While no one wants to think of their own death, keeping your designation of beneficiaries up-to-date is a critical -- but often overlooked -- part of financial planning to avoid costly surprises down the road.

Two important types of designations of beneficiary of concern for federal employees and retirees are:

1.  designations for life insurance benefits under the Federal Employees Group Life Insurance Program (FEGLI), and

2.  designations for any lump sum benefit payable upon your death from your CSRS/FERS annuity.

Designations for Lump Sum Benefit Payable Upon Your Death (CSRS/FERS Annuity)

You can choose any person to receive any lump sum benefit payable upon your death by completing a Designation of Beneficiary form. Lump sum death payments include:

• Any amount by which your contributions to the retirement fund (CSRS/FERS), plus any interest due, exceed the total amount of the annuity the Office of Personnel Management (OPM) paid you and all other eligible survivors (unexpended balance), or

• Any annuity OPM owes you at the time of your death.

OPM pays an unexpended balance only after there is no longer a survivor entitled to a monthly payment.

If You Do Not Have Designation of Beneficiary on File

If you do not have a designation of beneficiary on file, OPM will pay the first person(s) listed below who is alive on the date the payment becomes due:

• Your widow or widower,

• Your child or children (descendants of a deceased child may qualify),

• Your parents in equal shares or all to the surviving parent,

• The administrator or executor of your estate, or

• If none of the above, your next of kin as determined under the laws of the state in which you live.

If you are satisfied with the payment order shown above, there is no need for you to have a Designation of Beneficiary.

Keep Your Designation of Beneficiary up to Date

Remember that unless you change or cancel your designation, the person named-such as a former spouse-will receive the lump sum benefit.

You also need to keep your designated beneficiaries' addresses current.   Failure to do so may mean that your beneficiary cannot be located and therefore benefits will not be paid to that person.  The preferred way is to file a new Designation of Beneficiary form when a beneficiary's address changes.  A new address cannot be added directly to the Designation of Beneficiary form itself, since any cross outs, erasures, or alterations in your form may make it invalid.

Designation of Beneficiary Forms

For Life Insurance Benefits

Use SF 2823, Designation of Beneficiary/Federal Employees Group Life Insurance at:
http://www.opm.gov/forms/pdf_fill/sf2823.pdf

For Lump Sum at Death (CSRS/FERS annuity)

If you are under FERS, use SF 3102, Designation of Beneficiary/FERS at:
http://www.opm.gov/forms/pdf_fill/SF3102.pdf

If you are under CSRS, use SF 2808, Designation of Beneficiary/CSRS at: http://www.opm.gov/forms/pdf_fill/SF2808.pdf

After you complete and return the designation form in duplicate to OPM, they will certify it and return the duplicate copy to you.