FAQs: SBP

CSRS employees
Should a CSRS employee die while still working, the spouse receives a survivor benefit equal to 55% of the highest pension the employee would have qualified for had they retired on a CSRS disability retirement.

FERS employees
Should a FERS employee die while still working, the spouse would receive the following benefits based on the number of years of service the employee had at the time of their death:

With less than 10 years of service:

• A lump-sum payment of $33,071 (for 2018),
• A lump-sum payment of the greater of:
      - 50% of the employee’s current annual salary,
      - 50% of the employee’s current High-3, and
      - Any Social Security benefits payable

With 10 or more years of service:

• All of the benefits mentioned above, plus
• A survivor benefit of 50% of the employee’s pension had it been calculated on the day of their death (regardless if they were technically eligible to retire or not)

Survivor benefits are automatic for married employees and there is no election to be made.

If your spouse dies before you, there is no refund of premiums paid for the Survivor Benefit Plan.  However, premiums will stop from that point forward. You should notify OPM upon the death of your spouse.

OPM allows for limited changes to your SBP election based on how long it has been since your pension was finalized.

Within 30 days, you may file a new election for the coverage you wish

Between 31 days - 18 months, you can change your election only in the following ways:

• You may elect a survivor annuity, or
• You can increase a reduced survivor annuity amount

Beyond 18 months, no changes may be made outside of a marriage or divorce

Yes.  The cost of the Survivor Benefit Plan is a fixed percentage of the pension. Therefore, when the pension goes up based on the Cost of Living Adjustments each year, the dollar amount of the Survivor Benefit Plan goes up.

Premiums are paid with pre-tax money (meaning money you have not paid tax on yet).  

Yes.  Just like YOUR monthly pension payments were taxable when you received them while living, the monthly survivor benefit that YOUR SPOUSE receives after your death are taxable, too.

Yes.  The “insurable interest” option allows you to name someone other than your spouse to receive a portion of your pension.  It is important to know that the benefit this person can receive is different than what they would receive had they been a spouse.

You may name someone who is related to you, closer than a first cousin, and would reasonably expect to receive financial benefit from your continued life.

You are only permitted to make an insurable interest election in retirement (not while working).

The benefit payable to an insurable interest would be 55% of the CSRS/FERS pension after it has been decreased by the cost of the benefit.

In summary, the insurable interest option provides a lower monthly benefit than the spousal benefit would have provided, and it costs more to provide it.  In fact, it can cost significantly more depending on the age difference between the retiree and the person they named as an insurable interest.

The insurable interest survivor benefit election ends upon the death of the person you named.  You are not permitted to name anyone else to take their place.

No.  The Children's Survivor Benefit program has nothing to do with the pension you receive.  It is a fixed dollar amount.  If you wish to name your children to receive a portion of your pension upon your death, you would be required to name them as an "insurable interest" and you must qualify (based on your health) for coverage.

Children receive survivor benefits at no cost if they meet the following requirements:

• unmarried, dependent child
• under age 18, or 22 if full-time student
• beyond age 22 if disabled prior to age 18

Children receive the same survivor benefits regardless if the federal parent is still employed or retired, or if the parent is under CSRS or FERS

If one living parent (who is married to the deceased), the benefit is:

• $523 per month (up to 3 children), or
• $1,569 per month (more than 3 children)

If no living parent (or a living parent never married to the deceased), the benefit is:

• $626 per month (up to 3 children), or
• $1,878 per month (more than 3 children)

Children will be eligible to continue to receive benefits for as long they meet the following requirements:

• unmarried, dependent child
• under age 18, or 22 if full-time student
• beyond age 22 if disabled prior to age 18

If they were disabled prior to the age of 18, your disabled child would be entitled to this benefit for the duration of their lifetime.

Yes.  Benefits under the Children's Survivor Benefit plan are coordinated with Social Security (offset $1 for $1).  Chances are, the Social Security benefits your child would be entitled to will be higher than those under the Children's Survivor Benefit.  

Yes.  There is a maximum amount of the pension that can be protected under the Survivor Benefit Plan.  If your former spouse was awarded the entire benefit by court order, your current spouse will not receive a benefit upon your death unless your former spouse loses eligibility.

Yes.  If your former spouse loses eligibility for the Survivor Benefit (by death or remarriage prior to age 55), your current spouse can receive your Survivor Benefit.

Yes.  Technically, your current spouse is entitled to a survivor benefit, but they can't receive it (because your former spouse was awarded the entire benefit by court order).  Your spouse is permitted to keep FEHB in this scenario.

You should check your court order for language about the Survivor Benefit Plan. The court order must explicitly state your former spouse's entitlement to the benefit and clearly define how much of the benefit is awarded.  If no language exists, OPM will not be able to issue payments.

In order for your spouse to be eligible to continue coverage under FEHB after you die, they must be considered a "survivor annuitant".  This means that they are receiving a portion of your pension upon your death.

For CSRS retirees, the minimum amount of your pension that may be protected is 55% of $22.  You will make this election when you apply to retire.

For FERS retirees, the minimum amount of your pension that may be protected is 25% of the pension.  You will make this election when you apply to retire.

If a retiree marries after retiring, they may still provide a survivor benefit to their spouse, but they will pay two premiums for SBP coverage:

• the normal premium from that point forward
• the back premium (with interest) from the time they retired to the time they married (as if coverage existed for the entire period); this is calculated as an actuarial reduction to the pension and continues even if new marriage ends

Yes.  Of course, assuming you and your spouse were enrolled in FEHB at the time of your death.