RECORD OF PROCEEDINGS
AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS

IN THE MATTER OF:	DOCKET NUMBER:  BC-2002-03119
		INDEX CODE:  137.00

		COUNSEL:  NONE

		HEARING DESIRED:  NO

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APPLICANT REQUESTS THAT:

Applicant is the widow of a former service member, who requests corrective action that would entitle her to a Survivor Benefit Plan (SBP) annuity.

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APPLICANT CONTENDS THAT:

She did not receive notification from the Air Force of her husband’s election not to participate in the SBP.  On 22 October 2001, her husband passed away.  Upon notifying the appropriate agencies of his death, she has been informed by the Defense Finance and Accounting Service (DFAS) that her deceased husband did not elect to participate in the spousal option of the SBP at the time of his retirement in January of 1981, at McChord AFB, WA.  She was married to the applicant on 3 September 1960 and they remained married until his death.  She did not, however, receive notification from the Air Force of her deceased husband’s election not to participate in the spousal portion of SBP nor was she counseled by the Air Force on the effects of such an election.

In support of the appeal, the applicant submits a copy of the Marriage Certificate and a copy of the Death Certificate.  Her complete submission, with attachments, is attached at Exhibit A.

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STATEMENT OF FACTS:

The former service member and the applicant were married on 3 September 1960.  DFAS records indicate that the former service member elected child only SBP coverage prior to his 1 February 1981 retirement.  DFAS-Cleveland Center (DFAS-CL) could not locate the member’s election form and there is no evidence that the required notice was or was not sent to him.  The youngest child lost eligibility in March 1996 and the member died on 22 October 2001.

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AIR FORCE EVALUATION:

AFPC/DPPTR states that the intent of the spouse notification requirement was to ensure spouses, upon the sponsor’s death, didn’t learn for the first time that they weren’t covered by SBP.  In this case, as in all Barber cases, the facts are essentially the same:  there is no record the required notice was sent to the applicant and the applicant has provided a sworn statement that the notification was not received.  Therefore, they recommend the decendent’s records be corrected to show on 31 January 1981 he elected spouse and child SBP coverage based on full retired pay.  Approval should be contingent upon recovery of premiums the decedent would have paid had he made the election at that time.

A complete copy of the evaluation is attached at Exhibit C.

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APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

The applicant states that she disagrees with the recommendation that approval should be contingent upon recovery of premiums (approximately $54,300.  In the decision Barber v. U.S. 676 F.2d 651, referenced in the advisory and referenced in other like cases, the decision held that the plaintiffs were entitled to coverage under the Survivor Benefit Plan from the date of the applicant’s death until they were no longer eligible.  The court further instructed that, “to the accrued total benefits to which plaintiffs are presently entitled there shall be offset that amount actually paid to the deceased during the period of his retirement that would otherwise have been deducted from his retirement pay as his contribution to the plan.”  In interpreting the courts instruction, it appears that the key phrases are “accrued total benefits” and “presently entitled.”  These phrases suggest that from the date of the deceased member’s death to the time the case was decided, if there were any benefits due to plaintiffs, that amount would be offset by the amount that would otherwise have been deducted had the member elected to join the SBP Plan; this does not imply that money should be deducted from future monthly annuity payments nor that the monthly survivor annuity should be delayed.

She does not believe it was the court’s intention to penalize the spouse yet a second time by denying benefits until a certain amount has been paid in full.  Thus, she is requesting reconsideration of the recommendation in part and she proposes the following:  (1) her deceased husband’s records be corrected to show that he elected spouse and child SBP coverage on 31 January 1981, (2) the total accrued benefits (from 22 October 2001 until a final decision by the Board) shall be accepted as payment in full towards the amount that would have been deducted had her deceased husband elected to contribute to the SBP Plan on 31 January 1981, and (3) monthly survivor annuity payments should begin immediately.  In addition, she is requesting a copy of the formula used to determine the amount that would have been deducted from her deceased husband’s retired pay had he elected to participate in the SBP Plan on 31 January 1981.

Applicant's complete response, with attachment, is attached at Exhibit E.

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ADDITIONAL AIR FORCE EVALUATION:

AF/JAG states that they agree with AFPC/DPPTR that the records be corrected to reflect he elected spouse and child SBP coverage.  They also agree that benefits, accrued and future, should be offset by the uncollected SBP contribution totaling approximately $54,300.

