Computation of CSRS and FERS Benefits
Under both CSRS and FERS, the two essential variables that must be determined when calculating the amount of an employee’s basic federal retirement annuity are: the worker’s “high-3” average pay (see below) and the years of creditable federal service accumulated by the employee (see above). Other variables can affect annuity computations, including election of a survivor annuity (see below), failures to make required service deposits or redeposits (see above), or inclusion of an additional annuity related to voluntary contributions (see above).
High-3 Salary Base
The amount of an employee’s annuity depends primarily upon the worker’s “high-3” average pay (which includes locality pay) and length of service. High-3 average pay is the highest average annual pay produced by the employee’s basic pay rates during any three consecutive years—more specifically, 36 consecutive months—of service. In most cases, the last 36 months of service will produce the highest average pay. However, any consecutive 36 months of service will be used, if a larger high-3 pay base can be obtained. Months are deemed to be consecutive even if there was a break in service during that period.
In computing this high-3 figure, keep in mind that such things as locality pay, special salary rates and within-grade increases are part of basic pay, but certain other kinds of pay, such as overtime, awards, bonuses, allowances and differentials are not. Simply stated, basic pay is the amount of your earnings from which retirement deductions are taken. If retirement deductions aren’t taken out of your earnings, that source of income isn’t considered to be a part of basic pay for determining your high-3.
Note: If you are on leave without pay or are furloughed for less than six months during a calendar year that is part of your high-3 period, you are treated as though you had received your full rate of pay for that time. Such time also counts in determining your length of service.
CSRS and FERS: Basic Annuity Computations
CSRS Formula—“Standard” retirement benefits under CSRS generally are available to workers at age 55 with 30 years of creditable service, at age 60 with 20 years, or at age 62 with five years.
There are three parts to the CSRS basic annuity formula. If employees have more than 10 years of service, all the parts apply. If they have less than 10 years of service, only parts A and B apply. The same “high-3” average pay is used in all three parts.
A. Take: 1.5 percent of the “high-3” average pay and multiply the result by five years of service.
B. Add: 1.75 percent of the “high-3” average pay multiplied by all years and full months (with months credited proportionately) of service over five and up to 10.
C. Add: 2 percent of the “high-3” average pay multiplied by all years and full months (with months credited proportionately) of service over 10 years.
Example: Individual employee who has 30 years of creditable service, and “high-3” average pay of $60,000.
A. 1.5 percent x $60,000 x 5 = $4,500
B. 1.75 percent x $60,000 x 5 = $5,250
C. 2 percent x $60,000 x 20 = $24,000
Basic Annuity = $33,750
This formula produces the basic CSRS annuity, which generally is capped at 80 percent of an individual’s “high-3” average pay. That point is reached when an employee has 41 years and 11 months of creditable service. Contributions that employees have made to the retirement fund after they reach that limit are either refunded when they retire or may be used to purchase additional annuity, which is not subject to the 80 percent limit. (For the formula used to provide this additional benefit, see CSRS Voluntary Contributions, above.)
Also not subject to the 80 percent limit is unused sick leave, which can be combined with any days beyond a full month of actual service to increase a CSRS employee’s service time. To do this, unused days of actual service must be converted to sick leave days using the formula found in Credit for Unused Sick Leave in Section 3 of this chapter. Under that formula a day equals 5.797+ hours, a month about 174 hours. Any days that don’t add up to a full month are discarded.
FERS Formula—Like CSRS, the FERS computation formulas for an immediate, unreduced retirement benefit are based on an employee’s age, “high-3” average salary, and years of creditable service at retirement. Generally, FERS-covered employees are eligible for immediate, unreduced retirement benefits once they: reach age 62 and have five years of creditable service, reach age 60 and have 20 years’ creditable service, or attain the “minimum retirement age” (see below) and accumulate the specified years of service. There is an enhanced benefit formula for those who work to age 62 and later if they have at least 20 years of service. Here are the formulas:
- If under age 62: 1% x “high-3” average salary x all years and full months (with months credited proportionately) of service
- If at least 62 years old (and at least 20 years’ service): 1.1% x “high-3” average salary x all years and full months (with months credited proportionately) of service
(1) Individual who is age 57 and has 30 years of creditable service and a $60,000
“high-3” salary: 1.0% x $60,000 x 30 = annuity of $18,000
(2) Individual age 62, 20 years of creditable service, and $50,000 high-3 salary
1.1% x $50,000 x 20 = annuity of $11,000
Under P.L. 108-92, the FERS benefit is increased by 1 percentage point for periods of two months or longer during which the employee received disability compensation benefits.
There is no annuity limit under FERS.
Days of actual service beyond an even month may be combined with unused sick leave to increase a FERS employee’s service time. To do this, unused days of actual service must be converted to sick leave days using the formula found in Credit for Unused Sick leave in Section 3 of this chapter. Under that formula a day equals 5.797+ hours, a month about 174 hours. Any days that don’t add up to a full month are discarded.
