If you are married and die while still employed by the federal government, your surviving spouse is entitled to certain benefits.
Under CSRS, your survivor spouse will receive an annuity that is 55 percent of the higher of 1) an annuity based on your high-3 average salary and years of service, including any unused sick leave or 2) a guaranteed minimum, which is the lesser of 40 percent of your high-3 or your regular annuity computed as if you had reach age 60. The computation based on your high-3 and years of service is based on the standard CSRS formula: (0.015 x the high-3 x the first 5 years of service, plus 0.0175 x high-3 x the next five years, plus 0.02 x high-3 x all remaining years). The guaranteed minimum is based on the formula used to compute the annuities of those retiring on a disability. Note: The disability benefit will usually equal the earned benefit if you had approximately 22 years of service or were age 60 or older when you died. If that’s the case, the survivor annuity will be computed using the standard formula.
Under FERS, if you had at least 18 months of service of civilian service, your surviving spouse would receive a lump sum payment of $27,461.91 (up from $26,584.62 in 2006) plus a lump sum equal to the greater of 50 percent of your annual base pay or 50 percent of your high-3, plus any Social Security benefit.
If you had 10 or more years of service, your surviving spouse would also receive a survivor annuity equal to 50 percent of what your basic annuity would have been, calculated using the standard FERS formula (.01 x high-3 x years of service), but without any age-based reduction if you were under age 62 when you died..
If there was no surviving spouse entitled to a CSRS or FERS benefit (or former spouse as spelled out in a properly executed court order filed with OPM), your retirement contributions would be paid out to the person or persons you designated as your beneficiary on a SF 2808 (CSRS) or SF 3102 (FERS). It’s important that you do this because the federal government doesn’t recognize beneficiaries named in your will, only those named on one of those forms.
If you don’t have a surviving spouse or a designated beneficiary, the money would be paid out according to the standard order of precedence. It begins with your child or children in equal shares, with the share of any deceased child being distributed among the descendents of that child. If you had no children, the money would go to your parents in equal shares or the entire amount to the surviving parent. Failing that, it would go to your duly appointed executor or administrator of your estate. If you had none of the above, it would go to your next of kin under the laws of the state in which you were living when you died. Finally, if there was no one to whom the money could go, it would escheat to the retirement fund, which is a fancy word for saying that Uncle Sugar would keep it.
