A Comprehensive Guide to Federal Employee Survivor and Death Benefits

In life, we often hope for the best but must prepare for the worst. The sudden death of a federal employee can be a devastating event, both emotionally and financially. To help you navigate this difficult situation, we’ve created a step-by-step guide to ensure that your loved ones are aware of the benefits available to them and the necessary actions to take in the event of your passing during service. In this article, we will explore four primary in-service death benefits for federal employees: the Basic Employee Death Benefit (BEDB), Survivor Annuity, Beneficiary Thrift Savings Plan (TSP), and Federal Employee Group Life Insurance (FEGLI) Death Benefits.

Basic Employee Death Benefit (BEDB)

The Basic Employee Death Benefit is a crucial but often misunderstood aspect of federal service. To qualify for BEDB, the federal employee must have served for at least 18 months. The surviving spouse must have been married to the deceased federal employee for at least 9 months (unless the death was accidental), or be the parent of a child born to the deceased employee.

If these qualifications are met, the BEDB payout is 50% of the employee’s final salary (or average salary if higher) plus an additional flat amount. This flat amount is calculated based on a fixed figure of $15,000 adjusted for inflation by the amount of CSRS COLAs every year since December 1, 1987. In 2023, this calculation amounts to $40,279.37.

For example, if the deceased federal employee held a GS 14 Step 1 position (base salary only), the BEDB would be 50% of $99,908 plus $40,279.37, totaling $90,233.37. It’s important to note that the BEDB may be payable to a former spouse with a qualifying court order.

Survivor Annuity

The survivor annuity is payable to the spouse of a deceased employee who had at least 10 years of creditable service, with 18 months of civilian service. The requirements for length of marriage or having offspring are similar to those of the BEDB.

Just like the BEDB, a survivor annuity may also be payable to a former spouse with a qualifying court order. In some instances, a surviving child may also claim a survivor annuity.

It’s worth noting that a survivor benefit must be paid for survivors to continue in the Federal Employees Health Benefits (FEHB) program, similar to the rules surrounding FEHB and retirement survivors.

Thrift Savings Plan (TSP)

In the event of an in-service death of a federal employee, the surviving spouse may receive the employee’s TSP balance based on the beneficiary designation made by the employee. Spousal beneficiaries can retain the balance in their TSP beneficiary participant account. To facilitate this, beneficiaries must be identified and located, and their personal information (Social Security numbers or Employer Identification Numbers for estates or trusts) must be verified.

This serves as a reminder to periodically check and update beneficiary designations for all federal benefits to ensure your loved ones receive the support they deserve.

Federal Employee Group Life Insurance (FEGLI)

FEGLI death benefits are tax-free to your beneficiary, making them an essential financial resource for your loved ones during a challenging time. Like with TSP, it’s crucial to keep beneficiary designations up to date.

Steps to Follow

Now that we’ve identified the possible benefits, it’s essential to outline the steps your survivor should follow in the event of your in-service death:

1. Notification: The first step is to notify the deceased employee’s agency, typically the HR department. The agency will then initiate payment of the employee’s final paycheck and lump sum annual leave to the designated beneficiary.

2. Complete and Submit Forms: Depending on whether the employee is under CSRS, CSRS Offset, or FERS, the beneficiary should complete and submit the appropriate forms. For CSRS or CSRS Offset, use SF2800 and SF2800A, while for FERS, use SF3104 and SF3104B 2800A. These forms can be downloaded from www.opm.gov/forms.

3. Provide Additional Documents: Along with the forms, the beneficiary will need to submit a certified copy of the employee’s death certificate and a marriage certificate (for widows or widowers). The death certificate should be sent to the deceased employee’s Human Resources Department or the designated Personnel office.

4. Consolidate Applications: If a widow or widower is claiming benefits for themselves and children, they should file a single application.

Additional Benefits

In addition to the major federal benefits, don’t forget about other programs that may come into play:

1. Federal Employees Dental and Vision Program (FEDVIP): If a survivor annuity is being paid, the survivor must reenroll in FEDVIP through the Benefeds website at www.benefeds.com.

2. Federal Long Term Care Insurance Partners (FLTCIP): If the survivor is enrolled in FLTCIP, they will need to visit the FLTCIP website (www.ltcfeds.com) to arrange payment from the survivor annuity or make direct payments if no annuity is payable.

Final Thoughts and Tips

Finally, it’s important to note that the Basic Employee Death Benefit is fully taxable. This means that your survivor should plan for potential impacts, including higher taxable income in the year received, potential effects on eligibility for financial aid (especially for college-age children), and the cost and eligibility for health benefits through insurance exchanges (if FEHB cannot be continued).

If your plan is for your survivor to roll the benefit into an IRA, be sure to prepare them for the process, as it can take a week or two, and the financial institution may require some explanation of the transaction.

In conclusion, while discussing these matters can be difficult, preparing your loved ones for the worst-case scenario is an act of love and responsibility. By sharing this guide with them, you can help ensure that they have the knowledge and tools to navigate the complex world of federal survivor and death benefits during a challenging time.