FERS 'MRA+10' Reduced Benefit—FERS-covered workers (but not CSRS-covered workers) also may retire with an immediate annuity when they reach their minimum retirement age (MRA—see table) and have accumulated at least 10 years of creditable service. However, this “MRA+10” retirement option also imposes a 5 percent annuity reduction for each year (5/12 percent per month) the worker is under age 62 at retirement (age 60 if the employee has at least 20 years of service).
Example: Individual is age 58, has 10 years of creditable service, and a $45,000 high-3
average salary: 1.0% x $45,000 x 10 = $4,500 - 20% (four years under age 62)
= annuity of $3,600
A worker may retire on an immediate annuity after completing 10 years of service and reaching the MRA and postpone receipt of that annuity to a later date in order to diminish the applicable reductions for receiving benefits before age 62 (age 60 with at least 20 years of service). Under this arrangement, a former worker who is eligible to continue health benefits or life insurance coverage under the FEHB or FEGLI programs in retirement retains the right to re-enroll when the annuity begins. The right to enroll in a health benefits plan also includes any eligible survivors if the former worker dies before making application for benefits.
Generally, the FERS minimum retirement age for employees who have accumulated 30 years of creditable service was age 55 until 2003, when it began to climb by two months per year (paralleling the gradual rise in the age for receiving unreduced benefits under Social Security). Thus, the MRA reached age 56 in 2009, where it will remain through 2020; beginning in 2021 it will resume rising by two months per year, until it reaches 57.
Computing Annuities with FERS and CSRS Components
Employees who had five or more years of service when they transferred to FERS during one of the open seasons in which that was allowed or who left government, later returned, and elected to be covered by FERS will have both CSRS and FERS components to their annuities. The CSRS component will be computed using the CSRS general formula. These employees can calculate their basic annuity by computing their CSRS annuity component and adding this figure to their FERS annuity component.
Example: Individual who is age 60 with a $66,000 high-3 salary, and has 25 years applied to CSRS component and five years applied to FERS component.
(1) Compute Basic Annual
1.5 percent x $66,000 x 5 = $4,950
1.75 percent x $66,000 x 5 = $5,775
2.0 percent x $66,000 x 15 = $19,800
CSRS Component = $30,525
(2) Compute Basic Annual
1.0 percent x $66,000 x 5 = $3,300
(3) Add the two to determine
FERS Combined Basic Annuity:
$30,525 + $3,300 = Annuity of
Note: CSRS and FERS time is combined for eligibility for the 1.1 percent FERS multiplier for those retiring under FERS with at least 20 years of service at or after age 62.
Computing CSRS Offset Benefits
When a CSRS Offset employee becomes eligible for retirement benefits, the annuity is calculated in exactly the same way that it would be for any CSRS participant. However, if and when the employee becomes eligible to receive Social Security benefits, the CSRS annuity is reduced (“offset”) to take that portion of the Social Security benefit attributable to CSRS Offset service into account. The Social Security Administration takes the federal earnings for the period when the individual was covered by both Social Security and CSRS and computes two Social Security benefit amounts—the first with those earnings included, and the second with those earnings excluded. These two amounts are sent to OPM, which determines the CSRS Offset amount.
The offset reduction will be the lesser of:
(1) The difference between the Social Security monthly benefit amount with and without CSRS Offset service (service after December 31, 1983, covered under the interim CSRS provisions or CSRS Offset provisions); or
(2) The product of the Social Security monthly benefit amount, with federal earnings, multiplied by a fraction where the numerator is the employee’s total CSRS Offset service rounded to the nearest whole number of years and the denominator is 40.
Example: The following example shows how the offset would be computed for an employee with three years and eight months of Offset service:
First computation: (a) Social Security monthly benefit with federal months of Offset service=$600; (b) Social Security monthly benefit without federal Offset service=$550; (c) the difference is $50.
Second computation: (a) Social Security amount with federal earnings = $600 x four years (nearest whole year to three years eight months) = $2,400 divided by 40 = $60.
Since the offset is determined by taking the lesser amount of the two computations, the reduction in this case would be based on the first computation method—or $50.
If the individual has Social Security coverage in the private sector, the amount of reduction in the CSRS benefit will generally be less than the Social Security benefit to which the individual will be entitled. Thus, there typically is no net loss of benefits to the individual from applying the offset; in certain cases the result actually is a slightly higher benefit.
CSRS Offset employees who retire before age 62 and are eligible for Social Security benefits should apply for Social Security at age 62, rather than waiting as is allowed in that system (see Computation of Social Security Benefits in Section 9 of this chapter), because the offset begins at age 62 regardless of whether they are drawing Social Security benefits. By not taking Social Security benefits, they would be suffering the reduction without receiving the Social Security benefits being offset. If they retire after age 62, the offset reduction begins immediately on retirement, so such employees similarly should begin collecting Social Security immediately on retirement.
