Spousal Benefit Following A FERS Annuitant's Passing

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An individual is considered a FERS annuitant if they were a FERS employee who had left federal service, was protected by and made a significant contribution to the FERS Retirement and Disability Fund, and who had fulfilled all conditions for immediate retirement and the beginning of a FERS annuity. This includes submitting or having been “deemed to have submitted” a retirement application before passing away.

A FERS-covered employee who delayed the start date of his or her right to an immediate “MRA+10” or “MRA+20” FERS retirement (also known as a “postponed retirement”) is known as a FERS annuitant.

An ex-FERS-covered worker who was eligible for an urgent retirement under the “MRA+10” or “MRA+20” retirement alternative but who passed away before submitting an OPM Form RI 92-19 application to begin receiving the FERS annuity is also “deemed” to have applied and thus qualifies as a FERS annuitant.

An individual who was enrolled in the Federal Employees Health Benefits (FEHB) program as a family (“self plus one” or “self and family” enrollment) at the time of separation from federal service is still eligible for a FERS survivor annuity if their spouse is also qualified. 

Survivor Annuity under the FERS to a Surviving Partner

A surviving spouse receives a full FERS survivor annuity equivalent to half of the deceased FERS annuitant’s pension before the cost of the full survivor annuity benefit is deducted. 10% of the annuitant’s initial FERS gross annuity is required to provide a full FERS spousal survivor annuity. 

This example demonstrates this:

Example: William, a 56-year-old federal employee, retires with a FERS annuity after 35 years of service. He decides to pay his wife, Serena, the 50% FERS spousal survivor annuity. Here is a breakdown of Serena’s early survivor annuity benefit and William’s gross and net FERS annuities (after deducting the cost of providing a complete survivor annuity):

 $45,000 William’s initial gross annuity under FERS

Less than 10%: $4,500 giving a full FERS survivor annuity

Net pension to William of $42,500 (taxable)

If William passes away before receiving a cost-of-living adjustment (COLA) on his FERS pension, Serena will receive the following amount as her initial survivor annuity:

$45,000 divided by 50% equals $22,500 (taxable)

If the annuitant chooses to offer a “less than maximum” survivor annuity, the FERS spousal survivor annuity would equal 25% of the employee’s (annuitant’s) unreduced pension. Remember that the “less than maximum” election required the survivor spouse to have given their formal consent.

 A Cost-of-Living Adjustment’s Impact (COLA) on Survivors’ Benefit

FERS annuitants who retire do not begin to receive cost-of-living adjustments (COLAs) to monthly annuities before the January of the year they turn 62. COLAs raise the survivor annuity in a proportion equal to the annuitant’s entire FERS gross annuity. The first annuity paid to the surviving spouse upon the death of the FERS annuitant will include any prior COLAs applied to the annuitant’s full gross benefit.

 The examples below demonstrate:

Example 2: Similar facts to Example 1, except that William passed away at age 75, having received COLAs for 12 years. His FERS gross annuity, initially $45,000, has been raised to $55,000. William dies while Serena is still alive. Here is a breakdown of Serena’s survivor annuity benefit, Serena’s survivor annuity cost, and William’s gross annuity:

 $55,000 William’s gross annuity under FERS

Less: ($4,500) Giving a maximal spousal survivor annuity which costs money

Net dividend to William : $52,500 (taxable)

Serena will be given the following maximum FERS spousal survivor dividend after William passes away: $55,000 divided by 50% = $27,500 (taxable)

 Annuity for Spouse’s Special Retirement Supplement

The surviving spouse must meet the following criteria to qualify for the FERS spousal Special Retirement Supplement (SRS) annuity:

• Awarded a marital FERS survivor annuity

• Younger than age 60

• Eligible for Social Security survivor (widow/widower) benefits based on the deceased annuitant’s Social Security employment at age 60

• Not entitled to Social Security disability, mother, or father payments based on account of the dead annuitant

Note that (1) the surviving spouse’s failure to apply for the Social Security “parent” benefit will prevent payment of the spousal SRS annuity in cases where the surviving spouse is entitled to a Social Security mother or father (“parent”) advantage because he or she is trying to care for an eligible kid (a child younger than age 16); and (2) the surviving spouse’s earned Social Security benefit is not taken into account when determining eligibility for the spousal SRS annuity.

The spousal SRS annuity is only payable if the dead annuitant had at least five years of reputable civilian service and a minimum of one calendar year of reputable FERS service.

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M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].


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