Life events are anything that essentially changes your status; marriage, divorce, the death of a spouse, even reemployment. This post will look at how each one of these can affect your retirement annuity and benefits. It will also only focus on those covered under FERS.
Marriage After Retirement
You may choose to elect a reduced annuity and provide a survivor annuity to your spouse and will have 2 years from the date of marriage to make this election. You can elect a full survivor benefit (50% of your unreduced annual basic benefit) or a partial survivor benefit (25% of your unreduced annual basic benefit). The deductions in your annuity, if you elect to provide the survivor benefit, will be the following:
- 10 % of your basic annuity for a full survivor benefit
- 5% of your basic annuity for a partial survivor benefit
If you happen to remarry the same person that you were married to at retirement, you cannot elect a survivor annuity larger than the one you elected at retirement.
To change health benefits, you can contact OPM anywhere from 31 days before your marriage to 60 days after. Otherwise, you must wait until the next health benefits open season to make a change.
Divorce After Retirement
If your annuity is currently reduced to provide a survivor benefit to your spouse, that reduction will be eliminated (unless the divorce decree states otherwise). A divorced spouse is no longer covered under FEHB since they are no longer a family member. Any children, however, can still have coverage.
You may also still elect a reduced annuity to provide your former spouse a survivor benefit.
If your current spouse dies and you are receiving a reduced annuity to provide for that survivor annuity, you may be able to receive an increased annuity after OPM has proof of the death. The same thing applies if a former spouse dies that had a survivor annuity.
Reemployment will cause your FERS annuity to stop if:
- You’re a disability annuitant whom OPM has found recovered or restored to earning capacity prior to reemployment.
- You’re a disability annuitant who was medically disqualified from continuing serving in the National Guard.
If your annuity stops upon reemployment, your health insurance stops as well, as an annuitant. If your position allows it, you can reenroll in the program when reemployed.
As with FEHB, if your annuity stops upon reemployment, your life insurance, as an annuitant, stops without a right to convert it to an individual policy. You can get life insurance coverage as an employee under the same conditions as any other rehired federal employee.
Again, if your annuity stops, your FEDVIP coverage as an annuitant stops. If you are eligible for FEHB coverage, you can enroll in the FEDVIP program when reemployed. If you are still receiving an annuity, you can have your premiums deducted from your paycheck. Reemployed annuitants want to make that change because retirees pay FEDVIP premiums with post-tax dollars and employees pay with pre-tax dollars. If your new position doesn’t have FEDVIP eligibility, you can keep that coverage as an annuitant.
When your annuity ends, you have the same status as any other federal employee employed in an equivalent position with similar service history.
If your annuity doesn’t stop under the rules above, you will continue to receive an annuity while working. Your pay is reduced by the amount of your annuity paid for the period you work.
If you are considering federal disability retirement and are unsure how these events may affect your benefits or annuity, please give us a call at 877-226-2723. The consultation is always free. You can also fill out this INQUIRY form.