Offset employees continue to receive their full CSRS benefits if they are ineligible for Social Security benefits at age 62 when retired or when they retire, if after age 62.
Computing Annuities that Include Part-Time Service
Public Law 111-84 amended 5 U.S.C. 8339(p) to change the calculation of annuities of CSRS employees who have performed part-time service. As a result, all CSRS and FERS part-time employees retiring on or after October 28, 2009, including FERS part-time employees with a CSRS component, have their annuities calculated in the same way. In order to determine the amount of annuity these retiring employees are entitled to, agencies:
- Compute the actual time worked, and the number of full-time hours that could have been worked, for all periods of creditable civilian and military service. This includes time worked in excess of the scheduled part-time tour of duty, not to exceed full-time credit, as well as periods of creditable time in a non-pay status. (The actual time worked during non-pay status is based on the tour of duty in effect immediately before entry into the non-pay status.)
- Divide the actual hours worked by the total full-time hours available to obtain a proration factor, rounded to the nearest percent.
- Compute the high-3 average pay for the basic annuity, using only the full-time rates of basic pay for the position—that is, the rates the employee would have been paid if the service had been full time.
- Compute the unreduced basic annuity using the FERS and/or CSRS formula.
- Multiply the result by the proration factor in step 2 above. This yields the annuity to which the employee is entitled.
For FERS disability retirement based on either 60 percent or 40 percent of the retiree’s high-3, that high-3 is computed using the actual rate paid. In other words, the rates of pay for part-time service are prorated according to the employee’s part-time tour of duty.
Note: A special proration factor is used in computing certain non-disability annuities that include credit for part-time service with the Department of Veterans Affairs’ Veterans Health Administration.
For retirements prior to October 28, 2009, the annuity of a CSRS employee who performed any part-time service on or after April 7, 1986, was computed using the sum of two separate computations. The first used the employee’s creditable service through April 6, 1986 (including unused sick leave as of the date the employee separated); the second prorated the difference between full-time and part-time service performed from April 7, 1986, through the date of separation, including any leftover days from the length of service used in the pre-April 7, 1986, computation. To determine the CSRS proration factor, the actual hours worked from April 7, 1986, to the date of separation were divided by the total full-time hours possible from that date to the date of separation. If a FERS annuity included a CSRS annuity component and the employee performed part-time service credited in the FERS component, the FERS proration factor was used. However, if part-time service was performed after April 6, 1986, and was credited to the CSRS component, the CSRS proration factor was used.
Detailed information on how part-time service was credited for retirements before October 28, 2009, is at www.opm.gov/retirement-services/publications-forms/csrsfers-handbook/c055.pdf. The methodology in Subsection 55B is used to compute the annuities of all FERS and CSRS employees retiring on or after that date.
Non-Foreign Area Service
Individuals employed in certain non-foreign areas outside of the contiguous 48 states (Alaska, Hawaii, Puerto Rico, and U.S. territories or possessions) traditionally were eligible for a non-foreign area cost-of-living allowance (see Chapter 1, Section 4). While such non-foreign COLA payments were not subject to income tax, they also were not creditable as basic pay for retirement purposes.
Public Law 111-84 of 2009 started a conversion from non-foreign COLAs to locality pay over a three-year period beginning in calendar year 2010. Individuals who separated from service between January 3, 2010 and December 31, 2012 could elect to have the non-foreign COLA allowances received during that period count toward retirement credit, to the extent that the COLA plus any locality pay received did not equal more than the “rest of the U.S.” locality pay rate. They had to pay retirement deductions on the portion of the COLA credited as basic pay, and the employing agency had to pay employer contributions on the basic pay portion of the COLA.
Policy, worksheets, and examples are in Benefits Administration Letter 10-102 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters.
Special Retirement Supplement
FERS contains an additional benefit for certain workers called the Special Retirement Supplement. The supplement, which estimates the Social Security benefits earned through federal or postal employment under FERS, is intended to replicate the Social Security benefit payable for that period of service at age 62. The following classes of employees are entitled to the supplement:
- Voluntary retirees at the minimum retirement age (55-57) with at least 30 years of service.
- Voluntary retirees at age 60 with at least 20 years of service.
- Discontinued service retirees when the retiree attains the minimum retirement age (55-57).
- Members of Congress at age 50 with at least 20 years of service or 25 years of service at any age when they attain the minimum retirement age (55-57).
- Military Reserve technicians who are age 50 with at least 25 years of service who lose their military status.
- Law enforcement officers, air traffic controllers, and firefighters.
The Special Retirement Supplement was created by Congress to bridge the gap between retirement and when Social Security benefits begin. It is paid as an annuity until you reach age 62. If you transferred to FERS from CSRS, you must have at least one full calendar year of FERS-covered service to qualify for the supplement.
The FERS definition of eligibility, in combination with the FERS formula, allows participants to retire before age 62 and receive benefits above what they would receive were they to be covered by a “typical” private sector arrangement, in which the Social Security portion of the benefit would not become payable until age 62.
