This type of annuity provides unreduced payments during the life of the retiree. There is no survivor annuity payable to anyone.
This type of annuity provides a retiring employee with reduced annuity payments and, upon the retiree’s death, provides the current and/or former spouse(s) with survivor annuity payments. An annuity with full survivor benefits to the current spouse is automatic for a retiring employee who is married at retirement unless the current spouse consents to a different election.
To be eligible for a survivor annuity after the death of a retiree, the current spouse must have been married to the retiree for at least 9 months or be the parent of the retiree’s child. This requirement does not apply if the retiree’s death is accidental.
To elect a survivor annuity for a former spouse, the retiring employee must have been married to the former spouse for at least 9 months.
The combined total of survivor annuity(ies) that can be provided to a current spouse and/or former spouse(s) cannot exceed 50 percent of the retiring employee’s unreduced annuity.
The reduction in the retiring employee’s annuity is 10 percent if the retiring employee chooses a full survivor annuity of 50 percent. The reduction is 5 percent if the retiring employee chooses a partial survivor annuity of 25 percent.
The survivor annuity(ies) commences on the day after the death of the retiree and ends on the last day of the month before the current or former spouses marries before age 55 or dies.
OPM must honor a court order/divorce decree that gives (awards or requires a retiring employee to provide) a survivor annuity to a former spouse. A court–ordered former spouse annuity takes precedence over an election to provide a survivor annuity to a current spouse. A retiring employee’s annuity will be automatically reduced by OPM to provide a court–ordered former spouse annuity. Court orders are sent to:
COURT ORDER BENEFITS SECTION
OFFICE OF PERSONNEL MANAGEMENT
PO BOX 17
WASHINGTON DC 20044–0001
If a former spouse is entitled to a court–ordered survivor annuity, the retiring employee must make an election concerning a survivor annuity for the current spouse as if there were no court–ordered former spouse annuity.
A retiring employee can protect a current spouse’s entitlement to a survivor annuity by electing a full or partial survivor annuity for the current spouse at retirement. This is accomplished when:
- The court order gives the former spouse the maximum survivor annuity, in which case the current spouse would not be entitled to a survivor annuity until the former spouse loses entitlement because of remarriage before age 55 or death; or
- The court order gives the former spouse less than the maximum survivor annuity; in which case the current spouse would be entitled to a partial survivor annuity up to the amount elected, but not exceeding the difference between the court–ordered survivor annuity and 50 percent of the retiring employee’s unreduced annuity. If the former spouse loses entitlement (because of remarriage before age 55 or death), the current spouse’s annuity would be increased, if necessary, to the amount elected.
This type of annuity provides payments at a reduced rate during the life of the retiring employee. Upon the retiree’s death, it provides a survivor annuity payable to the person designated. The person designated must have an insurable interest in the retiring employee. To have an insurable interest, the person must reasonably expect to derive financial benefit from the continued life of the retiring employee.
A retiring employee who is in good health and who is applying for a nondisability retirement may elect an insurable interest annuity. The retiring employee must submit proof of good health in a form prescribed by OPM.
An insurable interest is presumed to exist with:
- The current spouse;
- A blood or adopted relative closer than first cousins;
- A former spouse;
- A person to whom the employee is engaged to be married;
- A person with whom the employee is living in a relationship that would constitute a common-law marriage in jurisdictions recognizing common-law marriage.
When an insurable interest is not presumed, the employee must submit affidavits from one or more persons with personal knowledge of the named beneficiary’s having an insurable interest in the employee.
A retiring employee’s annuity is reduced by 10 percent plus an additional 5 percent for each 5 years the person designated is younger than the retiring employee. The maximum reduction is 40 percent except when the retiring employee has a reduced annuity for a former spouse and an insurable interest for the current spouse. In this case the combined reduction may exceed the maximum 40 percent.
The amount of the annuity payable is 55 percent of the retiree’s annuity after the insurable interest reduction.
Married employees who elect less than a full survivor annuity for their current spouse must obtain their current spouse’s consent on SF 3107–2, Spouse’s Consent to Survivor Election. The current spouse’s consent is required even if a former spouse will be awarded a survivor annuity by a court order. A waiver of the spousal consent requirement may be granted by OPM under certain conditions (e.g., whereabouts of the current spouse cannot be determined or there are exceptional circumstances regarding the current spouse which warrant such a waiver).
Regardless of the type of annuity elected at retirement, a surviving child of the deceased retiree who (a) is under the age of 18 and is single and dependent on the retiree, (b) is over age 18 and is incapable of self–support because of a mental or physical disability incurred before age 18, or (c) is a full–time student under the age of 22 is entitled by law to a survivor annuity.
The type of annuity desired by the retiring employee is indicated on the application for retirement (SF 3701) at the time of retirement.
Retirees who are married at retirement have 18 months from the time of retirement to change their decision not to provide a survivor annuity or to elect a higher survivor annuity. In either case, a deposit will be required for such an election. The deposit consists of the sum of the monthly differences between the annuity paid to the retiree and the annuity that would have been in effect since the time of retirement, plus a fee of 24.5 percent of the retiree’s annual annuity if changing from no survivor annuity to full survivor annuity; or 12.25 percent if changing from either partial to full or none to partial survivor annuity.
If an employee who is married at the time of retirement elects a survivor benefit for the current spouse and the marriage is terminated before the retiree dies, the reduction in annuity is eliminated unless the retiree elects to continue it or a qualifying court order requires the retiree to provide a former spouse annuity.
A retiree who was married at the time of retirement may elect, within 2 years after a postretirement marriage, a reduced annuity to provide a current spouse annuity. A retiree making an election under this section must deposit an amount equal to the difference between the amount of the annuity actually paid to the retiree and the amount of annuity that would have been paid if the reduction elected had been in effect continuously since the time of retirement, plus 6 percent annual interest.
The following provisions apply:
- Change From Unreduced Annuity. A retiree who was unmarried at the time of retirement may elect, within 2 years after a post retirement marriage, a reduced annuity to provide a current spouse annuity. A retiree who makes such an election must deposit an amount equal to the difference between the amount of the annuity actually paid to the retiree and the amount of annuity that would have been paid if a survivor benefit had been in effect continuously since the time of retirement plus 6 percent annual interest.
- Change From Person Having Insurable Interest. An election of a reduced annuity with survivor benefits to a designated person having an insurable interest may be changed to a reduced annuity with survivor benefits to the current spouse if the employee marries that person after retirement. This election must be made within 2 years of the post retirement marriage and may be made without deposit.
