Both FERS and CSRS systems provide the opportunity to purchase survivor benefits for spouses and dependent children of employees and retirees - but it comes at a cost.  A Surviving Spouse who had been participating in the Federal Employees’ Health Benefits Program (FEHBP) through marriage to a CSRS or FERS employee may only continue to participate if they receive (at least) the minimum Surviving Spouse Benefit allowed.  The federal government pays compensation to dependent survivors of federal civilian employees who are killed while performing their duties; however, a survivor eligible for both an annuity under CSRS or FERS and for survivor compensation cannot receive both. 

One key point to consider in the election of a survivor annuity for your spouse is the cost. If you elect a full survivor's annuity under CSRS your spouse will receive 55% of your annuity when you die. For FERS employees they can elect to provide their spouse with an annuity of either 25% or 50% of the total retirement annuity upon the death of the annuitant. The cost for this continued benefit is just under 10% of your retirement annuity for CSRS retirees and either 5% or 10% for FERS retirees (respectively providing 25% or 50% of the FERS retirement annuity).

 

Another key aspect of the SSB to consider is the inflexibility of the survivor annuity payments provided.  If the retiree elects to provide a Surviving Spouse Benefit but outlives their spouse, 100% of the money contributed is lost.  There is no refund.  If the retiree and spouse pass away siumultaneously, then again 100% of the money contributed to providing the SSB is lost.  It does not continue to next of kin.  It is a Surviving Spouse (ONLY) Benefit.  Finally, if the surviving spouse needs the proceeds as a lump sum or does not have a long life expectancy when payments begin, there are no alternative payment methods available.  It is only going to provide a monthly income, regardless of whether the spouse lives to receive back the full amount contributed by the retiree or not.