Annuities for Survivors of Federal Retirees
A full survivor annuity benefit for your spouse amounts to 55 percent of your basic annuity. For this benefit, your basic annuity is reduced by about 10 percent. A partial survivor benefit can range anywhere from $1 a year and up. Or you can decide on no survivor benefit. You can make less than a full election with your spouse’s written permission. If a less than full survivor benefit is elected, the amount of the reduction in your annuity is proportionately less.
The formula used to compute the reduction is as follows:
- .025 x up to $3,600, which you elect for your spouse
- + .10 x anything over $3,600, which you elect
If you elect a standard survivor annuity under FERS when you retire (note: same-sex spouses who were married in a state or foreign country recognizing such a marriage, regardless of place of current residence, are eligible), it amounts to 50 percent of your basic annuity before reductions are taken. However, unlike CSRS/CSRS Offset, you are offered no sliding scale of choices. Your only other choices are 25 percent or none. You can elect a smaller than full survivor annuity only with your spouse’s written consent. If you elect a full survivor annuity, your own basic annuity is reduced by 10 percent. A 25 percent annuity is reduced by 5 percent.
Former Spouse Annuities
Just as with employees, a former spouse who is divorced from you on or after May 7, 1985 may receive all or part of any annuity payable to a surviving spouse if a court order requires it and that court order is on file with OPM. To be eligible, the former spouse must have been married to you for at least nine months and must not remarry before age 55.
If there was such a court order on file for a former spouse survivor annuity when you retire, it restricts the amount of the survivor annuity you are able to elect for any current spouse. The extent of that restriction depends on the dollar amount or percent of annuity that the order directs be paid to the former spouse.
If there is no court order on file that provides for a former spouse survivor annuity when you retire, you may voluntarily elect one for him or her. However, if you remarried subsequently, you can only do this with your current spouse’s written agreement.
Survivor Elections Made After Retirement
If you are married when you retire and you and your spouse elect not to provide a survivor annuity (or elected less than a full annuity), you may elect a reduction in your own annuity to provide (or increase) one for your spouse, but only within 18 months after retirement. If you decide to make such an election, you must pay a deposit that includes:
- the difference between the reduction in annuity for the new survivor election and the original survivor election; plus
- a charge of 24.5 percent of the amount of the increase from the original survivor base to the new survivor base (computed as of the time of retirement); plus
- any applicable interest
If you are unmarried at retirement, you may elect a reduced annuity to provide a current spouse with a survivor annuity within two years after the marriage. The reduction in your annuity will be effective no earlier than the first of the month beginning nine months after the date of marriage.
If you are married at retirement and the marriage ends and then you remarry, you may elect, within two years of the remarriage, a reduced annuity to provide a current spousal annuity for your new spouse. If you remarry the same person you were married to when you retired, and that person had previously consented to an election of less than the maximum survivor annuity, you may not later elect to provide a larger survivor annuity for that person upon remarriage.
Note: A qualifying court order awarding a survivor annuity to a former spouse may prevent the payment of a current spouse survivor annuity. If such an election causes the total of all current and former survivor spouse annuities to exceed the maximum (55 percent for CSRS/CSRS Offset and 50 percent FERS), OPM will accept the election but will pay only the portion not in excess of the maximum.
If you elect to provide a survivor annuity for a spouse you marry after retirement, you must agree to pay a deposit equal to the difference between the amount of annuity actually paid and the amount of annuity that would have been paid if the survivor election had been in effect continuously since you retired or since the date the reduction terminated, whichever is applicable. Interest is assessed against the amount owed at the rate of 6 percent, compounded annually. This deposit is paid by a permanent actuarial reduction that is based on “present value factors” as described in Actuarial Reduction, above. In most cases the reduction is several percent of the annuity.
If Your Spouse or Former Spouse Dies
If you elect a survivor annuity for your current spouse and he or she dies, you should notify OPM. The same is true if a court order is on file requiring you to provide a survivor annuity for a former spouse or if you elect one for him or her. Once OPM has confirmed that death, your own annuity will be restored to its full amount on the first day of the month after the current and/or former spouse dies.