To determine the approximate dollar value of the supplement, take the Social Security estimate provided by the Social Security Administration, divide it by 40, then multiply the product by the number of years covered by FERS, rounded to the nearest whole number of years. Only years during which you have been employed under FERS count.
As a rule, if you have earnings from wages or self-employment that exceed the Social Security annual exempt amount under the Earnings Test (see The Earnings Test in Section 9 of this chapter), your Special Retirement Supplement will be reduced or stopped. However, the supplement payable to law enforcement officers, firefighters, air traffic controllers, and military reserve technicians who lose military status is not subject to the earnings test until they attain their minimum retirement age (55-57).
Computing Deferred Retirement Benefits
General CSRS Rules—Under CSRS, former employees who leave their money in the retirement fund are eligible for an annuity at age 62 if they have completed at least five years of creditable service and were covered by CSRS for at least one year within the two-year period immediately before separating.
The computation of benefits will be based on their “high-3” salary at the time of separation. It will not be adjusted for inflation. As a result, the value of the annuity will have eroded.
Deferred annuitants under CSRS are eligible to provide a survivor annuity for their spouses.
General FERS Rules—Workers covered under FERS are eligible for deferred benefits if they leave service after having completed five years of service covered by retirement deductions. Unreduced deferred benefits are payable at age 62, at age 60 with 20 years of service, or at the minimum retirement age (MRA) with 30 years of service. Separated workers electing the deferred benefit at their MRA with 10 years of service (but fewer than 30) will have their annuities reduced by 5 percent for each year (5/12 percent per month) they are under age 62. Nevertheless, because the computation will be performed earlier, there is less erosion of the relationship between the “high-3” base and the point in time at which the computation is performed. Thus, it is generally to the advantage of the retiree to exercise the option to take the deferred retirement at the earliest possible date rather than waiting until later, when full benefits are payable.
Deferred annuitants under FERS are eligible to provide survivor annuities for their spouses.
Unused Sick Leave—Unused sick leave is not creditable toward a deferred benefit computation under either system.
Cost-of-Living Adjustments—CSRS retirees are eligible for cost-of-living adjustments to their annuities regardless of the age at which they retire. With certain exceptions, FERS retirees have COLAs applied to their annuities only when they reach age 62. The exceptions include special category employees such as most law enforcement officers, firefighters and air traffic controllers, as well as disability retirees. COLAs are never added to the FERS special retirement supplement. See Chapter 4, Section 3.
Commencing Date of Annuities
In general, retirees are placed on the annuity roll on the first day of the month following their retirement. This is called the annuity commencing date.
Under FERS, the commencing date of an annuity for an employee who retires anywhere between the first of the month and the last day of that month is the first day of the following month. For example, the annuity of FERS employees who retire on any date in June would begin on July 1, with the first annuity payment being due on August 1.
Under CSRS, employees who retire within the first three days of a month have their annuities begin the following day. For example, CSRS employees who retire on June 1 would have their annuity begin on June 2, if June 2 then June 3, if June 3 then June 4. Their first annuity payment would be due on July 1, with the first payment being reduced in proportion to the number of days they were not on the annuity roll in June. The commencing date of annuities for CSRS employees retiring after the third of the month is the first day of the following month, with the first annuity payment being due on the first of the month subsequent to that, as in the FERS example above.
Under either CSRS or FERS, survivors, disability retirees, or those who take a discontinued service retirement based on involuntary separation have their annuities commence on the day after separation, death, or last day of pay, as appropriate. For employees with a gap between the date of separation and the beginning date of annuity, and who are eligible to continue health and life insurance into retirement, premiums will not be required between the end of the pay period in which the employee separates and the commencing date of the annuity.
General Types of Survivor Annuities
Under both CSRS and FERS, retiring federal employees can make provisions that will ensure the continuation of benefits to survivors in the event of the death of the retiree at the cost of a reduction in the amount of a retiree’s annuity.
Note: The value of the survivor protection is generally greater than the cost of the reduction to the annuity because an annuitant selecting a survivor option pays only part of the cost of the option by taking a reduction, and the remainder of the cost is borne by the system. On average, in both CSRS and FERS, the annuitant bears about half the cost and the retirement system the other half. Therefore, view with care the claims advanced by suppliers of financial products as alternatives to electing survivor coverage, given the difficulty in replacing the value of the federal subsidy to the survivor benefit.
The decision whether to provide a survivor annuity also affects eligibility of survivors for certain insurance coverage (unless your survivor would be otherwise eligible, such as through his or her own federal employment): for the Federal Employees Health Benefits program and the Federal Dental and Vision Insurance Program, you must leave a survivor annuity for your spouse and any eligible children to continue coverage; under the Federal Long Term Care Insurance Program, a survivor could not newly enroll after your death unless you had provided for a survivor annuity, although one currently enrolled at your death could remain covered by continuing to pay the premiums. There is no difference under the Federal Employees’ Group Life Insurance program. See Chapter 2.
