Annuity Terms and Definitions

Annuity
Retirement benefit paid on a monthly basis

Annuity, Deferred
An annuity that begins more than 1 month after separation from employment at some future point when retirement age is reached. (Also called deferred benefits.)

Age Multiplication Factor
A factor used to determine the extra amount of Basic insurance payable at the time of your death, if you die before age 45 (also referred to as the "extra benefit").

Designation of Beneficiary
Notice, signed by you and witnessed by two persons, indicating the person(s) you want to receive your life insurance benefits. The form generally used for life insurance designations is the Designation of Beneficiary form (SF 2823).

Basic Insurance
The coverage, based on your annual rate of basic pay, which you automatically have as an eligible employee unless you waive it.

Market Rate of Interest
The percentage of interest paid on certain FERS deposits and refunds. Based on the average interest earned by the Civil Service Retirement and Disability Fund in the previous year. In 1998, the interest rate is 6.75%.

COLA, CSRS
CSRS cost of living adjustments (COLA's) provide an increase that is equal to the rate of inflation as measured by the Consumer Price Index (CPI). CSRS cost-of-living-adjustments are provided to retirees at all ages

Annuity, Reduced
A retiree's basic annuity that is reduced because of retirement before a certain age (for reasons other than disability). Annuities are also reduced because of unpaid deposits or redeposits, or to provide a survivor annuity. (Also called reduced benefits.)

Option C
Coverage, to insure your spouse and eligible child(ren), that you can elect in addition to Basic insurance. You can elect up to 5 multiples of the coverage amounts (each multiple equals $5,000 for a spouse and $2,500 for an eligible child). Also called family optional insurance.

Automatic Cancellation of Waiver
The automatic entitlement to Basic insurance and ability to elect Optional insurance if you are reinstated after a break in service of at least 180 days.