Edward A. Zurndorfer, CFP

When a federal employee or annuitant dies, annuity benefits may be payable to a surviving spouse.

This column discusses the surviving annuity benefits payable to surviving spouses of employees covered by CSRS and CSRS-Offset. The first part of the column discusses survivor annuity benefits for spouses of deceased employees; the second part of the column discusses survivor annuity benefits for spouses of deceased annuitants.

Spousal Survivor Annuity - Death of an Employee

In general, in order for survivor annuity benefits to be payable, a deceased employee must have: (1) completed at least 18 months of creditable civilian service; and (2) died while subject to CSRS deductions. An individual's death is considered as a "death in service" and survivor annuity benefits are payable if: (1) the individual was an applicant for disability retirement but died before final separation; or (2) the individual was an applicant for immediate retirement but died before the commencing date of the annuity, even though separation had occurred.

Except for members of Congress, an individual is not considered to be either a retiree or an employee if he or she separates from service and dies either before applying for retirement or before the commencing date of a deferred annuity. In that case, only a lump sum payment of the deceased employee's CSRS contributions is payable to the surviving spouse.

For a survivor annuity to be payable to a spouse, the spouse must meet one of the following requirements: (1) the surviving spouse and the employee must have been married for at least nine months. The aggregate time of all marriages between the spouse and the employee should be used to determine the total length of marriage; and (2) a child was born from this union. The child could have been born posthumously to the deceased employee and spouse, or the child was born prior to the marriage; or (3) the death of the employee was accidental. There also can be no court order awarding the total survivor annuity to a former spouse.

If a former spouse were awarded only a portion of the total survivor annuity, the surviving spouse will receive the remainder. If a court order awards the total survivor annuity to a former spouse, then the surviving spouse will not receive anything.

A spousal survivor annuity is equal to 55 percent of a CSRS annuity, computed as if the employee had retired on a disability retirement as of the date of death. In particular, a spouse receives 55 percent of the higher of:

• an annuity computed under the general formula based on the deceased employee's high-three average salary and length of service to date of death, including credit for unused sick leave.
• a "guaranteed  minimum" which is the lesser of 40 percent of the employee's high-three average salary or the regular CSRS annuity obtained after increasing the deceased employee's length of service by the period of time between the date of death and the date he or she would have turned 60.

Survivor benefits to the spouse of a deceased CSRS-Offset employee are the same as the benefits payable upon the death of an employee with full CSRS coverage until and unless the survivor becomes eligible for Social Security survivor benefits. In particular, a surviving spouse who is not entitled to Social Security survivor benefits continues to receive full CSRS survivor annuity benefits.

But if the surviving spouse is entitled to his or her own Social Security benefits, then 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, unless the spouse is disabled (then it would start at age 50), or has a minor child (then it would start at any age). Once the spouse becomes entitled to Social Security survivor benefits, the CSRS survivor annuity is reduced, or offset, by the amount of the surviving spouse's Social Security benefit, attributable to the period the deceased was under CSRS-Offset. Consider this example:

Sam, a CSRS Offset employee, died suddenly at age 61 with 25 years of CSRS Offset service. His wife Helen is entitled to a CSRS survivor annuity of $35,000. Helen is age 60 is entitled to her own Social Security benefit of $10,000 of which $5,000 was earned while Sam was a CSRS Offset employee. Helen's survivor annuity will be reduced by $5,000 resulting in her receiving a survivor annuity of $30,000 and an annual Social Security benefit of $10,000.

An annuity to the surviving spouse of an employee begins on the day after the employee's death. The exception is the case of a surviving spouse whose entitlement to a survivor annuity depends on the birth of a posthumous child. In this case, the benefits begin on the day after the child is born. 

A survivor annuity to a widow or a widower ends on the last day of the month in which he or she: (1) dies; or (2) remarries prior to age 55. For remarriages occurring after January 1, 1995, if the widow or widower remarried before age 55 and was married for at least 30 years to the individual on whose service the survivor annuity is based, the survivor annuity will not be terminated.

A survivor annuity that ended because of remarriage before age 55 may be restored if: (1) the remarriage ends by death, divorce or annulment; and (2) the widow or widower pays back any lump sum benefit paid when the annuity ended.

Spousal Survivor Annuity Benefit - Death of an Annuitant

An annuitant is an individual who meets all requirements for retirement and has applied for retirement (either a regular or a disability retirement) and has separated from his or her agency employment rolls. But if a former employee did not file an application for an annuity or was not entitled to an annuity, then the individual is a separated employee - not an annuitant - and the rules below do not apply.

A spousal survivor annuity is payable to the spouse of a deceased annuitant only if the annuitant elected a reduced annuity to provide 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:

• The surviving spouse and the annuitant must have been married for at least nine months. The aggregate time of all marriages between the spouse and the annuitant is counted to determine the total length of the marriage; or
• A child was born of the marriage. For this purpose, a child includes: (1) a child born posthumously to the deceased annuitant and spouse; (2) a child born to the deceased annuitant and spouse before they were married; and (3) a child of a prior marriage between the deceased annuitant and spouse (an adopted child is not a child born of the marriage); or
• The death of the annuitant was accidental

A surviving spouse may receive only one CSRS survivor annuity based on the service of one employee. But a surviving spouse may receive more than one survivor annuity benefit based on the service of more than one employee; however, a surviving spouse may not receive survivor annuities based on the  service of more than one individual if any of the survivor annuities: (1)  was based on a marriage that occurred after the employee retired; or (2)  has been reinstated after the surviving spouse remarried before age 55. Consider the following three examples:

Example 1.

