50 U.S.C. § 2071 — Lump-sum payments

(a) Entitlement to lump-sum credit^*. Subject to section 2082(d) and subsection (b), a participant is entitled to the lump-sum credit if all of these conditions are met: (1) the participant has been separated from the Agency^* for at least 31 days in a row and has not moved to a job covered by another retirement system for Government employees; (2) the participant applies to the Director^* for the payment; (3) when applying, the participant is not employed again in a position covered by this subchapter; and (4) the participant will not become eligible for an annuity under this subchapter within 31 days after applying. When a former participant receives the lump-sum credit, all annuity rights under this subchapter based on the service covered by that credit become void until the former participant is again employed in service covered by this subchapter.

(b) Conditions for payment of lump-sum credit.
(1) In general. When a former participant becomes entitled to the credit under subsection (a), the credit must be paid to the former participant and to any former spouse or former wife or husband under paragraphs (2) through (4). The former participant’s credit is reduced by the amount payable to a former spouse or former wife or husband.
(2) Pro rata share for former spouse. Unless a spousal agreement or court order under section 2094(b) expressly says otherwise, a former spouse receives a share of the participant’s credit: (A) 50 percent if the former spouse was married to the participant throughout the participant’s creditable service; or (B) if not, the share of 50 percent that equals the number of days the marriage overlapped the participant’s creditable service divided by the total number of days of that service.
(3) Share for former wife or husband. Payment must follow a court order under section 2094(c) concerning a former wife or husband if (A) the order expressly covers part of the credit; and (B) paying the credit would end that person’s right to a survivor annuity under section 2036 or to any part of the participant’s annuity under section 2094(c).
(4) Notification. A credit may be paid to or for a former participant only after written notice is given to (A) the current spouse, if any; (B) each former spouse; and (C) each former wife or husband with a court order covered by paragraph (3). It may be paid only if the Director receives the current spouse’s express written agreement. The requirement in this paragraph may be waived in the circumstances described in section 2031(b)(1)(D).

(c) Order of precedence of payment. A lump-sum payment authorized by subsection (d) or (e) of this section or section 2121(d) (the stray footnote digit in the supplied text is ignored), and any accrued but unpaid annuity authorized by subsection (f), must be paid to surviving individuals who are alive when the right to payment arises, in this order, after a valid claim is established. Payment to one person prevents any other person from recovering that payment: (1) the beneficiary or beneficiaries designated in a signed and witnessed writing that the Director received before the participant died. A beneficiary designation, change, or cancellation in a will or another document that was not executed and filed with the Director has no effect; (2) if there is no designated beneficiary, the surviving wife or husband; (3) if none of those people exists, the participant’s child or children, with descendants of deceased children taking by representation; (4) if none of those people exists, the participant’s parents or the surviving parent; (5) if none of those people exists, the properly appointed executor or administrator of the participant’s estate; and (6) if none of those people exists, the next of kin whom the Director decides is legally entitled.

(d) Death of former participant before retirement. (1) In general. Except as paragraph (2) provides, if a former participant who is eligible for a deferred annuity under section 2054 dies before age 62, the lump-sum credit must be paid under subsection (c). (2) Limitation. If a surviving former spouse or former wife or husband is entitled to a share under paragraphs (2) and (3) of subsection (b), the credit paid under paragraph (1) is reduced by the amount payable to that person.

(e) Termination of all annuity rights. If all annuity rights based on a deceased participant’s or annuitant’s service end before the total annuity paid equals the lump-sum credit, the difference must be paid under subsection (c).

(f) Payment of accrued and unpaid annuity when retired participant dies. When a retired participant dies, any annuity that has accrued but has not been paid must be paid under subsection (c).

(g) Termination of survivor annuity. If a survivor annuitant’s annuity ends for a reason other than death, any accrued but unpaid annuity must be paid to that individual. If the survivor annuitant dies, the accrued but unpaid annuity must be paid in this order, and payment prevents anyone else from recovering it: (1) to the properly appointed executor or administrator of the survivor annuitant’s estate; or (2) if there is none, to the next of kin whom the Director decides is legally entitled. No payment under paragraph (2) may be made until 30 days after the survivor annuitant’s death.