The Foreign Service Journal, November 2007

58 F OR E I GN S E R V I C E J OU R N A L / NOV EMB E R 2 0 0 7 A F S A N E W S Retiree Issues Survivor Annuities: The Mechanics BY BONNIE BROWN, RETIREE COORDINATOR Q: What should a surviving spouse do in the event of the death of an annuitant spouse? A: The first step is to promptly report the death to the RetirementOffice by phone: (202) 261-8960, or toll-free 1 (866) 224-9053; or by e-mail: retirement@state.gov . Return to the State Department any uncashed annuity checks received after the death. HR/RET will enter the death into the annuity system database to place a hold on future annuity payments to the annu- itant. Within 24 to 48 hours, HR/RETwill fax a report of death to the Retirement Accounts Division inCharleston, send a survivor ben- efits package to the surviving spouse and, if he or she is eligible to continue health benefits, change FEHB enrollment to reflect the appropriate coverage for the survivor. Q: When will a survivor become eligible for a survivor annuity? A: The survivor will be eligible for an annuity the day after the death of the annuitant. However, annuities are paid a month in arrears: the payment received at the beginning of the month is for the previous month. That means that, if the annuitant died at some point during the month, he or she had been entitled to an annuity for that portion of the month when he or she was alive, and the survivor became entitled to a survivor annuity beginning the day after the death of the annuitant. Q: How does the Retirement Accounts Division handle this allo- cation? A: Inorder to stopanannuitypayment the followingmonth and avoid an overpayment, RADmust receive notifica- tion of the death of an annuitant by the processing deadline of the 14th of the month. Q: What happens if notification of death is received after the 14th of themonth, the annuity check is not stopped in time, and it is automatically deposited in a joint account? A: If, upon reviewing its pay records, RADdetermines that anannuitypaymentwasmadeafter thedeathof theannu- itant,RADnotifies theTreasuryDepartment. If thishappens, accord- ing toTreasury regulations, the entire annuitypayment for themonth in which the annuitant died must be reclaimed. Treasury begins the reclamationprocess by requesting a refund fromthe financial institutionwhere the annuitypaymentswere auto- maticallydepositedand takingpayment fromtheaccount. The finan- cial institution is required to mail a copy of the notice requesting return of funds to the last known address of the account owners. If the annuity payment is not returned to the Treasury within 120 days, Treasurywill begin other administrative offset and collection procedures. Q: When will the survivor begin receiving a survivor annuity? A: After HR/RET reviews its records and sends an autho- rization for a survivor annuity to theRetirementAccounts Division. RAD then processes a final payment to the eligible sur- vivor, beneficiary or estate and initiates the survivor annuity. Again, this authorizationmust be receivedby the processing deadline (the 14thof themonth) inorder tomake the change inpayments effec- tive the following month. Q: What is a final death benefit? A: A final deathbenefit is apayment for thenumber of days the annuitant livedduring themonth inwhichhe or she diedandwas entitled toanannuity. After adjudicationbyHR/RET, RAD pays the final net annuity payment to the designated benefi- ciary, which in most cases is the surviving spouse. Q: Whom should I call if I need an explanation of my survivor payments? A: You can contact RM/RAD by phone: (843) 308-5552, or 1 (800) 521-2553; orby e-mail: RAD2@state.gov . Both RAD and HR/RET are always available to assist retirees and fami- ily members during this very difficult time. Q & A In order to stop an annuity payment the following month and avoid an overpayment, RAD must receive notification of the death of an annuitant by the processing deadline of the 14th of the month.