Q. My mom just passed on. She was receiving a disability annuity. When we checked with OPM, we were shocked to find out they had taken all of her retirement contributions and used it for her disability payments. Is this really what happened?
A. In all likelihood, yes. Annuity payments to retirees — whether regular or disability — initially come from the contributions employees made to the retirement system while they were working. Only when that money runs out does the government begin making those payments out of the retirement fund. A retiree who worked full time for an entire career will usually receive all his/her contributions in annuity payments within 18 months of retiring. Disability retirees — who have much shorter careers — will have them returned much sooner.
3 Comments
hopefully this does not include Federal Life Insurance -which is paid separatly.
Federal employees contribute to the retirement system. When they retire, those contributions are returned to them in their annuity payments. They purchase life and health insurance coverage, which are unrelated.
thankj you