Federal Employee FERS Survivor Benefits After Death

Federal Employees Retirement System (FERS) survivor benefits are designed to provide financial support to the surviving spouse, ensuring they have the necessary resources to manage their financial obligations after the loss of their partner. 

Breaking Down Benefits for Surviving Spouse and Children of Current Federal Employees who Pass Away before Retirement

There are three basic benefits to discuss regarding payments to a surviving spouse and children when an active federal worker passes away. These are:

• The Basic Death Benefit – one-time lump sum payment
• A Survivors Pension – monthly lifetime payments 
• FEGLI Payout – FEGLI Basic, along with options A and B, would be payable to listed beneficiaries

Read this article for information about TSP inheritances.

The Basic Employee Death Benefit for Surviving Spouse

The Basic Employee Death Benefit is payable to the current spouse and is designed to help them manage immediate financial needs following the death of their partner. The benefit is a lump sum payment, which can be used to cover funeral expenses, outstanding debts, or other urgent financial obligations. The Basic Employee Death Benefit is calculated as a lump sum equal to 50% of the deceased employee’s final salary, plus an additional fixed amount of $42,608. The Office of Personnel Management (OPM) provides a calculator to help determine the exact amount of the benefit payable to the surviving spouse. Eligibility for the Basic Employee Death Benefit is primarily determined by the marital status of the deceased federal employee at the time of death. The benefit is payable to the current spouse, provided they were married to the deceased employee for at least nine months prior to their death or had a child with the deceased. Exceptions to this rule include cases where the death was accidental, in which case the nine-month requirement may be waived. Additionally, if the deceased employee had a former spouse entitled to a portion of the benefit via court order, the amount may be divided accordingly.

Learn about FERS, the TSP, and survivor benefits by attending a free online federal retirement seminar. 

FERS Monthly Survivor Annuity for Spouses and Children

The FERS survivor annuity is a monthly pension designed to replace a portion of the deceased employee’s income, ensuring the surviving spouse can maintain their standard of living. The annuity is paid from the federal employees retirement and disability fund, and the amount is determined based on several factors. To be eligible. the deceased must have at least 10 years of creditable federal service and at least 18 months would’ve had to have been in a civilian job. The amount of the survivor annuity is determined based on the deceased employee’s years of service, salary, and retirement age. Generally, the annuity is calculated as a percentage of the deceased employee’s retirement benefits. In some cases, a former spouse could be entitled to a portion of the survivor annuity. This entitlement is typically determined by a court order or divorce decree, which specifies the percentage of the annuity payable to the former spouse. Dependent, unmarried children can receive the monthly payments until they are 18 or, if a student, 22. Disabled dependents are entitled to a monthly survivorship as well so long as the disablement occurred before turning age 18. 

FEGLI Basic Benefits and Optional Coverage

The Federal Employees’ Group Life Insurance (FEGLI) program provides life insurance coverage for federal employees. Here’s a breakdown of the different types of FEGLI coverage that would be payable to beneficiaries:

• FEGLI Basic Insurance: Default coverage that most federal employees have unless they opt out. The benefit amount is equal to the employee’s annual basic pay, rounded up to the next $1,000, plus an additional $2,000. 
• FEGLI Option A (Standard Insurance): This optional coverage provides an additional $10,000 in life insurance. Employees must elect this coverage and pay the full premium.
• FEGLI Option B (Additional Insurance): This allows employees to purchase extra coverage in multiples of their annual basic pay—up to five times their salary. The cost of this coverage increases with age.

Receive a Free Federal Retirement Handbook (PDF). 

Steps to Take to Report the Death of a Federal Employee

Who Should Be Notified Upon the Death of an Employee?

Upon the death of a federal employee, the surviving spouse should notify the OPM, the deceased employee’s agency, and any relevant insurance providers. Timely notification is essential to initiate the process of accessing survivor benefits and to ensure that all necessary arrangements are made. OPM will guide the surviving spouse through the process and provide information on the benefits available.

Meet with an Federal Benefits Expert

Federal Employees Retirement System Death Benefits

The Federal Employees Retirement System (FERS) has specific procedures in place for handling death benefits, ensuring that surviving spouses receive the support they need. The OPM plays a central role in managing these benefits, processing applications, and providing guidance to surviving spouses.

Role of the Office of Personnel Management (OPM)

The OPM is responsible for administering FERS survivor benefits, including the basic employee death benefit and the survivor annuity. The OPM processes applications, determines eligibility, and calculates the benefits payable to surviving spouses. They also provide resources and support to help surviving spouses understand their benefits and navigate the application process.

Impact on Health Insurance Benefits

Reporting the death of a federal employee can also impact insurance benefits, such as life insurance and health insurance. The surviving spouse may be eligible to receive a lump sum payment from the deceased employee’s life insurance policy, and they might also have the option to continue health insurance coverage under the Federal Employees Health Benefits (FEHB) program. The surviving spouse is likely to be eligible for continuation of health coverage if the deceased was enrolled in an FEHB family plan including the survivor, and they are receiving a federal survivorship pension. 

Differences Between FERS and CSRS (Civil Service Retirement System) Death Benefits

Understanding the differences between FERS and CSRS is important for surviving spouses, as the benefits and eligibility criteria can vary significantly. Each system has its own provisions for survivor benefits, and it is essential to understand these differences to ensure the surviving spouse receives the appropriate support.

How Do Retirement Benefits Differ Between the Two Systems?

Retirement benefits under FERS and CSRS differ in terms of eligibility, calculation, and payment. FERS is a three-tiered system that includes Social Security, a basic benefit plan, and the Thrift Savings Plan (TSP), while CSRS is a standalone system that does not include Social Security. These differences can impact the amount of the survivor annuity and the overall benefits available to the surviving spouse.

What are the Key Differences in Survivor Benefits?

The key differences in survivor benefits between FERS and CSRS include the calculation of the survivor annuity, eligibility criteria, and the availability of additional benefits. FERS survivor benefits are generally more flexible, with options for both current and former spouses, while CSRS benefits may be more limited. Understanding these differences can help surviving spouses make informed decisions about their benefits.