Reg Jones Expert's View

One thing we don’t like to think about is our own death. Because of that, we often postpone making arrangements for what we will leave behind, including survivor benefits related to federal employment.

If you are single and have no dependents, that’s possibly understandable. However, if you have a spouse and/or dependent children, what you provide for in the event of your death is critical. That’s why I want to focus your attention on what benefits your survivors would be entitled to, a topic broad enough that it will take several articles to cover.

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Survivor annuity if you die in service
If you are a CSRS employee, your spouse will receive 55 percent of the annuity you would have received if you were retired when you died. If you have any unmarried children under the age of 18, they will also be eligible for survivor benefits. That age limit is extended to age 22 for those who are still in school. There isn’t any age limit if they were incapable of self support because of a disability that occurred before age 18 and they are unmarried.

If you are covered by FERS, your spouse’s benefits would depend on how long you’ve been employed. If you’d been on the job for at least 18 months but less than 10 years, your spouse would receive a lump-sum payment (of about $34,500 in 2020), plus a lump-sum that is the higher of either one-half of your annual basic pay or one-half of your highest three consecutive years of average salary (your high-3). If you have 10 or more years of service, your spouse would receive all of the above plus a survivor annuity equal to 50 percent of what you would have received if you had retired on the day you died. Any children who meet the criteria spelled out under CSRS would also be eligible for survivor benefits.

Under both systems, you could elect to provide no survivor annuity, with your spouse’s consent, but upon your death your spouse would be ineligible to remain in the Federal Employees Health Benefits program, unless separately eligible due to his or her own federal employment.

The survivor annuities for both spouses and children are increased annually by cost-of-living adjustments (COLAs).

Death benefits after retirement
By law you are required to 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. That’s assuming that there isn’t any court order assigning that survivor benefit to a former spouse.

Under CSRS rules you may elect a survivor annuity ranging from $1 per year up to 55 percent of your basic annuity. To pay for that latter benefit, your base annuity would be reduced by approximately 10 percent.

Under FERS rules, you have only two choices: 50 percent or 25 percent of your base annuity. The reduction in your basic annuity for a FERS full survivor annuity is exactly 10 percent. For a partial FERS annuity, it’s reduced by 5 percent.

The survivor annuity will be increased by annual cost-of-living adjustments and will continue to be paid for the life of your survivor unless he or she remarries before age 55. That annuity will be increased by any COLAs you received since you retired. From that point forward, the survivor annuity will be increased by any future COLAs, as would those for your eligible children.

Read more at ask.FEDweek.com on:

CSRS and CSRS Offset Survivor Benefits

FERS Survivor Benefits

Health benefits
If your spouse receives an annuity in any amount and was covered under either the self plus one or self and family option of your FEHB plan, he or she and all eligible children may continue coverage. If the annuity amount is less than the premiums required, your spouse will be able to directly make payments to cover the rest of the cost.

Read more on FEHB – Federal Employee Health Benefits at ask.FEDweek.com

Life insurance and the Thrift Savings Plan
In addition to any survivor annuities your spouse may receive, he or she will be entitled to the proceeds of your Federal Employee’s Group Life Insurance and Thrift Savings Plan account, unless there is a court order that assigns part or all of these benefits to someone else.

More on TSP Spouse and Survivor Rights at ask.FEDweek.com

FERS Retirement Planning Guide 2020