Reg Jones Expert's View

Last week I wrote about the requirement that you elect a survivor annuity for your spouse when you retire, unless he or she agrees to receive a lesser amount or none at all. This time I want to fill you in on two things. First, what what may happen to your annuity if you and your spouse are legally separated or divorced, and even if your marriage is annulled. Second, whether and when a survivor annuity is payable.

Payment of a portion of your annuity

A court order can apportion or divide your CSRS or FERS annuity, but only if it expressly directs OPM to pay a portion of your benefits to your former spouse. As a rule, the portion must be spelled out as either a fixed amount, a percentage or a fraction of your annuity. It can also be expressed as a formula, as long as the meaning is clear on its face. Regardless of how the amount is stated, it cannot exceed the amount of annuity payable to you after deductions are taken out for taxes and insurance.

It may seem obvious, but a former spouse can’t receive a portion of your annuity until you retire. Even though that should be obvious, I’m amazed at the number of former spouses who think they can get some of their ex’s annuity while he or she is still working. And when that employee will retire can become a real issue. I’ve heard from former spouses whose ex has told them that they are never going to retire.

Payment of a survivor annuity

As a rule, apportionment payments from your annuity end when you die. In order for your former spouse to continue to receive payments, you have to elect a survivor benefit for him or her or the court order must provide for that benefit. In either case, your annuity will be reduced to pay for that benefit. If you are covered by CSRS and a full survivor benefit is provided, your annuity will be reduced by approximately 10 percent to pay for it; if you are covered by FERS, it will be reduced by exactly 10 percent for a full benefit. Lesser survivor benefits will result in smaller reductions in your own annuity.

If the court awards a full survivor annuity to your former spouse and you later remarry, you can still elect a full survivor annuity for your current spouse. Doing so preserves his or her right to a survivor annuity if your ex dies, remarries before age 55 or if the terms of the court order were time-limited.

If the court ordered benefit is less than a full survivor annuity, and you elect a survivor annuity for your new spouse, he or she will be entitled to the difference between what your former spouse is getting and the maximum, and your annuity will be reduced to pay for it.

FYI: If your former spouse waived the right to a survivor annuity, he or she can’t come back later and get one, even if backed by a court order. OPM won’t honor it. What’s done is done.