a federal government retirement system, not a private-sector plan.
Here’s a clear breakdown of the distinction:
What is a QDRO?
- A Qualified Domestic Relations Order (QDRO) is used to divide private-sector retirement plans governed by the Employee Retirement Income Security Act of 1974 (ERISA).
- QDROs apply to private pension plans and 401(k)s.
- They are issued under state domestic relations law but must be qualified by the plan administrator according to ERISA standards.
Why Doesn’t FERS Use QDROs?
Because:
- FERS is a federal system, and federal retirement plans are not governed by ERISA.
- Therefore, QDROs do not apply to FERS or other federal retirement programs.
- The federal government created its own system to recognize and implement divorce-related benefit divisions: the COAP.
What is a COAP?
A Court Order Acceptable for Processing is:
- Specific to federal retirement plans, like FERS and CSRS (Civil Service Retirement System).
- Administered by the Office of Personnel Management (OPM).
- Required to divide FERS annuity payments, survivor benefits, or refunds of contributions.
How Is TSP Handled?
While the FERS annuity requires a COAP, the Thrift Savings Plan (TSP)—which is a separate retirement savings account—requires its own type of order called a:
- Retirement Benefits Court Order (RBCO)
Like a QDRO, the RBCO must meet specific federal criteria but still is not a QDRO, because TSP is also a federal plan and not covered by ERISA.
The Federal pension scheme is so strict that doing this wrong can cost you your entire interest in the pension. We all learned recently, during the DOGE cuts, that 2 million Federal civil servants are contributing to FERS and many more contributing to TSPs.
A Court Order Acceptable for Processing (COAP) is a specific type of legal document required by the U.S. Office of Personnel Management (OPM) to divide a Federal Employees Retirement System (FERS) account—such as retirement annuity or Thrift Savings Plan (TSP) benefits—due to divorce, legal separation, or annulment.
These documents make the division of the asset a tax-free transfer incident to a dissolution of marriage. That is not so say that you can withdraw cash tax-free – the money is still pre-tax. But you can roll the money into a similar type of pre-tax retirement account without any taxes or penalties with the issuance of a COAP (or QDRO in the context of an ERISA-governed plan).
Why is a COAP Required?
When a federal employee (including member of the US Military) goes through a divorce, their retirement benefits (including FERS annuity and TSP) may be considered marital property. To divide those benefits, a court must issue an order. However, not just any divorce decree or settlement agreement will be recognized by OPM—it must meet their specific requirements and thus be “acceptable for processing”.
Without a COAP:
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- OPM will not divide or pay any portion of a FERS annuity to a former spouse.
- The former spouse may lose the right to claim their share of the retirement benefits.
Read that last sentence again, OUT LOUD. It is so important to follow the procedures for a COAP because if you get it wrong, you may lose your right to claim your share of the retirement benefits. If your spouse dies after divorce and before the COAP, you will almost assuredly lose your interest in the benefits. If your spouse remarries and you do not have a COAP, you can lose your share of the benefits.
What Makes a COAP “Acceptable for Processing”?
A valid COAP must:
- Be a court-issued document (divorce decree or separate order relating to the divorce).
- Clearly identify the federal employee and the former spouse.
- Specify exactly what portion of the FERS benefit (annuity or survivor benefits) the former spouse is to receive.
- Be clear and unambiguous in its instructions to OPM.
- Comply with federal laws and OPM regulations, which often differ from state laws.
Types of Benefits a COAP Can Divide
- FERS Annuity – The monthly retirement payment.
- Survivor Benefits – A portion of the retirement benefits that continue to a former spouse if the retiree dies.
- Thrift Savings Plan (TSP) – Separate from the FERS annuity and requires a different kind of order (called a Retirement Benefits Court Order, or RBCO).
Summary
A Court Order Acceptable for Processing is:
- Required for OPM to legally divide FERS retirement benefits.
- Ensures the former spouse gets their court-awarded share.
- Must meet strict federal standards, not just state law requirements.
If you’re involved in a divorce where FERS or TSP benefits are at stake, it’s essential to have an attorney familiar with federal retirement law prepare or review the COAP.
