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FEDERAL EMPLOYEES RETIREMENT SYSTEM (FERS)

FORM AND COST OF THE FORMER SPOUSE SURVIVOR ANNUITY

PART TWO

Clarification and Explanation.

A Former Spouse Survivor Annuity (FSSA) has many variations. The size of the FSSA ranges from:

  • As large as 50% of the Basic Annuity
  • As small as $1.00 per month

Basic Annuity Defined.

Average of Highest Three Years Pay Multiplied by Years of Service (YOS) Multiplied by 1% (less than 20 YOS) or 1.1% (more than 20 YOS).

Alert:

The sole focus of this article is the Former Spouse Survivor Annuity (FSSA). It is again emphasized that the FSSA is very different entity from a "Spousal Survivor Annuity" (payable to a spouse).

When Is A FSSA Payable?

  • Upon the Death of an Active Employee who at the time of death had not less than ten years of FERS credited service.
  • Upon the death of a FERS Retiree.

Caution.

No FSSA is available to the Former Spouse of a FERS employee if at the time of the employee's death she or he had less than ten years of service. For this Article it is presumed that the FERS employee had more than ten years of credited federal service.

Negotiation Issue.

WHO PAYS THE COST OF A FORMER SPOUSE SURVIVOR ANNUITY?

Clarification of the term "cost".

The cost of the FSSA is not expressed as a dollar amount to be paid for this benefit. Rather the cost of the FSSA is expressed as a reduction of the retiree's Basic Annuity.

Please Notice.

This cost is expressed by a reduction of the employee's "Basic Annuity" and is explained below. [1]

Caveat.

The informed attorney is aware of 5 C.F.R. 838.807(c), which provides:

Unless the court order otherwise directs, OPM will collect the annuity reduction required by section 8339(j)(4) or section 8419 of title, 5, United States Code, from the employee annuity.

The above citation is the OPM default position. However, the following alternative payment options are available provided it is clearly delineated in the Marital Settlement Agreement and inserted into the ensuing COAP.

FSSA Cost Allocation Options:

# 1. Full cost allocated to Retiree

# 2. Full cost allocated to Former Spouse

# 3. Proportionate Allocation of Cost

# 4. Stated percentage to each spouse

Other than the nescient attorney representing the employee/retiree, Option #1 will be rejected. The informed attorney representing the employee/retiree will argue that the burden should follow the benefit. Since the full benefit of the FSSA inures to the Former Spouse, this spouse should assume the full cost.

The informed attorney representing the employee/retiree will also reject option #3. When a "Boyett" formula award to the Former Spouse is a part of the settlement, the employee/retiree receives the greater percentage of the benefit. [2] To allocate proportionately or "equally" is to transfer the greater cost burden to the employee/retiree.

Summary.

When Boyett is followed the Florida attorney representing the employee/retiree will argue for Option # 2 or Option # 4. Alternatively, the Florida attorney representing Former Spouse will press for Option # 1 or Option # 3.



[1] The monthly retirement benefit paid to a FERS retiree.

[2] Math not shown. If the total years of marriage are less that total years of service, the percent awarded to the FS will be less than 50%. Thus, the greater share of the benefit inures to the retiree. If the cost allocation is proportionate, the retiree bears the greater portion of the cost. If you remain unclear contact Troyan.