I’m amazed at the number of questions I get from employees that begin with the assumption that they can make whatever decision they want about a survivor annuity for their spouse. The short answer is, they can’t. By law you must provide a full survivor annuity for your spouse unless he or she agrees in a notarized writing to a lesser amount or none at all.
The requirement that a retiree provide a survivor annuity wasn’t always the case. For years, the decision was left up to the retiring federal employee. And quite a few of them, either through ignorance or short-term financial motivations, failed to make that election. The end result was that many grieving widows and widowers found themselves left out in the cold. Fortunately, the Spouse Equity Act of 1984 put an end to that.
If you are a CSRS employee, the survivor annuity election options are broad indeed. With spousal approval, they range from none at all to a low of $1 a year up to a high of 55 percent of your annuity after it has been reduced to provide that benefit. The options for FERS retirees are much narrower: none at all, 25 percent of your annuity or 50 percent of your reduced annuity.
The reduction in your own annuity to provide for the survivor annuity also differs. Under CSRS, the formula looks like this:
2.5 percent of the first $3,600 you elect, plus
10 percent of any amount over $3,600
Under FERS, it’s a flat 10 percent reduction for the 50 percent benefit, 5 percent for the 25 percent benefit.
FYI. If you fail to make a survivor annuity election when you retire and neither you agency personnel office nor OPM catches the error, the retirement law automatically grants your widow or widower a full survivor benefit. In effect the law trumps your failure to make an election. The same is true if you were to die while still employed.
However, whether or not you make an election, your decision can be superseded by a court-ordered former spouse survivor benefit, but only if you retired and the marriage dissolved on or after May 7, 1985.
