Reg Jones Expert's View

In this series on life events, I’ve moved from the happy topics of marriage and children through the less happy one of separation, annulment and divorce. Now I’m ending the series on a somber note. What happens to your benefits if you die?

Survivor annuity

If you are an employee who was married when you die and you had at least 18 months of creditable civilian service, your spouse will be entitled to a survivor annuity. That annuity will be based on a percentage of the annuity you were entitled to on the day you died. For CSRS survivors that’s 55 percent; for FERS 50 percent. If you are a retiree who was married before you died, the rules are the same, unless your spouse agreed to a lesser annuity amount (or none at all). If you married after you retired, whether any survivor benefit will be payable depends on the choice you made at that time.

Note: An eligible surviving spouse of a FERS employee is also entitled to a basic death benefit, plus 50 percent of the employee’s final salary (or high-3, if that’s greater). In 2017, that death benefit is $32,423.56.

Health insurance

If you were enrolled in either the self plus one or self and family options of the Federal Employees Health Benefits program when you died, the person(s) on your enrollment could continue that coverage. If you weren’t enrolled in the program (or were enrolled but in the self only option), any otherwise eligible survivors would be out of luck.

An FEHB eligible survivor is entitled to the same benefits and government share of the contributions as a current or retired employee enrolled in the same plan. As a rule, the premiums would be deducted from his or her annuity payment. If the annuity is too small to cover the premiums, your survivor could pay them directly to OPM.

Life insurance

If you enrolled in the Federal Employee’s Group Life Insurance program and have a Standard Form 2823, Designation of Beneficiary, on file, any FEGLI benefits will be distributed to the person or persons you named on the form. If you don’t, the proceeds 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 will continue as long as the premiums are paid. However, the opportunity to enroll in the FLTCIP program for the first time is limited to a family member who is receiving a survivor annuity.

Any member of your family who was covered by your enrollment in the Federal Dental and Vision Insurance Program can continue that coverage. Further, anyone receiving a survivor annuity can enroll.

Thrift Savings Plan

Unless you filed a valid TSP-3, Beneficiary Election form, when you die any money you have in your TSP account will be paid out in the standard order of precedence spelled out above.

If your survivor spouse is the beneficiary, he or she can keep the account open and have the same management and withdrawal rights that you did. However, any other beneficiaries will have to close out the account. They can do that either by taking a withdrawal or they can transfer the money to an individual retirement account (IRA) or any other qualifying retirement savings plan.