In my last article in this series on kinds of retirement and associated benefits, I want to explain what the benefits are for the survivors of former federal employees.

As discussed in a previous article, some employees leave government before they are eligible to retire. If you had at least five years of creditable service and didn’t ask for a refund of your retirement contributions, you will be eligible for a deferred retirement. Your annuity will be based on your years of service and high-3 on the day you left government.

Spousal Survivor Benefits of Former Employees Who Receive a Deferred Annuity

As a former CSRS employee, you will be eligible for a deferred retirement at age 62. As a former FERS employee, you will be eligible at age 62 with 5 years of service, 60 with 20, at your minimum retirement age (MRA) with 30 or at your MRA with 10, but with a 5 percent reduction in your annuity for every year you are under age 62 (5/12 percent per month), unless you have 20 years of service and your annuity begins at age 60 or later.

If you are married, you are required by law to provide a full survivor benefit for your spouse, unless he or she agrees in writing to a lesser amount or no survivor annuity at all. If you are a CSRS retiree, a full survivor annuity is 55 percent of your base annuity. A lesser benefit can be any amount from $1 per year up. The reduction in your annuity to pay for a full spousal survivor benefit is approximately 10 percent. If a smaller base is elected, the reduction is proportionately less.

If you are a FERS retiree, a full survivor annuity is 50 percent of your base annuity. The only lesser amount you can elect under FERS is 25 percent. The reduction in your annuity to pay for a full survivor benefit is exactly 10 percent. If you agree to a 25 percent survivor annuity, the reduction would be 5 percent.

Note: If you are required by a court order to provide a survivor benefit to a former spouse, you may still elect a survivor annuity for your current spouse; however, he or she will only receive the difference (if any) between the amount in the court order and the full amount unless the former spouse loses the right to that survivor benefit.

If for any reason a survivor annuity is no longer payable, your annuity will be restored to the amount it would have been but for the survivor annuity election.

At your death, the spousal survivor annuity will be calculated using the base amount of your annuity when you retired, increased by all annual cost-of-living adjustments that have occurred since then.

Spousal Survivor Benefits of Former Employees Who Didn’t Apply for a Deferred Retirement

If you are a former CSRS-covered employee who dies before age 62 (or fails to apply for a deferred annuity on or after age 62), your spouse (or former spouse) would be eligible for a refund of your retirement contributions, but not an annuity. Also, no interest on those contributions would be payable.

If you are a former FERS-covered employee who dies before being eligible to apply for a deferred annuity (or fails to apply for one), your spouse (or former spouse) would be entitled to 50 percent of your base annuity on the day you left government. The survivor annuity would begin on the date you would have met the age and service requirements for an unreduced annuity. If your survivor wants the annuity to begin earlier than that, a lesser amount would be payable.

Children’s Survivor Benefits

Benefits are payable to the children of CSRS and FERS retirees who die, but only if those children are age 18 or younger and unmarried (age 22 if in school, and without age limit if unmarried and incapable of self support because of mental or physical illness occurring before age 18).

The amount payable depends on the number of surviving parents. If there is one surviving parent, the amount payable in 2009 is $469 per month per child or $1,409 divided by the number of children (if four or more). If there is no surviving parent, the amount payable is $563 per child per month or $1,619 divided by the number of children (if four or more).

Note: The benefits payable to the children of CSRS Offset or FERS retirees will be reduced by the amount of any Social Security benefit they are receiving.