How to make sure survivor benefits are payable under FERS or CSRS

This article highlights key issues regarding ensuring a former spouse of a federal employee is guaranteed survivor benefits.

If the employee predeceases the former spouse, in almost all states the former spouse’s marital or community property interest should include any survivor benefits payable by the Federal Employees Retirement System or the Civil Service Retirement System (“FERS/CSRS”) if available. The survivor annuity under FERS/CSRS for a former spouse is called the “Former Spouse Survivor Annuity” (“FSSA”). The maximum survivor annuity payable is 55% of the employee’s monthly benefit for CSRS and 50% of the employee’s monthly benefit for FERS. The FERS/CSRS domestic relations order is called a Court Order Acceptable for Processing or COAP (generically referred to as a “QDRO”) which is administered by the Office of Personnel Management (“OPM”).

First Order Rule

To make sure a former spouse will receive the FSSA, the first court order dividing property (usually the divorce judgment) must award the FSSA. Once the divorce judgment is filed, it may NOT be possible to award the FSSA in the event of employee’s death or retirement if the FSSA is not specifically awarded in the first court order dividing the marital property pursuant to the “First Order Rule.” 5 CFR 838.806. Failure to include a specific award for survivor benefits in the divorce judgment may result in loss of those survivor benefits to the former spouse.

CFR 838.806(a) says that a court order awarding survivor benefits is not acceptable if it is issued after the date of retirement and modifies the "first order dividing the marital property of the employee or retiree and the former spouse." The primary exception to the First Order Rule occurs when a QDRO filed subsequent to divorce awarding the FSSA is approved as acceptable for processing by FERS/CSRS before the earlier of employee’s death or retirement. If the participant dies or retires without a QDRO awarding the FSSA, then the FSSA is NOT an available option for a former spouse in almost all cases.

The other option around the First Order Rule is if the QDRO orders that when the employee retires, the employee must elect to provide the FSSA and the employee completes and files OPM form RI20-064A (and any other applicable form) with the OPM no later than 2 years from the date of divorce.

Remarriage by Former Spouse

The other common issue the results in a loss of the FSSA is if the former spouse remarried. Unless a former spouse is married more than 30 years, the former spouse will not be eligible for survivor benefits if the former spouse remarries before reaching age 55. (5 U.S.C. §8445(c); 5 CFR §§843.304-843-305).

The Bottom Line is If the former spouse is awarded the Former Spouse Survivor Annuity (“FSSA”), make sure that OPM confirms that the FSSA award is secured. QDROCounsel is NOT involved with ensuring FSSA coverage. If it is possible to award FSSA coverage to the former spouse, then QDROCounsel will include the FSSA award in the QDRO unless directed otherwise. The former spouse may need to deal directly with OPM or obtain counsel for representation to resolve any issues.

There is no perfect way to allocate FERS/CSRS retirement benefits. Federal law under FERS/CSRS preempts state marital property law. There may be remedies available to provide for a lost survivor benefit for the former spouse but that would be in state court between the parties.

The best scenario is to contact QDROCounsel for divorce judgment language which will protect both parties including survivor benefits and to file the QDRO concurrent with the divorce judgment filing or soon thereafter!

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