VSIP and insurance for retirement


Q. I am a CSRS employee, 55 years old with 31 years of service. If I receive a voluntary separation incentive payment, is it reduced by six weeks of severance pay I received in 1997? Would my spouse be able to keep FEHB family plan if I die? When I use the advanced retirement calculator it shows 75 percent reduction for basic insurance. Is that automatic? And does FEGLI pay out the same death benefit as currently indicated in my Employee Benefit Information System?

A. 1. Your VSIP wouldn’t be reduced by any severance pay you previously received. 2. If you were enrolled in the self and family option of your FEHB plan when you died, your husband would be able to continue that coverage if you were still employed at the time or, if retired, had elected a survivor annuity for him. 3. If retired, you would continue to pay premiums on your FEGLI insurance until age 65, at which point the deductions would end and your insurance would automatically decline at the rate of 2 percent per month until it reached 25 percent of its original face value. If you wanted to retain a higher percentage of that coverage, you’d have to continue to pay the premiums, which would be higher.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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