Financial Security and the Foreign Service Spouse (Part III)

Retirement Matters

The Foreign Service Pension Plan (FSPS)

When a Foreign Service Officer completes the paperwork for pension benefits, he/she must designate a beneficiary in the event of death. It is important to make sure that you, the spouse, are named as that beneficiary. Be especially vigilant about this if it is the second marriage for the officer. If the first spouse is still named as beneficiary, you would not receive survivor benefits at the employee’s death—or at least not without a good deal of legal trouble.

Current status can be checked online by the employee through the State Department Open Net. If the named beneficiary is not correct (and a State Department survey revealed that at least a quarter of these forms are probably incorrect) then it is simple for the employee to file a new Designation of Beneficiary form (SF-3102) with Human Resources at State. The employee can email for more information.

The American Foreign Service Association (AFSA) has compiled a page called “What Your Spouse Needs to Know” which outlines the exact steps that a spouse should take upon the death of an officer. The short version is: it is important that the spouse contact the Office of Retirement as soon as possible in order to prevent any gap in pension benefits, and to ensure that health insurance coverage under FEHB will continue (more on that later).

The amount of pension that the surviving spouse receives is 50 percent of the annuity by default. In that case, the retiree will receive 10 percent less of the annuity during his or her lifetime. This arrangement can be changed to “front-load” the benefits by reducing the survivor annuity to 25 percent or zero of the original pension. This may make sense if the spouse has their own substantial pension or is independently wealthy. However, the percentage can only be changed with the spouse’s notarized consent, and it also has implications for health insurance coverage.

In the case of divorce, a spouse who meets the following criteria is entitled by default to a “pro rata” share of an officer’s pension:

  1. Marriage to the participant for at least 10 years during the participant’s creditable service; and
  2. 5 of the 10 years of marriage must have been while the participant was a member of the Foreign Service; and
  3. the former spouse must not have remarried prior to age 55.

Whenever a new or amended divorce decree applying to a Foreign Service member or annuitant is provided to the Office of Retirement, that office will issue letters to both parties explaining the allocation of Foreign Service retirement benefits between them.  If a former spouse ever needs another copy of that letter, they may request one by e-mailing

The calculation of the benefits is too complicated to explain here, but a detailed explanation may be viewed on this page. “RNet” is an excellent State Department Internet website with answers to all these questions and more. Bookmark and use it to make sure that your “spousal retirement plan” is set up to your satisfaction!

The Thrift Savings Plan (TSP)

The TSP operates independently of FSPS but has similar procedures for ensuring survivor benefits. By default, if a participant does not designate a beneficiary, funds will be distributed in the following order: 1.) to the spouse, 2.) if no spouse, to the children equally, or 3.) if no spouse or children to the surviving parents.

A TSP-3 form can be filed to change this order, and should be filed in any case to make the participant’s wishes clear. However, it is especially important to review the named beneficiary in the case of divorce and/or remarriage. As with the FSPS, if the current spouse is not the named beneficiary then he/she is not technically eligible to receive the pension.

Current beneficiary information can be found on TSP statements, or the employee can call the TSP at 1-877-968-3778) to confirm or to find out how to change the beneficiary information.

In the event of divorce, a TSP account is considered an asset subject to division by the courts. However, it takes a court order to ensure that division or to “freeze” the account until a settlement can be reached. It is important that spouses understand that quick action may be required if separation or divorce is on the horizon.

Details on all matters relating to survivor and divorced spouse benefits are available on the Thrift Savings Plan website, Click “Life Events” at the top of the home page for links to brochures, forms, and other information.

The Federal Employees Health Benefit Plan (FEHB)

The FEHB is one of the most important benefits of federal employment, to both employees and spouses. Survivors of a covered federal employee can continue to participate in the plan IF the employee 1.) had “Self and Family” coverage and 2.) the spouse has not opted out of a survivor annuity (see FSPS, above). The surviving spouse must, however, report the employee’s death as soon as possible because there is a 60-day window for ensuring this coverage. If the transfer of benefits is not completed within this 60-day period, the spouse will lose eligibility to participate in the FEHB.

In the event of divorce, the spouse does not have any long-term right to be covered by the employee’s FEHB plan. However, he/she may apply for a Temporary Continuation of Coverage within 31 days of the date of divorce. Or, he/she may qualify to apply for FEHB coverage under the Civil Service Spouse Equity Act of 1984. Check this page on the RNet website for more information on these options.

In addition to the websites mentioned above, the Family Liaison Office (FLO) has a page of resources for spouses who are experiencing separation or divorce here and another page with retirement information for spouses here.

Spouses are also eligible to participate in the Career Transition Center’s Retirement Planning Seminar on a space-available basis. AAFSW provides an informative  3 hour session entitled “Life After the Foreign Service” (LAFS) as part of every retirement session at the OBC/TC. It is open to all “retiring” spouses. You do not have to be enrolled in the retirement class to participate, but you must reserve with OBC/TC.

When it comes to ensuring financial security in retirement, Foreign Service spouses have access to most of the information they need online. However, it is important to note that due to the Privacy Act, changes and updates to plans and beneficiaries can only be made by the employee. Therefore, spouses should take the initiative to confirm that everything is in order before any potential problems arise. Ideally, this would take place upon the employee’s entry into the Foreign Service, or upon marriage to an active employee. But it is never too late to ensure your own financial health in retirement: conduct your own “checkup” today!

Kelly Bembry Midura is AAFSW’s Content Manager. She has been a Foreign Service spouse for over 25 years, with service in Latin America, Africa, and Europe. She blogs at Well, That Was Different (

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