Any federal employee covered under the Federal Employee Retirement System (FERS) can leave a survivor annuity. This survivor annuity determines how much your spouse can get from your pension if you pass away in retirement before your spouse. If you’re married when you complete your Federal Disability Retirement application, you’ll need to elect a survivor benefit option before submitting your application to the Office of Personnel Management (OPM).
This topic can be daunting and there’s a lot of information. Check out this outline to jump down to the section you need, or read through to get a broad overview of the topic.
Jump to a section:
- When Should I Elect Survivor Benefits?
- How is Survivor Annuity Calculated?
- What Your Spouse Can Receive: One-Time Payment
- What Your Spouse Can Receive: Monthly Payments
- What Happens to Health Benefits for My Spouse?
- What If My Spouse Passes Away First?
- Survivor Annuity vs. Life Insurance
- Other Factors to Consider
When Should I Elect Survivor Benefits?
If you’re still on the rolls with your federal agency, your survivor benefits will automatically go to your beneficiaries.
But, if you retire – including on Disability Retirement – you have to make those elections. You’ll do this in the process of applying for the benefit.
Whether you’re still working or retired, though, children’s survivor benefits are automatic.
How is Survivor Annuity Calculated?
When you apply for Federal Disability Retirement, you must elect one of four survivor annuity options. Each option is explained below with what it means for your monthly pension and what your spouse would receive.
Option 1: Maximum Survivor Annuity
Your spouse receives 50% of your unreduced pension if you pass away first in retirement. Your monthly pension is reduced by 10%.
How it’s calculated:
If your High-3 Average is $76,000, your unreduced annual benefit for year 1 would be $45,600, and $30,400 for year 2 and each year after.
The survivor annuity would then be calculated as: $30,400 x 50% = $15,200/year
Cost of Living Adjustments (COLAs): FERS annuitants over the age of 62 receive a COLA, which means the survivor benefit increases along with that COLA. As your FERS annuity increases, so does the survivor benefit.
Option 2: Partial Survivor Annuity
Your spouse receives 25% of your unreduced FERS pension if you pass away first in retirement. Your monthly pension is reduced by 5%. To elect this option, you must have written notarized consent from your current spouse.
How it’s calculated:
If your unreduced annual benefit is $30,400, the survivor annuity would be calculated as: $30,400 x 25% = $7,600/year
Option 3: No Survivor Benefit
If you choose this option, no survivor annuity will be paid to your spouse after your death. To elect this option, you must have your spouse’s notarized written consent. The only thing your spouse would receive is a refund of any unused FERS deposits (the total of the 0.8% you paid in minus the total of FERS benefits received).
Important: Waiving the survivor benefit also affects your spouse’s FEHB eligibility — see the health benefits section below for details.
Effect on your annuity: Your federal disability annuity will not be affected and will remain the same unless changes are made based on a divorce or new marriage.
Option 4: Survivor Annuity for a Former Spouse
This option is for those who have been divorced and are court ordered to leave a survivor annuity to a former spouse. To be eligible, you must submit copies of divorce decrees for all former spouses for whom you elect to provide a survivor annuity. Your election stops upon the death of that former spouse or if they remarry before age 55.
Effect on your annuity: The amount is based on what the divorce decree says. If a court order causes the total of all survivor annuities to exceed the maximum 50%, OPM will accept the election but will pay only the portion that does not exceed the maximum.
*Your spouse is automatically entitled to the Maximum Survivor Benefit UNLESS he/she consents to a Partial Survivor benefit or waives it entirely. If that’s the case, your spouse must complete Form 3107-2, Spouse’s Consent to Survivor Election.
What Your Spouse Can Receive: A One-Time Payment
This is a lump-sum benefit paid when a FERS employee dies while still employed.
Surviving Spouse
If an employee dies with at least 18 months of creditable civilian service under FERS, a survivor annuity may be payable if the surviving spouse was married to the deceased for at least nine months (or the death was accidental, or there was a child born of the marriage).
The spouse may be eligible for the Basic Employee Death Benefit, which is equal to 50% of the employee’s final salary (average salary, if higher), plus $15,000 (increased by Civil Service Retirement System cost-of-living adjustments beginning 12/1/87). The $15,000 has increased to $43,800.53 for deaths after December 1, 2025.
Former Spouse
The Basic Employee Death Benefit may be payable to a former spouse if there is a qualifying court order on file at OPM, the marriage was at least 9 months in length, and the surviving spouse did not remarry before age 55.
