Your Guide to Federal Employee Survivor Benefits
Federal employees have a whole raft of benefits that touch on everything from retirement savings and pensions to health, life and long term care insurance. But what happens to those benefits when you die? No one likes to think about death, but it’s crucial that you know how your benefits will be distributed to your surviving spouse or children. If you plan carefully, you can leave loved ones a gift of lasting security.
Here’s what federal employees need to know about survivor benefits for spouses and children.
Thrift Savings Plan
The Thrift Savings Plan (TSP) is a defined contribution retirement account for federal employees. It has the same basic tax advantages as a 401(k) in the private sector, and you also receive matching funds from your agency while you are working.
When you die, your TSP will be distributed according to your beneficiary designation on file, which makes it essential to keep your beneficiary information current. You can update your TSP beneficiary at any time directly through your My Account at TSP.gov. Your most recent designation automatically replaces all prior ones, and it must be received by the TSP before your date of death to be valid.
If your spouse is the designated beneficiary, they can transfer the account into a TSP Beneficiary Participant Account—allowing the funds to remain in the TSP—or roll the balance into their own IRA. Spouses are the only individuals permitted to keep funds inside the TSP after the participant’s death. Any other beneficiaries, such as children or grandchildren, cannot maintain a TSP account and must either transfer the funds into an Inherited IRA or take a distribution. These beneficiaries are also subject to SECURE Act rules, which require adult children to fully withdraw the inherited IRA within 10 years; for minor children, the 10-year clock begins when they turn 18.
If no beneficiary is named, TSP distributes funds according to the federal order of precedence: first to your spouse, then to your children, followed by your parents, your estate’s executor, and finally your next of kin.
FERS Survivor Benefits
The Federal Employees Retirement System (FERS) provides survivor benefits through three main components. These depend on your service time, marital status, and whether you die while employed or after retirement.
Basic Death Benefit
When a FERS employee dies, the surviving spouse may qualify for the Basic Employee Death Benefit, which includes:
- 50% of the employee’s final basic salary or high-3 (whichever is higher)
- Plus a fixed lump sum of $42,607.52 for deaths occurring on or after December 1, 2024
(This amount is adjusted annually for inflation.)
To be eligible, you must have 18 months of creditable service, and your surviving spouse must have been married to you for at least nine months OR be the parent of a child born during your marriage (even if the child is born after your death). If your death is the result of an accident, these requirements are waived.
Survivor Annuity
Provided the surviving spouse meets the eligibility requirements above AND the deceased federal employee had 10 years of creditable service, they are also eligible for an annual benefit based on the deceased’s pension schedule. This benefit is 50% of the federal employee’s annual pension, with no reduction for age made if they died before retiring. This amount is adjusted for inflation each year.
The survivor annuity may also be paid out to children of the deceased, as long as the federal employee had 18 months of creditable service. Eligible children must meet the following criteria:
- They are unmarried
- They are claimed as dependents
- They are under age 18, or under age 22 if attending college full time
The age requirement is waived for unmarried, disabled dependents, provided the certified disability occurred before the age of 18.
Note that children’s benefits are reduced by the amount of Social Security survivor’s benefits they are entitled to. In many cases, this cancels out the FERS benefit.
Lump-Sum Benefit
If a federal employee dies and no one is eligible for a survivor annuity based on the factors listed above, survivors are entitled to a refund of all the money that was contributed to FERS during the deceased’s service, plus interest.
If this occurs, the lump-sum is paid to the designated beneficiary. If there is no designated beneficiary, the money is paid first to the surviving spouse, and then to children if there is no surviving spouse.
FEGLI Benefits
Federal Employee Group Life Insurance is an additional benefit that provides life insurance to federal employees. These benefits are designed to be paid out when you die, so the survivor benefits are much more straightforward. All funds are distributed to your designated beneficiary upon your death.
If there is no named beneficiary, FEGLI pays benefits according to the standard order of precedence.
FEHB Benefits
The Federal Employees Health Benefits program is the health insurance plan for federal employees and their families. When a federal employee dies, surviving family members covered under a Self and Family or Self Plus One FEHB plan may continue their health coverage if they are eligible for a FERS survivor annuity.
This means:
- A surviving spouse must qualify for a FERS monthly survivor annuity to continue FEHB
- Children covered under the plan may also continue coverage
If you had Self Only coverage, your survivors are not eligible for FEHB continuation, although they may qualify for Temporary Continuation of Coverage (TCC) for 18 months at full cost.
Social Security
The Social Security Administration also provides survivor benefits to spouses and children based on your work history and earnings. It’s easy to overlook Social Security when considering all your other federal benefits, but it plays an important role in supporting your family after your passing.
A surviving spouse may begin receiving reduced benefits as early as age 60, or full benefits once they reach their full retirement age. If the surviving spouse is caring for your child under the age of 16, they may receive survivor benefits at any age. They also have the option to switch to their own Social Security retirement benefit later if it becomes higher.
Children may also qualify for survivor benefits if they are under age 18, under age 19 and still enrolled in high school full time, or if they became disabled before age 22. These Social Security payments may offset or eliminate FERS children’s survivor benefits due to coordination rules between the programs.
How to Get Help
Thinking about death is difficult, but planning ahead is one of the most meaningful ways to care for your family. If you’re a federal employee and have questions about your benefits, please reach out. We can help you understand your survivor benefit options and make confident decisions that fit your financial situation.
If you are a surviving spouse of a federal employee, we’re here for you as well. If you need help navigating the federal benefits system or understanding what you may be entitled to, get in touch today. You don’t have to work through these decisions alone.