Survivor benefits reduce the retirement income a federal retiree receives from their FERS or CSRS annuity. Read how this works in situations with divorce, or when getting married after retiring.
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Survivor Benefits for FERS and CSRS
Here is a summary of how the survivor benefit generally operates under both FERS and CSRS:
| CSRS | FERS | |
| Full survivor benefit | 55% of (gross) annuity | 50% of (gross) annuity |
| Cost of full benefit | 2.5% of first $3600 ($90/yr.) + 10% of CSRS annuity amount (minus $3600) | 10% of annuity amount |
| Partial survivor benefit | 55% of any portion of annuity (min. $22.00) | 25% of (gross) annuity |
| Cost of partial survivor benefit | 2.5% of first $3600 ($90/yr.) + 10% of selected portion of CSRS annuity amount (minus $3600) | 5% of annuity amount |
Here are two examples for federal retirees who receive $50,000 annually, illustrated to show full survivor benefits from both FERS and CSRS annuities:
| CSRS | FERS | |
| Income from Federal pension (unreduced) | $50,000/year (gross) / $4166.67/mo. | $50,000/year (gross) / $4166.67/mo. |
| Amount of full benefit spouse would receive upon federal retiree’s death | 55% of $50,000 / $27,500/year (gross) / $2291.67/mo. | 50% of $50,000 / $25,000/year (gross) / $2083.33/mo. |
| Cost of full benefits | $3600 x 2.5% ($90) + $46,400 x 10% ($4640) = $4730/year ($394.17/mo.) | $50,000 x 10% = $5000/year ($416.67/mo.) |
| Income from Federal pension (reduced by survivor benefit) | $45,270/year (gross) / $3772.50/mo. | $45,000/year (gross) / $3750.00 |
This article isn’t necessarily about deciding if electing survivor benefits is a good idea, and instead focuses more on how survivor benefits work in certain marital situations, like if there’s an ex-spouse involved. That being said, if a federal employee gearing up for retirement is being pressured to replace survivor benefits with a life insurance policy, it is recommended that the fed really considers the consequences. Most notably, a federal annuitant’s spouse can only stay enrolled in FEHB after the retiree’s death if:
- the couple were both enrolled in FEHB at the time of death, and
- at least partial survivor benefits were elected.
It is also important to remember that the survivor benefits themselves, the reduction for those benefits, and the income from FERS and CSRS are all subject to annual increases because of COLAs.
Survivor Benefits and Marriage
When a married federal employee retires and claims their benefits, they have to choose whether to take a full or partial survivor benefit- or waive the survivor annuity altogether. To take a reduced benefit, or waive it, their spouse must consent by signing a waiver that is included in the application for retirement. Once that election is finalized, which happens 30 days after the first official payment from FERS or CSRS is issued, the decision cannot be changed until the marriage ends- either by death, divorce, or annulment.
What happens if a federal annuitant’s spouse dies first? – The survivor benefit reduction from the federal retiree’s FERS or CSRS annuity stops. Reductions from pension payments made before the spouse passed are not reimbursed.
What if a fed gets married after retiring? – As long as the change is made within two years of the marriage, survivor benefits can be added to a federal retiree’s pension income. This results in two reductions to this income, though. The first is the standard reduction that pays for the survivor benefit. The second is an actuarial reduction that typically results in less than 5% of the unreduced annuity amount. This second reduction is permanent, even if the marriage ends.
What if a fed remarries the same person after retirement? - If a federal annuitant and their spouse elected to waive the survivor benefit, then became divorced after the fed retired, and later on decided to remarry each other – they are not allowed to add a survivor benefit that is greater than the selection made upon retirement, during their first marriage.
What if a federal retiree gets divorced after retiring? – The ex-spouse can still be eligible for survivor benefits, but there needs to be a court order in place that explicitly states this, and it can only be for the survivor benefits option that was selected. So, if the benefit was waived when the fed was married, then it cannot be added upon a divorce that happened post-retirement.
What about federal employees who became divorced while still in service? With a qualifying court order, an ex-spouse may be entitled to FERS or CSRS survivor benefits. Such a court order can only be altered before the federal employee retires or dies. A reduction from a FERS or CSRS pension that results from a former spouse’s claim to survivor benefits can only be stopped if the ex-spouse is deceased, remarries before the age of 55, or a subsequent court order revokes their entitlement to the federal survivor benefits. Also, if the marriage lasted for 30 years or more, it doesn’t matter if the ex-spouse remarried before age 55, they can still be entitled to survivor benefits.
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Until Next Time,
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
