Retirement Policy

OPM has proposed rules that essentially would reverse a policy change it made in 2010 involving retiree FEGLI life insurance elections.

The sequence of events began with a 1998 law overturning a former policy that FEGLI coverage had to automatically reduce under Options B (roughly up to five times final salary) and C (family coverage) once a retiree turned age 65. Instead, the law since then allows retirees to either allow that reduction—2 percent per month until the coverage ends, with premiums stopping at 65—or keep some or all of the coverage in place, with continued premiums.


Those elections are made at retirement, but under the initial policy, OPM sent retirees a notice just before their 65th birthday reminding them of the election they had made and giving them a chance to change their minds. However, OPM changed that policy in 2010, requiring (apart from a few limited exceptions) that the election made at retirement be binding and ending the opportunity to make a change on turning 65.

In recently proposed rules, OPM said it planned to go back to the prior policy, in light of the — presumably negative – comments it has received regarding the policy it has used since 2010.