Per 10 U.S. Code §1408(a)(4), a state divorce court is authorized to divide a servicemember's disposable retired pay.  This is the total pay (aka "gross pay"), minus the following:

1. Amounts owed to the government for previous overpayments (not common),
2. Forfeitures adjudged by a court-martial (even rarer),
3. Pay waived to receive VA disability (common), and
4. SBP premiums for the benefit of the former spouse seeking a share of the retirement (common).

Bonuses or Benefits in Lieu of Military Retirement

The most common benefit in lieu of retirement is when a servicemember receives VA disability, and must waive some of the military retirement to receive those payments.  See VA Disability & Divorce for more information.

The military has a variety of methods to separate servicemembers from active duty before retirement which may result in separation pay or other benefits in lieu of retirement. Should this occur, the Colorado divorce court may award the former spouse a portion of the benefit or bonus received in lieu of retirement.  As an example, if a servicemember separates with VSI or SSB benefits instead of a retirement, those benefits are divisible by the Colorado divorce court.  In re: the Marriage of Heupel, 936 P.2d 561 (Colo. 1997).

Sometimes, a retiree working for the federal government may merge the military pension into a federal civil service pension.  In that event, the Court will need to retain jurisdiction to protect the spouse's right to receive the retirement.

The FY2000 National Defense Authorization Act introduced the Career Status Bonus. Formerly, servicemembers who entered active duty after 8/1/1986 were forced into the relatively unfavorable REDUX system. Now, those same servicemembers will fall under High-3, but can elect to receive a $30,000 lump sum Career Status Bonus at 15 years, and thereby opt for the REDUX retirement system. This election obviously has consequences for the civilian former spouse, as it reduces the value of his/her portion of the military retirement.  These payments may be divided by the Colorado divorce court.