Edward A. Zurndorfer–
For annuitants who were covered by the Civil Service Retirement System (CSRS) including CSRS Offset annuitants, there are surviving annuity benefits that may be payable to a surviving spouse, children, an individual with an insurable interest or a former spouse. This column discusses CSRS/CSRS Offset survivor annuity benefits payable to a surviving spouse.
Definition of a CSRS/CSRS Offset Annuitant
It is important to define what an annuitant is and what an annuitant is not. A CSRS/CSRS Offset-covered employee is considered to be a CSRS/CSRS Offset annuitant if he or she dies on or after the date on which an annuity begins to accrue and: (1) Meets all requirements and has applied for CSRS retirement and (2) has separated from his or her agency employee rolls. The following examples illustrate:
Example 1. Jason, age 62, was a CSRS-covered employee and retired from federal service on March 2, 2019. Jason died suddenly on March 20, 2019. Since Jason met all requirements for retirement and formally applied for retirement (his annuity started to accrue on March 3, 2019), Jason was considered an annuitant when he died on March 20, 2019.
Example 2. Wendy, age 62, was a CSRS-covered employee and intended to retire from federal service on March 2, 2019. Wendy died suddenly on Feb. 20, 2019. Since Wendy had not separated from federal service as of the day of her death, she was not considered a CSRS annuitant.
Spousal Survivor CSRS Annuity Requirements
A spousal survivor annuity is payable to the spouse of a deceased CSRS annuitant only if the annuitant elected a reduced annuity to provide the survivor benefit. To qualify as a surviving spouse of a deceased annuitant the individual must be married to the annuitant at the time of the annuitant’s death and must meet one of the following requirements: (1) The surviving spouse and the annuitant must have been married for at least 9 months while the annuitant was in federal service; (2) a child was born of the marriage. For this purpose, a child includes: (a) A child born posthumously to the deceased annuitant and spouse; (b) a child born to the deceased annuitant and spouse before they were married; and (c) a child of a prior marriage between the deceased annuitant and spouse. Note that an adopted child is not considered a child born of the marriage; or (3) the death of the annuitant was accidental. For the death to be considered accidental, the death must be from a cause that is considered accidental under the FEGLI program.
Effect of a Former Spouse’s Eligibility for the Spousal Survivor Annuity
A court order awarding a former spouse a survivor annuity prevents OPM from paying the surviving spouse the portion of the survivor annuity awarded by the court order. The surviving spouse (if otherwise eligible) remains eligible for the complete survivor annuity if and when the former spouse loses eligibility.
Note that even when no benefits are currently payable to the surviving spouse because of the court-ordered entitlement of the former spouse, the surviving spouse is entitled to FEHB coverage. This is assuming that the deceased annuitant-spouse had self plus one or self and family coverage. The following example illustrates:
Charles elected a full survivor annuity for his wife Anne when he retired in 2000. In 2005 they divorced, and a court order awarded Anne the full CSRS survivor annuity. In 2010 Charles married Kim and elected a full survivor annuity benefit for her. Charles died in 2017. Upon his death, the full survivor annuity benefit was paid to Anne because of the court order. Kim could retain FEHB coverage by paying OPM directly for the FEHB health insurance.
Amount of the CSRS Spousal Survivor Annuity
The maximum possible survivor annuity is 55 percent of the CSRS annuitant’s annuity before it is reduced by the cost of the survivor benefit (the unreduced annuity). This will generally be about 60 percent of the annuitant’s current gross annuity. The CSRS survivor annuity can be less than 55 percent if the annuitant elected to provide less than the maximum survivor annuity benefit and the spouse gave his or her written and notarized consent.
Cost-of-Living Adjustments (COLAs)
Every COLA given an annuitant increases the survivor annuity by the same percentage. Upon the death of the annuitant, the initial annuity paid to the survivor will include all the previous COLAs that had been granted the annuitant. The survivor annuity will also be increased by all future COLAs.
Survivor Annuity to a Spouse Upon the Death of a CSRS Offset Annuitant
A survivor annuity payable to the spouse of a deceased CSRS Offset annuitant is computed in the same manner as a survivor annuity payable to the spouse of a deceased annuitant with full CSRS coverage.
However, the amount of a survivor annuity payable for the surviving spouse of a deceased CSRS Offset annuitant may be reduced if the surviving spouse is eligible for Social Security survivor benefits based on the deceased’s Federal service covered by Social Security. If a surviving spouse is not entitled to a Social Security survivor benefit, then the surviving spouse is paid the full CSRS survivor annuity benefit.
Social Security Survivor Benefits Payable
If Social Security survivor benefits (based on the deceased annuitant’s Federal service under Social Security) are payable:
1. The surviving spouse receives full CSRS survivor benefits until he or she becomes entitled to Social Security survivor benefits. This normally occurs at age 60. However, such benefits may begin before age 60 if the surviving spouse is disabled or has a minor child in care.
2. When the spouse becomes entitled to Social Security survivor benefits, the CSRS survivor annuity is reduced (offset) by the amount of the survivor’s Social Security benefit attributable to the period the deceased annuitant was under CSRS Offset.
The reduction (offset) of a CSRS survivor annuity ceases on the date the surviving spouse loses eligibility for Social Security survivor benefits due to any one of the following reasons: (1) The surviving spouse becomes eligible for a Social Security benefit based on his or her own earnings under Social Security and the benefit exceeds the spousal Social Security survivor benefit; (2) the surviving spouse remarries before age 60; or (3) the Social Security (mother or father) benefit stops because a minor child reaches age 16 and the surviving spouse is under age 60. Note that entitlement to a Social Security survivor benefit is not considered terminated when the benefit payable is reduced to zero due to the application of the Social Security “earnings” test. Once the offset ceases, the surviving spouse receives the full CSRS spousal survivor annuity.
Duration of a CSRS/CSRS Offset Annuity
The CSRS or CSRS Offset survivor annuity payable to a spouse begins on the day after the death of the annuitant and ends on the last day of the month preceding the month in which the survivor annuitant dies or remarries before age 55, if the marriage to the deceased CSRS or CSRS annuitant lasted for fewer than 30 years, as the following example illustrates:
Jessica, a CSRS survivor annuitant, died on June 15, 2019. Her CSRS survivor annuity ended on May 31, 2019.
*** Written by Edward A. Zurndorfer, who is a Certified Financial Planner™, Chartered Financial Consultant, Chartered Life Underwriter, Certified Employee Benefits Specialist and Enrolled Agent in Silver Spring, MD. He is the owner of EZ Accounting and Financial Services, an accounting, tax preparation, and financial planning firm also located in Silver Spring, MD. He is a seminar speaker at Federal employee retirement seminars throughout the country for the National Institute of Transition Planning, Inc. He is also a weekly columnist for MyFederalRetirement.com. Raymond James is not affiliated with and does not endorse the opinions or services of FEDZONE or Edward A. Zurndorfer or any of the above listed organizations. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer and/or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While the employees of Serving Those Who Serve 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. Telephone number, 301-681-1652.
Spousal Survivor Benefits