“Legally married” same-sex spouses, meaning those married in a jurisdiction (including in a foreign country) that recognizes such marriages, regardless of place of residence, are eligible to be designated for survivor annuities effective June 26, 2013, the date of the U.S. Supreme Court decision in United States v. Windsor (133 S. Ct. 2675) that overturned the Defense of Marriage Act, which had defined marriage, for federal benefits purposes, as only between a man and a woman. See the June 28, 2013 Office of Personnel Management memo to agencies at www.chcoc.gov/transmittals. Benefits Administration Letter 13-203 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters further stated that following that court decision, children of such couples are to be treated the same for federal employment benefits purposes as children of married opposite-sex couples. That guidance also started a two-year period from the date of the court’s decision for those who were in such marriages as of that date, but who had been prevented from providing survivor benefits because of the prior law, to elect those benefits under the same policies governing a new marriage during retirement; see Electing Survivor Benefits for a Spouse Acquired After Retirement in Chapter 4, Section 2. (Note: Eligibility does not apply to common law marriages or to domestic partnerships, civil unions or other similar arrangements not formally recognized as a marriage.)
The basic types of survivor annuity options available to federal retirees include:
Annuity With Survivor Benefit to Widow, Widower, or Former Spouse—If you are married when you retire, the Office of Personnel Management will compute full survivor benefits for your spouse unless you and your spouse elect less than the full survivor amount (or no survivor annuity) at the time of your retirement. A court order awarding a survivor annuity to a former spouse (from whom you were divorced after May 7, 1985) reduces the maximum amount that can be paid to a current spouse. If there is no court order in effect, you may still elect to provide a survivor annuity for a former spouse; however, if you are married, you may do so only with the consent of your current spouse.
Under CSRS, you may use your entire annuity or any portion of it as a base for a survivor annuity. That portion may be expressed as a percent or a specific dollar amount. (If a dollar amount is chosen, it can be as small as $1.) Upon your death, after retirement, your survivor will receive either an annuity of 55 percent of your full annuity or of whatever base you and your spouse jointly elected in writing.
To pay for a CSRS survivor annuity, your own annuity will be reduced by:
- 2.5 percent of the first $3,600 used as a base for the survivor annuity; plus
- 10 percent of any amount over $3,600 used as a base.
Under FERS, there are only two survivor annuity options: 50 percent or 25 percent of your full annuity. You may not elect the lower percentage or no annuity unless your spouse agrees to it in writing. To pay for a full FERS survivor annuity, your own annuity will be reduced by 10 percent. If you and your spouse jointly agree to a 25 percent survivor annuity, your own annuity will be reduced by 5 percent.
Under both CSRS and FERS, the benefit to your survivor will continue until he or she dies or remarries, unless the remarriage occurs after age 55. If it occurs before age 55, the survivor annuity is terminated but may be restored if that remarriage is dissolved by death, annulment, or divorce. On the other hand, if the intended beneficiary dies or remarries while you are still living, you must notify OPM. Then the entitlement to that survivor benefit will be terminated and your own annuity restored to its unreduced rate.
Survivor Annuity for a Former Spouse—Under certain circumstances, a survivor annuity may be paid to a former spouse of a retiree. For example, a court order may award a survivor annuity to a former spouse. If you are married, the maximum amount that can be paid to your current spouse will be reduced. If there is no court order in effect, you may still elect to provide a survivor annuity to a former spouse; however, if you are married, you may do this only with the consent of your current spouse. To begin that process, a former spouse entitled to a survivor benefit may write the Office of Personnel Management at P.O. Box 45, Boyers, PA 16017-0045 (be sure to include the deceased’s full name, claim number, date of death, date of birth, and Social Security number, if known) or call OPM at (888) 767-6738 or (724) 794-2005, TDD (800) 878-5707. Also see Survivor Annuity to Former Spouse in Chapter 7, Section 2.
Annuity With Benefit to Named Person Having an Insurable Interest—If you are in good health when you retire, as demonstrated by a current medical exam, you may elect an Annuity With Benefit to Named Person Having an Insurable Interest. “Insurable interest” is an insurance term applying to a person who would benefit financially by your continuing to be alive.
An insurable interest annuity is presumed to exist for a current spouse, a blood or adoptive relative closer than a first cousin (such as a child), a former spouse, a person to whom you are engaged, a person with whom you are living in a relationship that would constitute a common-law marriage, and (effective July 20, 2012 under rules at 5 CFR 831 and 842) a same-sex domestic partner who meets certain standards (see Domestic Partners in Chapter 8, Section 4), a former same-sex domestic partner meeting those standards, or a person with whom the employee has agreed to enter into a such a partnership.
