Federal Employee Benefits Education
Federal Employees have many great benefits that not all employer’s offer. To take full advantage of these benefits, we want to help answer your questions and understand your options. The Federal Government offers Pension Plans, Group Life Insurance, and several additional options to fill your specific needs.
There are great retirement benefits that federal employers offer, such as lifetime pension at retirement, that not many other employers offer. Let us help answer any questions you may have about these plans.
We help Federal Employees who are qualified and enrolled in the FERS or CSRS retirements plans to understand how they can best reach their future retirement goals.
Federal Employee Retirement System (FERS) employees have three options:
- 50% of the pension annuity goes to spouse, employee pays 10% of pension per month.
- 25% of annuity goes to spouse, employee pays 5% of pension per month.
- 0% benefit for survivor benefit, spouse dropped from health plan upon death but no fees to be paid.
Civil Service Retirement System (CSRS) employees have three options:
- 55% of retiree’s FULL annuity to spouse by paying 2.5% of first $3,600 of the monthly payout, and then 10% on everything above the $3,600.
- 55% of any selected amount of annuity to spouse with payment of 2.5% of first $3,600 of monthly payout and 10% of everything above the $3,600.
- No survivor benefit.
GROUP LIFE INSURANCE
If the Federal Employee die’s before Retirement, it is difficult to prepare for that emotionally, but we can help financially to make sure your family is taken care of with Federal Employee Group Life Insurance.
Federal Employee Group Life Insurance (FEGLI) Four options
Basic FEGLI Option: Default plan provided to Federal Government Employees. Payout is equal to the employee’s base annual salary rounded to the next thousand-dollar level with an additional $2,000.
- Monthly cost is $0.325 per $1,000
FEGLI Option A: Similar to the Basic Option, but with an additional $10,000 to benefit
- Variable cost based on age, with price increasing as employee ages.
FEGLI Option B: Up to five times the employees annual salary for payout benefit
- Variable cost based on age and selected multiplier amount, price increase as employee ages
FEGLI Option C: This option is for those seeking to provide coverage for family members. In the event of the death of the employee’s spouse or a dependent child, this plan offers up to five times the employees annual salary
- Benefit for the death of a spouse will be in multiples of $5,000 up to a max of $25,000
- Benefit for death of a dependent child will be in multiples of $2,500, up to a amx of $12,500
Wealth Management Advisors does not offer legal advice, but we want federal employees to know that it is important to sit down with a licensed estate planning attorney to make plans regarding their estate. There is more to estate planning than drawing up a will, so we suggest that you compile relevant paperwork before meeting with an estate planner and keeping them together in a secure place, including the following:
- All Life Insurance policies
- Thrift Savings Plan documentation
- Unpaid compensation
- Most current Last Will and Testament
It can hard to accept that at some point in life, assisted living or other long-term care options will be needed. With the high price tag of these facilities, it is important to be aware and understand what your options are. Most health insurance plans, including the Federal Employees Health Benefits program, offer little to no coverage for these expensive long-term care facilities. It is in your best interest to look into the Federal Long-Term Care Insurance Program to see if that is something you would like to invest in for potential future needs.
THRIFT SAVINGS PLAN (TSP)
This plan is designed to give federal employees the same type of benefit as the workers in the private sector who have access to a 401(k) plan. Contributions are done by automatic deductions with pre-tax dollars with the federal government matching up to 5% of the employee’s income as an additional contribution for those that are enrolled in the Federal Employee Retirement System (FERS) whereas the match is not available to those in the Civil Service Retirement System (CSRS).