If a former spouse receives an annuity, he or she is eligible to enroll in FEHB. Image: ingae/Shutterstock.com
By: Reg JonesI often get questions from employees who are facing divorce. They want to know what the rules are and how they will affect their retirement, health insurance and life insurance. Here’s a short course on court-ordered benefits.
Dividing an Annuity
In the case of a divorce, legal separation or annulment of marriage, a court order can divide a FERS or CSRS retirement annuity. In other words, it can assign a portion of that annuity to the former spouse. To be effective, that order must be filed with the Office of Personnel Management (OPM) and must direct OPM to pay a portion of the monthly retirement annuity to the former spouse. The portion may be stated as a fixed amount, a percentage or fraction, or as a formula whose value is clear.
Providing a Survivor Annuity
Payments to a former spouse end with the retiree’s death. Therefore, if a former spouse wants to be sure to that those benefits continue in the form of a survivor annuity, that requirement must be included in the original court order.
Even if a court order doesn’t provide for a survivor benefit, a retiring employee has the option of voluntarily electing one. However, if the employee has remarried, such an election may only be made if the current spouse agrees to it in writing.
Note: Whether a former spouse’s survivor annuity is the result of a court order or a voluntary election, it always ends if the former spouse remarries before becoming age 55. However, if that marriage is terminated through divorce or the death of the new spouse, the survivor annuity can be reinstated.
Eligibility for Survivor Benefits
A court-ordered survivor benefit is payable to a former spouse if the current employee dies after having completed at least 18 months of creditable civilian service. However, the benefit available is different under FERS and CSRS. Under FERS, there is a lump sum death benefit and, if the employee had 10 years of creditable service, a survivor annuity. Under CSRS, only a survivor annuity is payable.
Note: If a CSRS employee leaves the government and dies before becoming eligible for a deferred retirement, it makes no difference what the court order says. No survivor annuity is payable. There’s a little more wiggle room under FERS.
Health Benefits and Life Insurance
If a former spouse receives an annuity, he or she is eligible to enroll in the Federal Employees Health Benefits (FEHB) program. In certain circumstances, a former spouse may be eligible to enroll even though the benefit is not yet payable.
As for life insurance benefits, a 1998 law made it possible for a court order to override an employee’s designation of beneficiary and stipulate that his or her Federal Employees’ Group Life Insurance (FEGLI) benefits be paid to a former spouse or children.
Where to Get More Information
If you are involved in a divorce case where federal benefits are involved, download a copy of Court-ordered Benefits for Former Spouses Under CSRS, FERS, FEHB, and FEGLI from www.opm.gov/asd/pdf/ri84-001.pdf.
Your attorney will need more than that to be sure that he or she knows exactly what can and can’t be done. OPM publication RI 38-116, A Handbook for Attorneys on Court-ordered Retirement, Health Benefits and Life Insurance, is at www.opm.gov/retirement-center/publications-forms/pamphlets/ri38-116.pdf.
For a more in depth look:
What Happens to Your Federal Employee Benefits in Divorce?
Former head of retirement and insurance policy at the Office of Personnel Management, and longtime FEDweek contributor, Reg Jones is known throughout the federal workforce community as an authority on pay and benefits.
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