If the person you name is not one of these, you will need to submit affidavits from one or more persons whose personal knowledge can confirm that the person you name meets the insurable interest criterion. To do that, the affidavits must explain the relationship between you and the person you name, the extent to which the person is dependent on you, and the reasons why he or she might reasonably expect to derive financial benefit from your continued life.
If you elect an Annuity With Benefit to Named Person Having an Insurable Interest, your annuity will be reduced by a percentage that depends on the difference between your age and the age of the person you name, as shown in the Insurable Interest Annuity Reduction table. Upon your death after retirement and for the rest of his or her life, the person named as having an insurable interest will receive an annuity equal to 55 percent of your reduced annuity under both CSRS and FERS. However, if the person named as having an insurable interest dies before you die, your annuity will be restored to its unreduced rate upon written request to OPM.
The insurable interest option is not available to persons who receive disability retirement benefits or where making such an election would conflict with a court order.
This election may be changed to a reduced annuity with a survivor benefit to widow or widower if you marry after retirement. Your written request for such a change must be received at OPM no later than one year (or two years if married after February 26, 1986, or retired after May 6, 1985) after you marry. Once a change in election is accepted by OPM, it cannot be changed.
A spouse insurable interest beneficiary is eligible to continue FEHB coverage after the retiree’s death under the same terms as a regular spousal survivor; other insurable interest beneficiaries should contact OPM to determine their status.
Annuity Without Survivor Benefit—This type of annuity option is available to all retiring employees. It provides annuity benefits to you only. If upon retirement you elect this type of annuity, no survivor benefits may be paid to your widow or widower. If a retiring married employee elects an annuity without survivor benefits or a reduced annuity with survivor benefits based on less than all of the employee’s annuity, the employee must provide OPM with either: (1) the spouse’s signed and notarized consent to the loss of or reduction in survivor benefits, or (2) a request for waiver of spousal consent by OPM. The spousal consent requirement can be waived if the spouse’s whereabouts are unknown or a court finds that consent is not appropriate.
If you choose an annuity without survivor benefits, your spouse and any other family members covered under your Federal Employees Health Benefits plan will lose that coverage upon your death unless they are otherwise eligible for coverage. In addition, they will lose the ability to initially enroll in the Federal Long-Term Care Insurance Program, unless otherwise eligible for coverage, although they could continue FLTCIP coverage if already enrolled.
See Section 2 in Chapter 4 for the allowable changes in survivor elections after retirement in various circumstances.
Survivor Benefits for Children
Survivor annuity benefits are payable for eligible children of deceased annuitants (as well as of active employees; see Benefits Upon Death in Service in Chapter 8, Section 4). The annuitant does not elect or pay for these benefits and cannot prevent the children from receiving the benefits, which are the same in each retirement system and for each type of retirement. Children’s benefits are payable whether or not an adult survivor is being paid—and if one is being paid, whether the marriage was between an opposite-sex couple or a same-sex couple (if the marriage occurred in a jurisdiction that recognizes such marriages, regardless of the place of residence).
A child must be unmarried, be under the age of 18, and have been dependent on the deceased retiree. A child is dependent on the deceased retiree if he or she is born within wedlock, adopted, a stepchild or recognized child born out of wedlock who lived with the retiree in a regular parent-child relationship, or a recognized child born out of wedlock whom the retiree supported, either based on a court order or with voluntary regular and substantial contributions.
Unmarried children age 18 or over who can’t support themselves because of a disability that began before age 18 and unmarried children age 18 to 22 who are full-time students also are eligible.
The children’s rate when there is a surviving parent is $510 per month per eligible child or $1,532 per month divided by the number of eligible children (if four or more). If there is no surviving parent the rate is $613 per month per eligible child or $1,839 per month divided by the number of eligible children (if four or more). Amounts differ under certain circumstances. The amount payable to children of CSRS employees is not reduced by any Social Security survivor benefits payable to the children; benefits to children of FERS and CSRS Offset employees are reduced by the amount of a Social Security benefit.
If a child’s annuity is terminated because of marriage and the marriage ends before the child is age 22, inform the Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045, phone (888) 767-6738. OPM may be able to reinstate the child’s benefit. Disabled children who are over the age of 22 may also be eligible for reinstated survivor benefits if their marriages end. Disabled children who were married when the employee or annuitant died may be eligible for survivor benefits if their marriages end. Provide a copy of the divorce decree, annulment papers, or the death certificate of the child’s spouse.
Adopted Children—Adopted children are eligible for survivor benefits if they lived with the deceased, are the subject of an adoption petition by the deceased prior to his or her death, and were adopted by the surviving spouse after the employee or retiree died.
Adult Student Children—Unmarried sons or daughters, age 18 to 22, who are full-time students at a high school, trade school, technical or vocational institute, junior college, college, university, or comparable recognized educational institution may apply for survivor benefits. Job Corps is not considered an educational institution.
