A FERS survivor annuity is supposed to provide continuing income to a spouse after a federal retiree dies. But if a previous divorce resulted in a court-ordered survivor benefit for a former spouse, your current spouse may receive less than you expect, or nothing, while the former spouse remains entitled to the maximum benefit.
For remarried federal employees, that’s a detail worth understanding before retirement.
Key Takeaways
- The maximum FERS survivor annuity is generally 50% of the retiree’s unreduced annuity.
- A divorce decree can award a former spouse all or part of that survivor benefit.
- A current spouse can still be elected for survivor protection even when a former spouse has the maximum award.
- If the former spouse has the full 50%, the current spouse’s regular survivor benefit generally has nothing left to draw from while that award remains active.
- The issue can also affect the current spouse’s ability to continue FEHB coverage after the retiree’s death.
The 50% Ceiling Matters
Under FERS, a full survivor annuity for a spouse is 50% of the retiree’s unreduced annuity. When both a current and former spouse are involved, the combined regular survivor benefits cannot exceed that maximum. That creates a serious situation for someone who has remarried.
Suppose a divorce decree awards a former spouse the maximum 50% survivor benefit. Years later, the federal employee remarries and elects a survivor benefit for the new spouse.
The current spouse can still be elected. But the existing court order has already used the entire regular survivor-benefit maximum.
In other words, the current spouse may have an election on record without having a regular survivor benefit actually payable while the former spouse remains entitled to the full award.
A Partial Award Changes the Math
Now suppose the former spouse was awarded only 25% instead of the full 50%.
The current spouse could potentially receive the remaining 25% if the retiree elects the maximum FERS survivor annuity for the current spouse. OPM specifically explains that the current spouse is eligible for whatever portion of the maximum isn’t already awarded to the former spouse.
That’s why the actual divorce decree matters.
A former spouse’s survivor benefit isn’t necessarily all or nothing. The court order can provide the maximum benefit, a lesser amount, or a fraction of the maximum.
What Happens If the Former Spouse Loses Eligibility?
This is also why making the current-spouse election can still matter even when nothing is currently payable.
OPM allows the current spouse to be covered on a contingent basis when a former spouse has the maximum court-ordered benefit. If the former spouse later loses eligibility, the current spouse can become entitled to the survivor benefit.
A former spouse’s survivor annuity can end because of the terms of the court order, the former spouse’s death, or remarriage before age 55 in most circumstances.
FEHB Can Be Affected, Too
This isn’t just about the pension.
If a former spouse’s court-ordered survivor benefit prevents a current spouse from receiving a regular FERS survivor annuity, the consequences can extend to FEHB. OPM specifically notes that a current spouse in this situation can lose eligibility to continue FEHB coverage after the retiree’s death.
That’s potentially a much bigger issue than simply receiving a smaller monthly pension.
What Remarried Federal Employees Should Check
If you’re remarried and your previous divorce involved your federal retirement benefits, don’t assume that electing a FERS survivor annuity for your current spouse means they’re fully protected.
Find the actual divorce decree and determine exactly what it awarded the former spouse.
Was it the full 50%? A partial benefit? Are there conditions that could eventually terminate the former spouse’s entitlement? Those details determine how much survivor protection is actually available to your current spouse.
The important question isn’t simply whether you elected a survivor benefit. It’s how much of that benefit your current spouse can actually receive.
If you’re remarried and have a prior divorce decree involving federal retirement benefits, a Federal Retirement Consultant (FRC®) can help you understand how the existing order could affect your current spouse’s retirement and survivor benefits.