What Your Spouse Can Receive: Monthly Payments
These are recurring monthly survivor payments, separate from the one-time benefit above.
Surviving Spouse
If a FERS employee dies, recurring monthly payments may be made to the surviving spouse if the deceased employee completed at least 10 years of creditable service, 18 months of which must be civilian, and the surviving spouse was married to the employee for at least 9 months.
Former Spouse
Monthly payments can only be made if there is a court order saying so and the marriage met the 9-month requirement.
Children
Any unmarried children that are dependent upon benefits may receive them until they reach age 18, marry, or die. Benefits can continue after the age of 18 as long as the child is a full-time student at a recognized school, stopping at age 22. A child is considered dependent if there is proof the deceased made regular and substantial contributions to the child’s support.
When Benefits Begin
Widow/Widower — the day after the employee/retiree’s death.
Former Spouse — based on the court order; accrues from the later of the day after death or the first day of the second month after OPM receives the certified court order.
Children — the day after the employee/retiree’s death.
What Happens To Health Benefits For My Spouse?
Continuation in FEHB coverage is only available to a spouse who is eligible to receive a survivor pension. If you pass away first in retirement and your spouse wants to continue FEHB coverage, your spouse MUST:
- Be entitled to receive a FERS survivor benefit (max or partial), AND
- Have been enrolled in FEHB prior to your death
If your spouse elects to waive the survivor benefit, their FEHB terminates after your death.
Exception: If your spouse is an active FERS/CSRS employee or retiree and elected no survivor benefit, upon your death, they can elect their own FEHB coverage.
If you pass away first in retirement and your spouse wants to apply for the Federal Long Term Care Insurance Program (FLTCIP), they can only do so if they are entitled to a FERS survivor pension. If your spouse has waived the survivor benefit, they cannot apply for FLTCIP after your death. However, if your spouse already has a FLTCIP policy, their coverage continues for as long as they pay their premiums, regardless of the FERS survivor pension option you selected.
What Happens If My Spouse Passes Away First?
If you elect a survivor annuity for your current or former spouse and he or she dies, you should immediately notify OPM. Once OPM has confirmed the death, your own annuity will be restored to its full amount on the first day of the month after the current and/or former spouse dies. However, you will not receive any money that was already taken out throughout your retirement and put towards the survivor annuity prior to their death.
Survivor Annuity vs. Life Insurance
Some federal workers decide to opt out of survivor benefits and instead pay into a life insurance policy with a private company. There are a few questions you should consider when weighing these options.
Does your spouse depend on your health insurance? If so, you must elect a survivor annuity.
Another point to consider is taxes. Survivor annuities aren’t taxed but premiums for life insurance are made in after-tax dollars. The opposite is true of the benefits of each. Survivor benefits are taxable income and life insurance proceeds are income tax-free.
Other Factors To Consider
Age Difference Between You and Your Spouse
Age is a big influencing factor when deciding on survivor annuity because you want to try and plan your finances. Are you and your spouse relatively close in age? If not, who is younger?
Health and Family Health History
Do you currently have any serious medical conditions, or have you had a long history of health problems? What is the average lifespan of your family members, and are there any genetic medical conditions that could arise in the future? Analyzing your current health, health history, and family health history can help you in your decision making.
Sources of Income
Are you the sole income earner in your household, or do you and your spouse share the income earnings? Survivor annuity is especially important for survivors that are fully dependent on the federal worker’s income. However, if the income earning is shared, then electing a survivor annuity might not be as beneficial.
Life Insurance Proceeds
Do you have a life insurance policy? If so, then who will receive the proceeds? Is the total amount more than they would receive in survivor annuity? Federal Disability Retirement recipients are not allowed to elect a survivor annuity for a dependent other than their spouse. There is also a max of 50% for a survivor annuity payment. Which is why it is important to look at any life insurance policies that you may have in comparison to your estimated survivor annuity.
A Permanent Decision
It is also important to discuss all options and influencing factors with your spouse as you aren’t able to make changes to survivor annuity once it has been submitted other than in the case of a qualifying life event. It’s a tough decision to balance between living with a reduced retirement income and providing for your spouse in the future.
We’re Here To Help
We know that the Federal Disability Retirement application process can be overwhelming, and deciding a survivor annuity adds to the pressure. If you’re working through this, you don’t have to go through it alone. We’ve got 20+ years of experience, and we can help guide you on the right path for you. Schedule a free consultation today to get the support you need.