Allen and Joan were married for 10 years while Allen was a CSRS-covered employee. Allen died in service and Joan received a CSRS survivor annuity. When Joan became age 55, she married Carl who was a CSRS-covered employee at the time of their marriage. Two years later, Carl dies in service. Joan is entitled to both CSRS annuities.

Example 2.

Same facts as in Example1 except that Joan married Carl when she was age 50. Joan can receive only one of the two survivor annuities (her choice).

Example 3.

Same facts as in Example 1 except that both Allen and Carl were retirees rather than employees at the time of their marriages. Joan would have to choose one of the two survivor annuities

A court order awarding a former spouse a survivor annuity prevents OPM from paying the surviving spouse the portion of the annuity awarded by the court order. But the surviving spouse -if otherwise eligible - remains eligible for the complete survivor annuity if and when the former spouse loses eligibility.  

The maximum possible survivor annuity is 55 percent of the (employee) annuitant's before it is reduced by the cost of the survivor benefit, the unreduced annuity. The general formula for computing the cost of the survivor annuity under CSRS is:

2.5% of the first $3,600 of the annuity plus 10% of the remaining "base".

The "base" is something an annuitant would choose. If the annuitant chooses the maximum survivor benefit, the "base" is equal to the annuitant's annuity at the time of retirement. Consider this example:

Annuitant's annuity at the time of retirement = $60,000
Cost of survivor annuity = (2.5% of $3,600) + 10% of ($60,000 minus $3,600)
= $90 + $5,640 = $5,730

The annuitant receives $60,000 - $5,730 = $54,270

If the annuitant were to die during the first year and before the first COLA, then the surviving spouse receives:

55% of $60,000 = $33,000

If an annuitant were to live and receive the first COLA (in January following the year of retirement), then both CSRS annuity and survivor annuity is adjusted by the same COLA. For example, if the first COLA is 2%, then the annuitant will receive:

[$60,000 + (.02 x $60,000)] minus $5,730, or $61,200 minus $5,730 = $55,470

If the annuitant were to die during that year then the surviving spouse receives:

55% of [$60,000 = (.02 x $60,000)] or 55% of $61,200 = $33,660

Every COLA the annuitant receives will increase the survivor annuity by the same percentage. Upon death of the annuitant, the initial annuity paid to the survivor will include all previous COLAs that had been granted to the annuitant. The survivor annuity will also be increased by all future COLAs.

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. The amount of survivor annuity payable to the spouse of a deceased CSRS-Offset annuitant may be reduced if the spouse is eligible for Social Security survivor benefits. This is based on the deceased's federal service covered by Social Security. Consider these examples.

Example 1.

Steve, age 61, was a CSRS Offset employee and is retired. He is currently receiving a CSRS annuity of $70,000. At age 62, his $70,000 annuity will be reduced, or offset, by $10,000 which is the amount of Social Security retirement that he earned as a CSRS-Offset employee. His wife Pam does not have 40 credits of Social Security. If Steve were to die this year, Pam would receive 55 percent of $70,000 minus the Social Security offset of $10,000.

Example 2.

Same facts as Example 1, except that Pam paid into Social Security during her entire career and is entitled to Social Security benefits of $12,000 at age 62, or $16,000 at age 66. If Steve were to die, Pam would receive a full CSRS survivor annuity benefit equal to 55% of $70,000. Pam could elect to receive her Social Security benefits- with no offset - at any time after she is age 62. Note that Pam is not subject to either the Windfall Elimination Provision or the Government Pension Offset.

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. But survivor 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 offset of a CSRS survivor annuity stops on the date the survivor loses eligibility for Social Security benefits due to any of the following reasons:

1. the survivor becomes eligible for a Social Security benefit based on his or her earnings under Social Security and the benefit exceeds the survivor Social Security benefit:
2. the survivor remarries before age 60; to
3. the Social Security benefit stops because a minor child is reaches age 16 and the survivor is under age 60.

A CSRS survivor annuity payable to a surviving 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. This will be the case if remarriage is after Jan. 1, 1995. If the widow or widower remarries before age 55 and was married at least 30 years to the individual on whose service the survivor annuity is based, then the survivor annuity will not be terminated.

A survivor annuity that is terminated because of remarriage before age 55 may be restored if: (1) the remarriage is later terminated by death, annulment or divorce; and (2) if the spouse pays back any lump-sum benefit that was paid upon the termination of the annuity. Consider this example.

Barbara was 51 when her husband, William, a CSRS annuitant died. Barbara began receiving a survivor annuity. At age 54 she married Stanley and as a result her CSRS survivor annuity stopped. But when Stanley died when Barbara was age 60, she was then entitled to receive the survivor annuity based on William's federal service.

In applying for a survivor annuity, the surviving spouse must:

1. complete the application for death benefits (form SF 2800 which can be downloaded from OPM's Web site at www.opm.gov) and attach any other forms and/or evidence as the application or circumstances require;
2. attach a certified copy of the employee's death certificate; and
3. attach a certified copy of the employee's and spouse's marriage certificate. In the case of a deceased employee, the completed application should be sent to the deceased employee's employing agency. In the case of a deceased annuitant, the completed application should be sent to OPM's retirement office  in Boyars, PA. The address is:

Office of Personnel Management
PO Box 45
Boyars, PA 16017-0045

About the Author

Edward A. Zurndorfer is a Certified Financial Planner and Enrolled Agent in Silver Spring, Maryland. He is also a registered representative with Multi-Financial Securities Corporation (Branch A9X), member FINRA/SIPC, also located in Silver Spring, Maryland

Related Articles & Resources

·  CSRS: Survivor Benefits for Current Employees (Death-In-Service Benefits) ·  CSRS: Survivor Benefits Elections After Retirement ·  CSRS: Survivor Benefits Elections at Retirement