Reg Jones Expert's View

In the last three articles on life events, we focused on the benefits impact of marriage, children, and divorce. Let’s wrap up by looking at what happens to your benefits upon your death.

Survivor Annuity
If you have at least 18 months of creditable service when you die, your spouse will be entitled to a survivor annuity. That annuity will be a percentage of the annuity you were either entitled to as an employee or were receiving as an annuitant. For a CSRS spouse, that’s 55 percent. For a FERS it’s 50 percent.

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However, if your spouse agreed to a lesser annuity amount (or none), that agreement will determine the amount of the annuity.

If you are a FERS employee at the time of your death, your spouse would also be entitled to a basic death benefit (currently about $34,500) plus half of the greater of your final salary or your high-3.

Health Insurance
If you were enrolled is the self plus one option upon your death, the person who shared your enrollment could continue that coverage. The same is true of any eligible survivors if you were enrolled in the self and family option.

Your survivors would be entitled to the same benefits and government share of the premiums as any current or retired employee enrolled in that same FEHB plan. The premiums for that coverage would be deducted from the survivor’s annuity unless the annuity was too small to cover the cost. If that was the case, your survivor could arrange to pay the premiums directly to the plan.

Life Insurance
If you elected to be covered under the Federal Employee’s Group Life Insurance program and filled out a Standard Form 2823, Designation of Beneficiary, any FEGLI benefits will be paid to those you named.

If you don’t have a designation on file, the proceeds of your insurance will be distributed according to the standard order of precedence:
• first, to a surviving spouse;
•second, if none, to your child or children, with the share of any deceased child distributed among the descendents of that child, if any;
•third, if none of the above, to your parents in equal shares or in its entirety to the lone survivor;
•fourth, if none of the above, to the executor or administrator of your estate; and
• fifth, if none of the above, to your next of kin as determined under the laws of the state where you lived.

Other Insurance
If your spouse or any eligible family member was enrolled in the Federal Long-Term Care insurance program when you die, that enrollment can continue as long as the family member(s) pay the premiums. Note: The opportunity to enroll in the FLTCIP program for the first time would only be available to a family member who is receiving a survivor annuity.

Any family member who was covered by your enrollment in the Federal Dental and Vision Insurance Program can continue that coverage. And anyone receiving a survivor annuity can enroll in the program if they want to.

Thrift Savings Plan
Any money you have in your TSP account will be paid out according to the name(s) you designated on a TSP-3, Beneficiary Election form. If you didn’t make such a designation, the payout will follow the standard order of precedence above.

If your survivor spouse is the beneficiary, he or she can keep the account open and enjoy the same account management and withdrawal rights that you did.

Beneficiaries other than a spouse must close out the account by withdrawing the money or by transferring it to an individual retirement account (IRA) or another qualifying retirement savings plan.