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Federal Employees Benefits Q &A

Do you have questions about your federal employee CSRS or FERS pension/annuity or federal employee retirement planning? Concerns about your Thrift Savings Plan (TSP) account or what about federal employee pay and leave issues?

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The Q&A forum is moderated by Ed Zurndorfer -- an expert on federal employee benefits -- and a Certified Financial Planner, chartered life underwriter and chartered financial consultant in Maryland.

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Banzai  
#1 Posted : Sunday, September 22, 2019 10:08:13 AM(UTC)
Banzai

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My spouse is retiring as a CSRS Offset employee at age 55. From a previous marriage, their former spouse was provided with a "Pro Rata" share of their "CSRS retirement" which is on file with OPM by way of a qualified domestic relations order (ODRO). When my spouse turns 62 and becomes eligible for Social Security, their CSRS annuity will be reduced / offset by a computation of their earned SS benefit.

My question is, will the amount the former spouse receives, also be reduced by a proportional amount of the total CSRS annuity reduction or does the amount to them continue unchanged? The divorce decree makes no mention and I've never heard this question asked before.
Ed Zurndorfer  
#2 Posted : Sunday, September 22, 2019 10:23:30 AM(UTC)
Ed Zurndorfer

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This is obviously a very complicated question. But the short answer is that the former spouse is entitled to a portion of the CSRS annuity without the reduction for the CSRS Offset amount which affects the CSRS Offset annuitant only.
Banzai  
#3 Posted : Monday, September 23, 2019 1:26:54 PM(UTC)
Banzai

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Ed, thank you for your reply. So if the unreduced annuity is say $4000 per month and the former spouse is entitled to a pro rata amount of $750 of it, then at 62 yrs old, when the $4000 is reduced / offset by say $1000, the former spouse still receives $750, where as the annuiant is only receiving $3000 from the CSRS retirement fund?

I understand that at 62, the spouse is then recieving a benefit from social security in addition to the reduced amount from CSRS. My understanding of "pro rata" means proportional allocation. Maybe I'm splitting hairs, but if the entitlement is a "Pro Rata share of the CSRS retirement, then if that amount goes down, wouldn't the pro rata share of it also reduce proportionally?

Are both the SSA benefit and CSRS annuity "considered" a single CSRS retirement? If so, then would the amount the former spouse receives go up at 62, due to the SSA benefit being more than the offset applied to the spouse's CSRS annuity, as are most CSRS Offset employees? This situation has to have already happened to other retirees.
Ed Zurndorfer  
#4 Posted : Tuesday, September 24, 2019 1:56:18 AM(UTC)
Ed Zurndorfer

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The former spouse's portion of the CSRS annuity as stated on the court order is not subject to the CSRS Offset amount. Only the CSRS Offset annuitant's CSRS portion amount is. In your example, the CSRS Offset Annuitant is suppose to receive a gross monthly annuity of $4,000 before any reductions. The former spouse under the court order will receive $750 per month, resulting in the CSRS Offset annuitant receiving $3,250 per month. With a CSRS Offset amount of $1,000, the CSRS Offset annuitant will receive $3,250 less $1,000, or $2,250. The CSRS Offset annuitant can recover the $1,000 when he or she applies for his or her Social Security. Yes, the CSRS retirement and Social Security are considered "one retirement", but only for the CSRS Offset annuitant and not for a spouse or a former spouse. This is because a spouse or a former spouse earn their own Social Security benefit. Note that the CSRS Offset annuitant could apply for half of a spouse's or former spouse's Social Security benefit ("spousal" benefit) if it turns out the latter's benefit is much higher than the CSRS Offset annuitant's Social Security benefit (all of the benefit if the spouse or former is deceased - "widow/widower" benefit"). This is because a CSRS Offset annuitant is not subject to the Social Security Government Pension Offset.
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