Bridging a Financial Gap That We All Face

This article first appeared in the Fall 2013 newsletter of the American Foreign Service Protective Association.

Did you know that there is an unavoidable delay between when a Foreign Service annuitant dies and when their survivor starts receiving benefits? Last year, the Senior Living Foundation made nearly $60,000 in emergency grants to new widows/widowers who found themselves without funds during the several months between when their spouse’s monthly annuity payment stopped and when their survivor annuity began and/or any life insurance was paid out. Here are steps that you can take to minimize or even avoid this problem for your survivors.

First, show your survivors the Foreign Service Annual Annuitant Newsletter when you receive it in the mail from the Department of State each November. Then, place it where your survivors can find it. The newsletter contains detailed instructions for survivors to take upon the death of an annuitant. The bottom line is that neither the Department of State nor MetLife (which processes Federal Employees Group Life Insurance payments) can initiate actions to pay benefits until the survivors have provided all of the required documentation (such as certified copies of the death certificate) and have submitted fully-completed forms to apply for benefits. The Department of State’s goal is to deliver the first survivor annuity payment within 45 days of receipt of required documentation. FEGLI does not publish statements on its processing times.

The sooner the survivors provide the required paperwork means the sooner the payment authorization process can begin. Note that foreign-born spouses who do not have a Social Security Number must have an Individual Taxpayer Identification Number (ITIN) before a survivor annuity can be established. Obtaining an ITIN from the IRS takes at least six weeks, so it is best to complete that process before the need arises.

Second, maintain a cash reserve sufficient to cover 60 to 90 days of living expenses including large recurring bills, such as a mortgage or rent payment, car payment, or semi-annual property tax bill. The funds should be held in an account that is not automatically frozen upon the death of an account owner. In general, savings and checking accounts that are jointly held with rights of survivorship are not subject to being frozen upon the death of one account holder, but check with your own bank or credit union to verify its policies.

When the need arises, the bereavement counselors at the Department of State’s HR Service Center in Charleston, SC can assist survivors by providing guidance on benefits application procedures and forms. They can be reached at HRSC@state.gov, 1-866-300-7419 (toll free) and 1-843-308-5539 (outside of the U.S.).

By John K. Naland, Director, Office of Retirement, Department of State.

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