What Happens To A Federal Employee’s Benefits When They Die?, by Flavio J. “Joe” Carreno
Life events like marriage divorces or having kids can affect your federal employee benefits. But what happens to your benefits when you die? Here’s what you should know.
Survivor Annuity
If you were married and died having at least 18 months of creditable federal service, your spouse will be eligible for a survivor annuity. The annuity they get will be determined by a percentage of the annuity you were entitled to before death. For FERS, that’s 50% and 55% for CSRC.
However, your spouse may get only a portion or nothing if you agreed to lesser or no annuity. The same applies when there’s a valid court order demanding that the whole annuity or part of it be paid to a former spouse.
A surviving spouse of a FERS employee may also be eligible for a death benefit, which is about $33,000 and 50% of the employee’s final salary or high-3 (anyone that’s greater).
Health insurance
If an employee is enrolled in the Federal Employees Health Benefits program and elected self and family coverage, or self plus-one coverage, the individual or persons sharing the enrollment would be entitled to the benefits and share of costs as any other employee. The program’s premiums would be deducted from the individual’s annuity payment unless it’s too small to cover them. In that case, you can reach an arrangement with OPM for the survivor to pay for them directly.
If you weren’t enrolled in FEHB or if you enrolled in the self-only option, the coverage will end with your death for you and any eligible survivors.
Suppose you were enrolled in the Federal Employee’s Group Life Insurance program and filled the Standard Form 2823, Designation of a beneficiary. In that case, any benefit will be paid to those whose names are on the form. If you didn’t do any of these, the benefits would be distributed based on the precedence’s standard order.
- First, to the surviving spouse;
- If none, to the child or children, with the portion for a deceased child distributed amongst the survivors of that child.
- Third, if no kids, to the parents in equal share or as a whole if it’s a lone survivor.
- Fourth, if no parents, to the administrator or executioner of the estate.
- Fifth, if none, to the next of kin determined based on the law of the state you reside.
Other Insurance
If your spouse or any member of your family was enrolled in the Federal Long-Term Care insurance (FLTC) program at the time of your death, the enrollment would continue as long as premiums are paid. Bear in mind that the first opportunity to enroll in the FLTC program will be available to your family member receiving a survivor’s annuity.
Any family member enrolled in the Dental and Vision Insurance program can continue enjoying the coverage, while anyone receiving a survivor annuity can enroll.
If you die, the funds in your TSP account will be paid out based on what you filled in the TSP-3, Beneficiary Election Form. If you didn’t fill the form, it would be paid based on the standard order of distribution outlined above.
If a surviving spouse is a beneficiary, they will keep the account and enjoy the same withdrawal and management rights as the original holder. Any other beneficiary will have to withdraw the funds or transfer it and close the account.
Contact Information:
Email: [email protected]
Phone: 8139269909
Bio:
For over 30-years Flavio “Joe” Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
