Visit FedSmith.com to subscribe to our free email list!

Confusion About FERS Lump Sum Payout

I am under FERS, and I did just submit a non-spousal beneficiary form to HR for my pension. If there is no lump sum payout, then what would the beneficiary form be for?

Q: After reading this article (What Every Federal Employee’s Financial Planner Should Know About Federal Retirement and Benefits), I am confused. I am under FERS, and I did just submit a non-spousal beneficiary form to HR for my pension. If there is no lump sum payout, as you suggest, then what would the beneficiary form be for? Indeed, the form indicated that the beneficiary would have to request the benefit. Even though the form was submitted, unless requested, the benficiary would not receive what is to my understanding the lump sum of my pension should something happen to me.

A: The reason for your confusion is that the article is referring to the fact that the retiree does not get a choice to take a lump sum distribution instead of a pension. Your email refers to a refund of employee contributions to a beneficiary at the time of the employee’s death.

These two items are totally different.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

About the Author

John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.