The child’s parent, guardian, or other responsible adult will receive a notice with instructions on how to continue an eligible student’s annuity after he or she reaches age 18. Survivor annuity payments for an adult student stop at the end of the month before the one in which he or she: marries, dies, ceases to be a full-time student, enters military service on active duty, enters any of the military service academies, transfers to a non-recognized school, fails to submit proof (when requested) that he or she is attending school full-time, or reaches age 22.
If an adult student whose 22nd birthday falls during the school year (September 1 through June 30) continues full-time schooling, OPM can continue payments to the end of the month preceding the one in which full-time schooling stops or to June 30, whichever is earlier. If the student’s 22nd birthday is between September 1 and July 1 of the following year and the death of the employee/annuitant was during that same period, the student may be eligible for a monthly annuity.
When a student is no longer eligible, the payee is responsible for notifying OPM’s Retirement Surveys and Students Branch, 1900 E St. N.W., Washington, DC 20415, phone (888) 767-6738 or (724) 794-2005. Failure to notify OPM if a student loses annuity eligibility will lead to overpayment and subsequent action to collect the money.
An annuity that was terminated because the student left school or ceased being a full-time student can be resumed if he or she again becomes a full-time student before reaching age 22, provided he or she has not married. Contact the Retirement Surveys and Students Branch. Also, OPM will continue to pay annuity during breaks between school years, if these breaks are not longer than five months and if the student shows clear intention to continue as a full-time student.
Representative Payees for Children—A child’s annuity is paid to his or her court-appointed legal guardian. If there is no legal guardian, payments will be made, at OPM’s discretion, to the person who is responsible for the child. When a student beneficiary reaches age 18, OPM will send the payments directly to the student on request.
When the Child’s Family Circumstances Change—Inform OPM when the deceased annuitant’s or employee’s widow, widower, or former spouse dies, if he or she was the parent of any children who continues to receive a survivor annuity. In some cases, the death can result in an increase in the child’s payments. OPM will establish a new payee for the child—his or her court-appointed guardian if there is one, and if none, the payments will usually be sent to the person responsible for the child.
Insurance Coverage—For information on health benefits coverage for children, see FEHB Eligibility and Enrollment Rules in Chapter 2, Section 1; for what to do if eligibility is lost, see Temporary Continuation of Coverage in that section. For information on long-term care coverage see Eligibility in Chapter 2, Section 3; for information on eligibility for dental and vision insurance coverage see Eligibility in Chapter 2, Section 4.
Death Benefits When No One is Eligible for Survivor Annuity
If you leave survivors who qualify for a survivor annuity, any unpaid annuity accrued to date of death is payable immediately. A lump-sum death benefit may be payable later if, when the survivors’ annuities end, the total annuity paid to you and the survivors is less than your contributions to the retirement fund. If you leave no survivors who can qualify for a survivor annuity, a lump-sum death benefit consisting of the annuity accrued to date of death is generally payable immediately.
Order of Beneficiaries—A lump-sum death benefit is payable to the person or persons indicated below:
- To the beneficiary designated by you;
- If you do not designate a beneficiary, to your widow or widower;
- If you leave no widow or widower, to your child or children in equal shares, with the share of any deceased child distributed among the descendants of that child;
- If none of the above, to your parents (or parent);
- If none of the above, to the executor or administrator of your estate;
- If none of the above, to your next of kin who may be entitled under the laws of the state in which you are domiciled at the time of your death.
You do not need to designate a beneficiary to receive the lump-sum death benefit unless you wish to name a person or persons not mentioned in the order of precedence shown above (or unless you wish to name a person who is mentioned but in a different order or for a different share). A designation of beneficiary is for lump-sum death benefit purposes only and does not affect the right of any person who can qualify for a survivor annuity. A designation of beneficiary must be in writing (Standard Form 2808 under CSRS; SF 3102 under FERS), and must be received by the Office of Personnel Management before your death. These forms are available at personnel offices and at www.opm.gov/forms.
If you designate a beneficiary, remember to keep your designation current. Changes in your family or employment status without a corresponding change in your beneficiary designation may result in a settlement other than you intended.
Applying for Retirement and Survivor Benefits
Current Employees—Retirement benefits are not paid automatically. Current employees wishing to retire should contact their agency personnel office and complete a retirement application form: Standard Form 2801 (CSRS) and Standard Form 3107 (FERS), available at personnel offices and at www.opm.gov/forms. Completed forms should be submitted to their personnel office.
Note: Voluntary retirement is a form of voluntary separation and submitting the application is equivalent to submitting a resignation. As a result, the employee has the same rights as any other employee involved in a voluntary action. This means that you can establish the date on which your retirement will take place or withdraw it if you change your mind before the separation is effective. However, an agency may decline your request to withdraw an application before the effective date of separation if it has a valid reason (for example, if the position has been eliminated or someone has been hired to fill it) and explains that reason in writing.
