Retirement & Financial Planning Report

Under certain circumstances, the children of deceased federal employees and retirees are entitled a survivor annuity—which for retirees is payable even if you didn’t elect a survivor annuity for your spouse when you retired.

To be eligible, your child must be an unmarried dependent under 18 years of age. The term dependent includes 1) an adopted child, 2) a stepchild (but only if the stepchild lived with you in a regular parent-child relationship), 3) a recognized natural child, and 4) a child who lived with and for whom a petition for adoption was filed by you and who is adopted by your surviving spouse after your death.

The age 18 limit is waived for an unmarried dependent child between age 18 and 22 years of age who is a student regularly pursuing a full-time course of study or training. It is also waived for a dependent child who is incapable of self-support because of a mental or physical disability incurred before age 18, as long as he or she remains both incapable of self-support and unmarried.

Note: In order to qualify your child for such a benefit, you have to provide OPM with information about the child’s education, employment (if any), and residence. In addition, your child’s doctor must provide information about the child’s medical condition. You’ll find an outline of the information needed in OPM Form RI 25-43, which is available in agency personnel offices or on-line at www.opm.gov/forms. Also, for the children of FERS or CSRS Offset employees or retirees, the benefit is reduced by the amount paid to the child(ren) by the Social Security Administration.

The rules governing the annuity payments to children are the same for CSRS and FERS employees and retirees. However, the annuity payments to a child of a CSRS-Offset or FERS employee/retiree will be reduced by the amount of the Social Security benefit payable based the employee/retiree’s Social Security-covered federal service.

More on FERS survivor benefits at ask.FEDweek.com

The annuity payable is based on a formula that is increased whenever there is a retiree cost-of-living-adjustment (COLA). Rates vary somewhat, but when a child has a living parent who was a current or former spouse of the deceased employee/retiree, the annuity benefit payable is the lesser of about $540 per month per child or about $1,620 per month divided by the number of eligible children.

If the child has no living parent who was married to the deceased employee/retiree, the benefit payable is the lesser of about $650 per month per child or about $1,950 per month divided by the number of eligible children.

If there are one, two, or three children that are eligible for an annuity, the rate will always be the same – the smaller of the two pertinent numbers. If there are four or more children, the rate per child goes down proportionately.

If a parent who was married to the employee/retiree dies before a child’s benefit ends, the annuity is increased. Benefits may also be adjusted for other reasons. For example, if they are being paid to more than three children and the annuity for one of them in terminated for any reason—such as aging out of eligibility–the annuities of the remaining eligible children are increased prospectively.

The survivor annuity to each qualified child begins the day after the employee/retiree’s death and ends on the last day of the month before the one in which the child dies, marries, reaches age 18, or if over 18 and disabled, becomes capable of self-support.

More on survivor benefits under CSRS and CSRS Offset at ask.FEDweek.com