Insurable Interest Annuity
You can elect an insurable interest annuity for one of the following people:
- a current spouse, when a regular survivor annuity has been blocked by a court order;
- someone else in addition to electing a survivor annuity for a current spouse; or
- someone else instead of a current spouse, but only if the spouse gives written consent.
In order for OPM to approve an insurable interest election, you have to establish that you were in good health, as evidenced by a recent medical examination, and that the person you name would have a continuing financial interest in you.
OPM assumes that a continuing financial interest exists for the following people:
- a current spouse;
- a former spouse;
- someone to whom the retiree was engaged to be married;
- someone living in a common-law marriage relationship, as long as that union was recognized by the state in which the retiree was living;
- a current or former same-sex domestic partner or someone with whom the retiree intends to form a same-sex domestic partnership that meets certain definitions (see Domestic Partners); or
- someone with a demonstrable financial interest who could be expected to derive a meaningful benefit from your continued life.
The person you select for an insurable interest annuity will receive 55 percent of your annuity after it has been reduced by a percentage that goes up as the difference between your age and that of your designated survivor increases (this differs from a regular survivor annuity, where the FERS maximum is 50 percent, and where the survivor benefit is a percentage of the unreduced annuity and with no age factor). See the Age Reduction Factors for an Insurable Interest Annuity Election table.
Age Reduction Factors for an Insurable Interest Annuity Election (Age difference | Annuity reduction):
Older, same age, or less than 5 years younger than you: 10%
5 but less than 10 years younger than you: 15%
10 but less than 15 years younger than you: 20%
15 but less than 20 years younger than you: 25%
20 but less than 25 years younger than you: 30%
25 but less than 30 years younger than you: 35%
30 or more years younger than you: 40%
You cannot elect to provide an insurable interest survivor annuity after you retire. However, if you choose one at retirement, you can change it to a regular survivor annuity after retirement under the following circumstances:
- If your annuity was reduced to provide a survivor annuity for a former spouse and you elected an insurable interest survivor annuity for your current spouse, you may change the latter into a full, regular survivor for your current spouse if the former spouse loses entitlement because of remarriage before age 55, death or under the terms of the court order.
- If you marry the person you named to receive the insurable interest benefit, you can elect to provide a regular survivor annuity for that person. If you do so, the insurable interest benefit will be canceled.
In either case, you must notify OPM of your intentions within two years after the triggering event.
Your annual basic annuity: $38,000
Your age: 57
Your beneficiary’s age: 36
Reduction factor: 30%
Reduction in annuity: $11,400 (.30 x $38,000)
New annuity base: $26,600
Survivor annuity: $14,630 (.55 x $26,600)
Survivor Annuities for Children of Deceased Retirees
Regardless of the retirement system under which covered, if there are any children who are under age 18 when the employee or retiree dies, they will be eligible for survivor annuities (including children of a same-sex marriage performed in a state or foreign country recognizing such a marriage, regardless of place of current residence). Under law, a child is defined as an unmarried dependent child, including:
- a recognized natural child;
- an adopted child;
- a stepchild (but only if the stepchild lived with the employee in a regular parent-child relationship; and
- a child who lived with the employee and for whom a petition for adoption was filed by him or her and who is adopted by the surviving spouse at death.
Note: The age 18 limit is waived for a dependent child who is incapable of self-support because of a mental or physical disability incurred before age 18, as long as he or she remains incapable of self-support and unmarried. It is also waived for an unmarried dependent child between 18 and 22 years of age who is a student regularly pursuing a full-time course of study in a recognized educational institution.
The children’s rate where one parent was still alive is about $590 per month for each eligible child or about $1,760 per month divided by the number of children if four or more. If there is no surviving parent, the rates are about $700 per month per child or about $2,100 divided by the number of children if four or more. The amounts vary slightly in certain situations and typically are raised slightly early in each calendar year.
If there are any changes in the family makeup, for example the death of the surviving parent or one child’s benefits being terminated because of age, the annuity rates will be adjusted to account for that.
In general, the annuity of a child under 18 years of age will be paid to the surviving spouse or, if there isn’t one, to the court appointed guardian.
Note: The children’s annuities of CSRS Offset and FERS employees will be reduced if they are eligible for Social Security benefits based on the CSRS Offset or FERS service. However, the end result in dollar terms will be the same. The only change is that the benefit payments will come from two different sources instead of one.