Survivors of Current Employees—Notify the employee’s office of his or her death. That office will call the agency’s servicing personnel office. The agency will contact OPM using a CSRS Death-in-Service Quick Pay form or a FERS Basic Death-in-Service form. That will allow OPM to begin making expedited interim payments to the survivors. The agency will also provide the surviving spouse with the necessary forms to complete the process. These include the application for death benefits and life insurance. The agency will be responsible for assisting the survivor to complete the paperwork. The Application for Death Benefits form (Standard Form 2800 for CSRS or SF 3104 for FERS) should be submitted to OPM, Retirement Operations Center, Attn: Employee Death, P.O. Box 45, Boyers, PA 16017-0045, along with a copy of the employee’s death certificate and a copy of the certificate of marriage. A widow or widower who is claiming benefits for himself or herself and on behalf of children should file one application.
Separated Employees or Survivors of Retirees—Call (888) 767-6738 or (724) 794-2005, TDD (800) 878-5707, email firstname.lastname@example.org or write to:
Office of Personnel Management
Retirement Operations Center
P.O. Box 45
Boyers, PA 16017-0045
Calling OPM’s Retirement Information Office at the numbers above will speed up the time required for survivors of federal retirees to receive their benefits. OPM’s Survivor Express allows the payment of a survivor annuity as soon as the survivor reports the retiree’s death. The survivor then has 30 days in which to submit the required documentation; the forms will be supplied by OPM. This approach also speeds up the time needed to process life insurance claims and change health insurance enrollments.
Reconsideration and Appeal—When OPM has reviewed your retirement application, it will send you an initial decision letter specifying what your retirement benefits will be. That letter will describe your right to request reconsideration if you disagree with OPM’s decision and the procedure to follow. Reconsideration requests must be in writing and must include your full name, address, date of birth, and claim number (if one has been issued to you), and must state the basis for your disagreement.
To be considered, your request must be received by OPM within 30 calendar days from the date of the initial decision. OPM may extend the time for filing if you are able to show that you weren’t notified of the time limit and weren’t otherwise aware of it or were prevented by circumstances beyond your control from making a request within the time limit.
OPM will issue a final decision on a reconsideration request in writing to you. It will detail its findings and conclusions and advise you of your right to appeal to the Merit Systems Protection Board and the procedure to follow. Copies of the final decision also will be sent to any competing claimants, where applicable, and to your agency. If there are other claimant(s) contesting your entitlement to a portion or all of your retirement benefit (for example, a former spouse), OPM will notify each about the right to substantiate the claim in writing, after which it will issue a final decision.
OPM decisions concerning entitlements under insurance programs aren’t appealable to the MSPB.
Retirement Information and Services
Because OPM does not have current records of employees, you must contact your agency personnel office or retirement counselor for retirement information and forms relating to retirement. However, government-wide retirement policy is in the CSRS and FERS Handbook for Personnel and Payroll Offices, available at www.opm.gov/retirement-services/publications-forms/csrsfers-handbook.
Retirement forms are at www.opm.gov/forms.
OPM handles inquiries from or about civil service annuitants. See the accompanying text in How to Contact OPM.
All inquiries should include the name of the former employee, the individual’s claim number, date of birth, and Social Security number. This data will allow OPM to provide the most prompt response.
While it is possible to get answers to urgent inquiries by telephone, OPM recommends that only questions that are reasonably uncomplicated and that do not require the review of records be telephoned in. The Retirement Information Office line, (888) 767-6738 or (724) 794-2005, TDD (800) 878-5707, is open on standard business days from 7 a.m. to 7 p.m. Eastern time. (OPM also staffs a Retirement Desk available on a walk-in basis at its headquarters at 1900 E Street N.W., Washington, DC that is open 7:30 a.m. to 5:30 p.m. on business days.)
When an inquiry is complex, requires the review of records, or seeks to alter records, OPM strongly recommends inquiring by letter. Most written inquiries should be addressed to:
Office of Personnel Management
Retirement Operations Center
P.O. Box 45,
Boyers, PA 16017-0045
If the individual can identify the exact nature of his or her inquiry, he or she can use the information under Addresses for Specialized Retirement Functions to determine if the appropriate office has a special address. Otherwise, refer a written inquiry to the Retirement Operations Center.
Online Services—Retirement Services Online, https://www.servicesonline.opm.gov, allows retirees to: view the status of their cases while on interim pay; update their email addresses; change federal or state income tax withholding; buy savings bonds; request a duplicate Form 1099-R; change personal identification number; establish an allotment to an organization; change mailing address; sign up for direct deposit; set up a checking or savings allotment; view an annuity statement; report a missing payment; or report the death of an employee or annuitant. The site also has links to retirement pamphlets and other publications.
Calculators at www.opm.gov/retirement-services/calculators project federal annuity and Thrift Savings Plan benefits, how much federal income tax to have withheld from annuity payments, and how much of an annuity is tax-free.
Information on insurance programs is at www.opm.gov/healthcare-insurance. OPM forms, many of them fillable online, are at www.opm.gov/forms.