If you are a government worker or are planning to marry one, there are lots more things to think about than guest lists and honeymoon locations. One of the most important items on the checklist is the possibility that the marriage will end in divorce. Not very romantic, but practical.
Because bad things can and do happen to good people. All the time …
True story : A couple divorced in 2001. He was a fed. Because he was ill and needed the money, she agreed in divorce mediation not to get part of his federal annuity. The agreement was that she would be a partial beneficiary of his FEGLI life insurance, along with his son from a previous marriage. The amount, she said, was determined “based on what I would have received over time if I had taken the pension (survivor annuity). The court decree ordered that he ‘shall irrevocably assign 43.29 percent ($200,000) of the FEFGLI ‘and that he must provide me with ‘verification of the irrevocable assignment of life insurance.’”
He did give his ex a Designation of Beneficiary along with and an Office of Personnel Management stamp dated 12-17-01 at the bottom. She said that form and the divorce degree were all she had.
Over the next decade, they spoke once or twice a year. He was in assisted living. After not talking for a while, she called his number, which had been disconnected. She went online and found that he had died a year before. No one, including his son, had contacted her.
When she contacted OPM, she was told she would get a “death packet” within 6 to 8 weeks. The instructions said no death certificate was necessary from her if another beneficiary had already done so. She assumed his son had done that. But to make sure, she called FEGLI and was informed “the designation was changed in 2003” and the benefits had been paid out. The person at the insurance office said: “OPM had no legal documents on file.” OPM has told her to wait for the death packet, fill it out with all legal documentation that she was a beneficiary too. But she’s afraid the insurance people will fight it and asked what to do.
I passed this on to a D.C.-area CPA and federal benefits expert. He agreed it was super-complicated. He said it “sounds like someone changed a beneficiary for the life insurance (FEGLI) … she sounds and writes like she has a grasp on reality and is smart. Also, it appears she wanted her then husband to be comfortable and she did exactly that.”
He warned she “may face a tough access issue with OPM. The problem is there may be no records re the divorce. OPM over the years developed a very, very tight ‘shake and bake’ set of rules re divorce, payment of the annuity and possibly FEGLI. It is odd there is no file. There has to be a file if a survivor’s annuity was elected.”
Tough issue. Tough time for the ex-wife. Divorced spouses can receive a survivor annuity. And life insurance. And in some cases they can keep the federal health insurance plan (FEHBP), although they will have to pay the full premium (the employee/annuitants share plus the 72 percent the government pays). But for married folks, the time to talk about it is before the marriage goes bad. Or ends.
Your Turn: We have a triple-header on today’s Your Turn radio show. Reporters Jory Heckman and Nicole Ogrysko will talk about plans to decentralize federal operations based on the D.C. area and the outlook for feds in 2018. Morning Drive anchor Tom Temin will give us his take on President Donald Trump’s State-of-the-Union address last night. Because of a scheduling error (mine, all mine) Kim Weaver, director of External Affairs for the Thrift Savings Plan will be our guest next week (Feb. 7) at 10 a.m.