Survivor Benefits When a Retiree Dies

To close this series on the various types of retirement and the benefits that may flow from them, I want to focus on those available to the survivors. This column focuses on survivors of retirees. In my next column I’ll deal with the benefits due to the survivors of former employees.

Spousal Annuities

If you are married when you retire, you are required by law to provide a full survivor annuity for your spouse, unless he or she agrees in writing to a lesser amount or no benefit at all. For CSRS retirees a full survivor annuity is 55 percent of your base annuity. A lesser benefit can be any amount from $1 per year up. For FERS retirees a full survivor annuity is 50 percent of your base annuity. The only lesser amount you can provide under FERS is 25 percent.

Note: If you are required by a court order to provide a survivor annuity to a former spouse, you may still elect a survivor annuity for your current spouse; however, he or she will only receive the difference (if any) between the amount in the court order and the full amount unless the former spouse loses the right to that survivor benefit.

The reduction in your base annuity to pay for a full spousal survivor benefit is approximately 10 percent for CSRS retirees and exactly 10 percent for FERS retirees. If a smaller base is elected under CSRS, the reduction is proportionately less; if the 25 percent benefit is elected under FERS, the reduction is 5 percent. All reductions are permanent unless a survivor annuity is no longer payable. In that case, your annuity will be restored to the amount it would have been but for the survivor annuity election.

At your death, survivor annuities are calculated using the base amount of your annuity when you retired, increased by all annual cost-of-living adjustments that have occurred since then.

Children’s Benefits

Benefits are payable to the dependent children of CSRS and FERS retirees who die, but only if those children meet the following criteria: they are age 18 or younger and unmarried or age 22 and unmarried if in school full time. There is no age limit if an unmarried child is incapable of self support because of a mental or physical illness occurring before age 18.

The benefit payment amount depends on the number of surviving parents. If there is one surviving parent, the amount payable in 2009 is $469 per month per child or $1,409 divided by the number of children (if four or more). If there is no surviving parent, the amount payable is $563 per child per month or $1,619 divided by the number of children (if four or more).

Note: The benefits payable to the children of CSRS Offset or FERS retirees will be reduced by the amount of any Social Security benefit they are receiving.

Health and Life Insurance

If you were eligible to carry your FEHB coverage into retirement and were enrolled in the self and family option on the day you died, your spouse will be able to continue that coverage. So will your dependent children if they meet the criteria spelled out under Children’s Benefits, above.

Your spouse will also be entitled to the proceeds of your life insurance, unless you have assigned them to another person or entity or there is a court order requiring that they be paid to a former spouse.