If your spouse is a federal employee or retiree as well, are you sure that you are that well prepared, should your spouse die first and you become the survivor? Image: Alan Crosthwaite/Shutterstock.com
By: FEDweek StaffA long-time acquaintance reached out recently asking for help with some questions about federal retirement. As it turned out, there were a lot of questions.
The federal retiree husband of a relative had just died and when his widow started looking into potential benefits due to her, she quickly found herself at sea. She reached out to him as someone who “knows a little about the government” — there seems to be one with that designation in every family — because his job involved more contacts with more government agencies than most people experience.
He too soon found himself at sea, he said—actually, it was more like in a rowboat in the middle of the ocean with no idea which direction to row. A lot of refining questions needed to be answered before he could be put on course, bringing a realization of how much someone in her position needs to know.
First, what survivor benefit decision had the husband made at retirement? He had retired long ago enough and with enough years of service that it appeared he might have been under the CSRS system. In that case, the standard survivor benefit would be 55 percent of the earned benefit before being reduced to pay for the survivor election.
But it could be as little as $1 a month or even zero. If under FERS, the standard annuity benefit would be 50 percent, but it also could be 25 percent or zero. Did she have documentation showing what election he made? If he chose less than the full benefit, it would have required her written consent. Did she have a record of any such consent? If he had designated a survivor annuity, she would be eligible to continue FEHB coverage so long as certain other conditions were met.
Did he keep his FEHB coverage in retirement, and was she covered under it, under either the self-plus-one or self-and-family options? If so, and presumably there are no other family members eligible, does she know she can switch to self-only and save money?
Did he have FEGLI life insurance coverage as an employee and did he keep it as a retiree? Did he pay to maintain the full amount or did he allow it to decline in value? If he didn’t designate a beneficiary, she would receive the payout by default, but if he did make a designation, it might be going to someone else.
Did he have a TSP account—many under CSRS never did, because for them it’s an opt-in program—and if so, the same questions regarding a beneficiary as with FEGLI apply. If there is such an account, does she know she doesn’t have to take an immediate withdrawal? Did he have enough Social Security-covered work to qualify for a benefit under that system and had he started drawing it? Would her own Social Security benefit exceed a survivor benefit under that system and therefore cancel it out?
The husband having been a retiree at the time actually simplified things. Had he still been an active employee, additional questions would have included: Which retirement system covered him, CSRS or FERS?
That would make a difference in terms of the survivor annuity he was due. Did he have military service, and had he paid a deposit into the federal retirement fund to capture credit for that time? If he hadn’t, did he fall under one of the exceptions that didn’t require it?
Did he have any prior federal employment for which no retirement deductions were taken, but could be creditable if a deposit was made? Similarly, had he had a break in federal employment where he had withdrawn his retirement contributions but could gain credit for that time by making a deposit?
In both cases, had he made those deposits? As a federal employee or retiree, are you sure that your spouse has readily at hand the documentation needed to all of those questions? If your spouse is a federal employee or retiree as well, are you sure that you are that well prepared, should your spouse die first and you become the survivor? If you’re not sure, isn’t it time to make sure? One place to start is getting hold of the employee or retiree’s official personnel folder.
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See also
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