Information for FERS Annuitants

Changing Your Retirement to Disability

Changing Your Retirement to Disability Retirement
You can submit an application for disability retirement within one year after your separation from employment provided you did not elect the alternative form of annuity with a lump sum payment equal to your retirement contributions (See Section II). You and your former employing agency must submit evidence that shows you became disabled while employed in a position subject to Federal Employees' Retirement System (FERS) coverage, and you and your agency must provide evidence that you were unable to perform useful and efficient service because of disease or injury in the position you retired from. Your former agency will also have to certify that it could not reasonably accommodate your condition. Moreover, you must not have declined an offer of reassignment to a vacant position in the commuting area at the same grade or pay level and tenure.

The 1-year filing limit can only be waived if you were mentally incompetent at the time of separation or became so within one year thereafter. In such a situation, the application for disability retirement may be filed within one year from the date you are restored to competency or a guardian is appointed, whichever is earlier.

If you change to disability retirement, you will lose your special retirement supplement. This supplement is not paid to individuals who retire on disability.

Tax Liability
You should contact the Internal Revenue Service (IRS) regarding the impact of disability retirement on your Federal income tax liability. The IRS defines disability differently than the Office of Personnel Management (OPM) does and will make its own determination as to whether you qualify under their regulations.

Changing Your Survivor Election After Retirement

Changing the Survivor Election for Your Spouse at Retirement

• If it is within 30 days of your first regular annuity payment -
  You may change your election if, not later than 30 days after the date of your first regular monthly payment, you file a new election in writing. You should write to:
  
  U. S. Office of Personnel Management
  Federal Employees' Retirement System
  Retirement Operations Center
  Boyers, PA 16017-0001.
  
  Your first regular monthly payment is the first annuity check payable on a recurring basis (other than an estimated payment or an adjustment check) after the Office of Personnel Management (OPM) has computed the regular rate of annuity payable under the Federal Employees' Retirement System (FERS) and has paid the first regular annuity amount.
  
  If you change your election to anything less than the maximum survivor benefit, you must get your spouse's consent to the election, or request that OPM waive the spousal consent requirement.
  
  When the 30-day period following the date of your first regular monthly payment has passed, you can only change your election under the circumstances explained in the following paragraphs.
  
  
• If it is more than 30 days from the date of your first regular monthly payment, but less than 18-months from the beginning date of your annuity -
  If you are married at retirement, you may change your decision not to provide a survivor annuity, or you may increase the survivor annuity amount. You must request the change in writing no later than 18 months after the beginning date of your annuity.
  
  In addition, you must pay (1) a deposit representing the difference between the reduction for the new survivor election and the original survivor election, plus (2) a percentage of your annual annuity. This percentage is 24.5% of your annual annuity (at retirement) if you are changing from no survivor benefit to a full survivor benefit, and 12.25% if you are changing from none to a partial benefit or from a partial benefit to a full benefit. Interest on the deposit must also be paid.

Electing Survivor Benefits for a Spouse Acquired After Retirement
If you get married after retirement, you can elect a reduced annuity to provide a survivor annuity for your spouse, if you contact the Office of Personnel Management (OPM) to request the benefit within two years of the date of the marriage. You may elect either a full survivor annuity (50% of your unreduced annuity) or a partial survivor annuity (25% of your unreduced annuity). If you remarry the same person you were married to at retirement and that person consented to either no survivor annuity or a partial survivor annuity, you cannot elect a survivor annuity greater than the amount provided in your original election.

There will be two reductions in your annuity if you elect to provide the survivor benefit. One will be the reduction to provide the survivor benefit. The amount of the reduction depends on whether you have elected to provide a full survivor annuity (10% reduction) or a partial survivor annuity (5% reduction). The reduction to provide the survivor benefit will be eliminated if your marriage ends.

The other reduction in your annuity is a permanent actuarial reduction to pay the survivor benefit deposit. The deposit equals the difference between the new annuity rate and the annuity paid to you for each month since retirement, plus 6% interest. The reduction is determined by dividing the amount of the deposit by an actuarial factor for your age on the date your annuity is reduced to provide the survivor benefit. The actuarial reduction will not be eliminated from your annuity if your marriage ends.

Electing Survivor Benefits for a Former Spouse if Your Marriage Terminates After Retirement
If your marriage terminates after retirement, you can elect a reduced annuity to provide a survivor annuity for your former spouse, if you contact the Office of Personnel Management (OPM) to request the benefit within two years of the date of the termination of the marriage. You may elect either a full survivor annuity (50% of your unreduced annuity) or a partial survivor annuity (25% of your unreduced annuity). However, if you were married to that individual at retirement and they consented to either no survivor annuity or a partial survivor annuity, you cannot elect a survivor annuity greater than the amount provided in your original election. In addition, a former spouse who remarries before reaching age 55 is not eligible for a former spouse survivor annuity.

The same reductions are applied as those for a spouse acquired after retirement.

Changing an Insurable Interest Annuity Election for a Current Spouse to a Regular Survivor Annuity Election

If a former spouse's court-ordered survivor annuity will prevent your current spouse from receiving a survivor annuity that is sufficient to meet his or her anticipated needs, you may have elected an insurable interest annuity for your current spouse at retirement. If the former spouse later loses entitlement to the court-ordered survivor annuity, you can request that the reduction in your annuity to provide the insurable interest annuity be converted to the regular survivor annuity reduction. Your current spouse would then be entitled to the regular survivor annuity.

Termination of the Reduction in Your Annuity to Provide a Survivor Benefit

• Current Spouse The reduction in your annuity to provide a survivor annuity for your current spouse stops if your marriage ends because of death, divorce, or annulment.
  
