What would happen to your retirement benefits, your life insurance, and your Thrift Savings Plan account if you were to die today?
If you think you’re covered because you provided for that contingency in your will, you are mistaken. Your will controls none of these things. In most cases what will control is what’s called the standard order of precedence—which might not match your wishes—unless you have filled out the proper designation of beneficiary forms.
Each one of your accounts has its own form. For the retirement system, it’s Standard Form 2808 (CSRS) or 3102 (FERS). For the Federal Employees’ Group Life Insurance it’s Standard Form 2823. And for the Thrift Savings Plan it’s TSP-3. The Standard Forms can be downloaded from the OPM web site. Just go to www.opm.gov/forms. For the TSP form, go to www.tsp.gov/forms.
Having filled out and filed these forms once may not be enough. That’s because circumstances change. For example, you may get married, have a child, adopt a child, get divorced, lose a loved ones, etc. If any of those happens, you may have to resubmit those forms with new designations of beneficiaries. Note: There may be limits on your ability to control where your benefits go. For example, a court order may assign some or all of your benefits to a former spouse.
As mentioned earlier, if you don’t fill out any designation forms, your benefits will be distributed according to the standard order of precedence. In descending order, this is:
◦ to your widow or widower;
◦ if none of the above, to your child or children, with the share of any deceased child distributed among the descendents of that child;
◦ if none of the above, to your parents in equal shares or the entire amount to your surviving parent;
◦ if none of the above, to the executor or administrator of your estate; and
◦ if none of the above, to your next of kin under the laws of the estate where you were living when you died.
If that outcome is okay with you, fine. Don’t do anything.
Just be aware that regardless of whether you fill out those designations forms or not, you only have complete control over certain benefits: specifically, your life insurance and Thrift Saving Plan.
Barring a court order, the only person who can receive a survivor annuity is a current spouse. If you aren’t married when you die, your contributions to the retirement system would be distributed either according to your designation of beneficiary or under the standard order of precedence. The same would be also be true if you are retired, unmarried, and hadn’t received all your contributions to the retirement system in annuity payments.