Common use of Full annuity Clause in Contracts

Full annuity. If a participant retires and does not provide a survivor annuity to a spouse, former spouse or designated bene- ficiary, the participant receives a ‘‘full’’ annuity. A full annuity means an annuity computed without any sur- vivorship reduction. Example: Average salary $20,000 and maximum of 35 years of service. Average basic annual salary for high 3 consecutive (a) At commencement of annuity, a participant or former participant may provide a regular survivor annuity for any eligible former spouse and, within the limits of paragraph (b) of this sec- tion, a regular survivor annuity to any spouse to whom he/she is then married as described in §§ 19.11–2 and 19.11–3, re- spectively. A regular survivor annuity for a spouse or former spouse equals 55 percent of the portion of the retiree’s annuity (up to the full amount) des- ignated as the base for the survivor an- nuity. To provide the survivor annuity, the participant must accept a reduc- tion in his/her full annuity equal to 21⁄2 percent of the first $3,600 of the des- ignated base, plus 10 percent of the bal- ance of the base. If a regular survivor annuity is being provided for both a spouse and a former spouse, the bases for each are added and the calculation made as in the following example: Participant’s full annuity as computed in § 19.10–1: $14,000. Maximum regular survivor annuity is 55 percent of full annuity: $7,700. $10,500. The base for the maximum regular sur- vivor annuity for a spouse would then be 25 percent of $14,000, or $3,500. Combined base: $14,000. Participant’s full annuity reduced as fol- lows: 21⁄2 percent of first $3,600 of the base: $90. Plus 10 percent of the amount over $3,600 ($14,000–3,600) $10,400: $1,040. Total reduction in participant’s full annu- ity: $1,130. Participant’s reduced annuity: $12,870. Survivor annuity for former spouse: 55 per- cent of $10,500 or $5,775. Survivor annuity for spouse: 55 percent of $3,500 or $1,925. Joint election of base for regular survivor annuity of 90 percent of the maximum, or 90 percent of $14,000: $12,600. Participant’s full annuity reduced as fol- lows: 21⁄2 percent of first $3,600 of the base: $90. Plus 10 percent of the amount over $3,600 ($12,600–3,600) $9,000: $900. Total reduction in participant’s full annu- ity: $990. Participant’s reduced annuity: $13,010. In this example, if divorce occurs subse- quent to retirement and a court orders a 75 percent share for the former spouse, the base $13,220. If the former spouse qualifies for a pension as described in § 19.9 based on a pro rata share of 75 percent, the pension would equal 50 percent of the participant’s reduced annu- ity times 75 percent (50% × $13,220 × 75%): 4,957.50. The participant’s reduced annuity would then be further reduced by this pension ($13,220–$4,957.50) to provide an annuity to the former participant of $8,262.50. If this annuitant later remarried, the max- imum base for the regular survivor annuity for the new spouse would be the amount des- ignated at retirement, $12,600, less the amount committed to the former spouse, $10,500: $12,600–10,500 or $2,100. The survivor annuity for this spouse: 55 percent of $2,100 or $1,555. The election of this benefit for the new spouse would be made individually by the an- nuitant since a marriage after retirement does not give a spouse a right to participate in the election. If the election is made to provide a regular survivor annuity to the new spouse, all of the above calculations would be recomputed effective the first day of the month begin- ning one year after the date of the remar- riage, as follows: Base for survivor annuity for former spouse: 75% of $14,000 or $10,500. Survivor annuity for former spouse: 55% of $10,500 or $5,775. Base for survivor annuity for spouse: 15% of $14,000 or $2,100. Survivor annuity for spouse: 55% of $2,100 or $1,555. The combined base for the survivor bene- fits is $10,500 plus $2,100 or $12,600. The annu- ity reduction on this combined base as com- puted above is $990. The participant’s annuity after reduction for survivor benefit would be $14,000–$990 or $13,010. The pension for the former spouse would be 50% × $13,010 × 75% or $4,878.75. The participant’s annuity would be further reduced by this amount: $13,010–$4,878.75 to provide an annuity after this recalculation of $8,131.25. (b) The maximum regular survivor annuity or combination of regular sur- vivor annuities that may be provided under this section is limited to 55% of the principal’s full annuity computed at retirement. If an annuitant is re- called to active duty in the Foreign Service, he/she may provide additional regular survivor annuities under