  
• Former Spouse The reduction in your annuity to provide a survivor annuity for a former spouse stops if the former spouse dies, if the former spouse remarries before reaching age 55, or under the terms of the court order that required you to provide the survivor annuity for the former spouse when you retired. (Modifications to the court order issued after you retire do not affect the former spouse survivor annuity.)
  
  
• Insurable Interest The reduction in your annuity to provide an insurable interest annuity stops if the person you name to receive the insurable interest annuity dies or if the person you name is your current spouse and you change your election because a former spouse has lost entitlement to a survivor annuity. The reduction also ends if, after you retire, you marry the insurable interest beneficiary and elect to provide a spousal survivor annuity for that person. If you marry someone other than the insurable interest beneficiary after you retire and elect to provide a survivor annuity for your spouse, you may elect to cancel the insurable interest reduction at that time.

Entitlement to Other Benefits/Effect on Federal Employees' Retirement System (FERS) Annuity

Social Security Benefits

Entitled to Benefits From the Social Security Administration
If you are eligible for both a FERS annuity and social security benefits and have not retired on a FERS disability annuity, you can receive both benefits at the same time. However, you may be subject to a reduction in the amount of your Social Security Benefits. You should contact the Social Security Administration for information regarding any reduction in your benefit.

If you are a disability annuitant under FERS, you are under age 62, and your annuity benefits were computed using either 60% or 40% of your "high-3" average salary, the Office of Personnel Management (OPM) will reduce your monthly annuity by all or a portion of your Social Security benefits. While you are receiving an annuity computed using the 60% computation, OPM must reduce your monthly annuity by 100% of any Social Security disability benefit to which you are entitled. While you are receiving an annuity computed using the 40% computation, your monthly annuity will be reduced by 60% of any Social Security disability benefit to which you are entitled. This reduction only applies for months in which you are concurrently entitled to both FERS and Social Security benefits.

Notifying the Office of Personnel Management (OPM) of Receipt of Social Security Benefits if you are Receiving a Federal Employees' Retirement System (FERS) Disability Annuity
If you are receiving FERS disability benefits and the Social Security Administration awards you monthly benefits, you must notify OPM of the amount of the monthly Social Security benefit and the effective date of the payment immediately upon becoming eligible. It is your responsibility to minimize any period of overpayment by promptly notifying the Office of Personnel Management (OPM). You should forward to OPM a copy of the award notice or a statement from the Social Security Administration showing the monthly amount and effective date of your Social Security benefit. This information should be forwarded to:

U. S. Office of Personnel Management
Federal Employees' Retirement System
Boyers, PA 16017-0001

Important Information
Federal Employees' Retirement System (FERS) disability benefits usually begin before the claim for Social Security benefits is fully processed. Because the FERS disability benefit must be reduced by 100% of any Social Security benefit payable for the first 12 months, Social Security checks should not be negotiated until the FERS benefit has been reduced. The Social Security checks will be needed to pay OPM for the reduction which should have been made in the FERS annuity.

If you are eligible to receive Social Security disability benefits but do not receive them because of eligibility for benefits from the Office of Workers' Compensation Programs (OWCP), you must still notify OPM of your eligibility and the amount you would be eligible to receive if you were not receiving benefits from OWCP.

Notifying OPM if you are Receiving a Federal Employees' Retirement System (FERS) Disability Annuity and you Lose Entitlement to Social Security Benefits
If you lose entitlement to Social Security disability benefits while receiving a FERS disability benefit, you will need to contact OPM. We will verify your loss of Social Security Administration (SSA) eligibility and recalculate your benefit without an SSA reduction.

Compensation from the Office of Workers' Compensation Programs (OWCP), U.S. Department of Labor

Entitled to a Total or Partial Disability (Non-Scheduled Award) Award
If your workers' compensation award is based on total or partial disability (a non-scheduled award), you may not receive a Federal Employees' Retirement System (FERS) annuity during the same period that you are in receipt of OWCP benefits. If you are receiving this type of Workers' Compensation, you must promptly notify the Office of Personnel Management (OPM) of your compensation award. You should also notify OPM of any change in the reason for your compensation award (for example, your benefit is changed from a scheduled to a non-scheduled award). You will be liable for any overpayment of annuity that occurs due to dual payment of benefits while you are receiving a non-scheduled award. It is your responsibility to minimize any period of overpayment by promptly notifying OPM at:

U. S. Office of Personnel Management
Federal Employees' Retirement System
Boyers, PA 16017-0001

Entitled to a Scheduled Award
If you receive a "scheduled award" from the Office of Workers' Compensation Programs, you may receive both this compensation and any FERS annuity. A "scheduled award" is usually based on a disability resulting from the loss of a function or member of the body, such as a hearing loss or the loss of an arm. You do not need to notify OPM if you receive a scheduled award. However, you need to notify OPM if the scheduled award is converted to a non-scheduled award in the future.

Survivor Rights Under the Federal Employees' Retirement System (FERS) if Your FERS Annuity has Been Suspended Because you are Receiving Compensation Benefits from the Office of Workers' Compensation Programs (OWCP)
If your survivors are not eligible for death compensation benefits from OWCP and you did not get a refund of the amount in your FERS retirement account, they may receive FERS survivor annuity benefits, provided they are otherwise eligible for this benefit. However, the law prohibits receipt of OWCP death compensation and FERS survivor annuity benefits at the same time. Therefore, if your survivors are eligible for both compensation and FERS survivor annuity benefits, they will have to elect which of the two benefits they wish to receive. (A survivor's election to receive death compensation from OWCP in lieu of the survivor annuity terminates the person's right to FERS survivor annuity benefits.)

If your eligible survivors are entitled to OWCP compensation under a "scheduled award" or due to a third party settlement, they may receive a FERS survivor annuity and compensation benefits covering the same period of time.

RI 90-8
Revised January 2000
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