AF/JAG disagrees with the applicant’s interpretation of the Barber case.  In Barber, the court, in awarding SBP benefits, held the “accrued total benefits to which plaintiffs are presently entitled there shall be offset that amount actually paid to Sergeant Barber during the period of his retirement that would otherwise been deducted from his retirement pay as his contribution to the plan.”  As way of illustration, the court notes in its opinion that Sergeant Barber’s retired pay would have been reduced by $24.40 per month, as his contribution to the plan, and he died 15 months after becoming entitled to retired pay.  The offset against the plaintiff’s accrued total benefits would have been $300.  In applicant’s case, the uncollected plan contributions to be offset are approximately $54,300.  Whether the offset is against accrued or future SBP benefits, the overarching principle is SBP benefits are not free and the cost, in applicant’s case, is approximately $54,300.  While this outcome may appear harsh, another perspective is the applicant, and the deceased member, had the use and benefit of the uncollected SBP contributions ($54,300) for 20 years.

A complete copy of their evaluation is attached at Exhibit F.

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APPLICANT’S REVIEW OF ADDITIONAL AIR FORCE EVALUATION:

The applicant states that she is in disagreement over the recommendation whereby future survivor benefits be offset by the uncollected SBP contributions totaling approximately $53,400.  As stated in Barber v. US, 230 Ct.Cl. 287, the deceased military member had died 15 months after becoming entitled to retired pay.  There are, however, other cases where the deceased military member had died 4-9 years after becoming entitled to retired pay and the court’s conclusion and monetary compensation were controlled by the Barber case.  “The court holds that plaintiff is entitled to coverage under the Survivor Benefit Plan and to appropriate survivor benefits from the date of military members death until such time as plaintiff is no longer eligible therefore.  The court further holds that to the accrued total benefits to which plaintiff is presently entitled there shall be offset that amount actually paid to military member that would otherwise have been deducted from his retirement pay as his contribution to the plan.”

As she mentioned in her previous letter, they key words “accrued” and “presently” can only be interpreted to mean that the total benefits due from the time of her husband’s death, to the present, are the only benefits that should be used to compensate the government.  It was, it seems, the courts way of being equitable to both parties.  The plaintiff would automatically be enrolled in the survivor benefit plan and the government would not have to pay a large lump sum amount.  After all, the underlying issue in these types of cases, such as hers, is to insure that the government provides monetary damages when it does not comply with statutory provisions.

Finally, in response to the statement “… another perspective is the applicant, and deceased member, had the use and benefit of the uncollected SBP contributions (approximately $53,400) for 20 years,” she would like to remind the Board that her deceased husband had elected child coverage under the SBP from 1981 to 1996; thus, contributions had been made to the SBP for 15 years for which the government has had the use and benefit of since this money was never distributed to her children.

In conclusion, she requests from the Board a decision as follows:  (1) change her deceased husband’ records to show that he had elected spousal coverage under the SBP as of 31 January 1981; (2) Immediately begin providing all entitlements under the SBP, to include a monthly annuity; (3) the total accrued benefits (from 22 October 2001 until a timely decision by the board) shall be accepted as payment in full towards the amount that would have been deducted had her deceased husband elected to participate in the SBP on 31 January 1981.  Additionally, she is requesting, for the second time, a copy of the formula used to determine the amount that would have been deducted from her deceased husband’s retired pay had he elected spousal coverage under the SBP on 31 January 1981.

A complete copy of their evaluation is attached at Exhibit H.

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THE BOARD CONCLUDES THAT:

1.  The applicant has exhausted all remedies provided by existing law or regulations.

2.  The application was timely filed.

3.  Sufficient relevant evidence has been presented to demonstrate the existence of error or injustice.  In this regard, we note that the Air Force cannot determine whether or not the applicant was notified of her deceased husband’s election made in 1981.  Therefore, we agree with the comments and recommendation of the Chief, General Law Division and recommend the deceased member’s records be corrected to show that at the time of his retirement he elected spouse and child coverage under the SBP.

4.  Insufficient relevant evidence has been presented to demonstrate the existence of error or injustice with respect to the applicant’s request that she be exempt from repayment of at any unpaid contributions be recovered from any monies due her be waived.  In order for the applicant to remain eligible for the SBP annuity, by law, her spouse would have had to make an election at the time of his retirement in 1981.  We have noted the applicant’s arguments and do not find them sufficient to overcome the detailed assessment by HQ USAF/JAG.  Therefore, in view of the above and absent evidence that she would be treated differently from others similarly situated as a result of this requirement, this portion of the applicant’s request is not favorably considered.

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THE BOARD RECOMMENDS THAT:

The pertinent military records of the Department of the Air Force relating to APPLICANT be corrected to show that on 31 January 1981 he elected spouse and child coverage under the Survivor Benefit Plan (SBP) based on full retired pay.

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The following members of the Board considered this application in Executive Session on 30 September 2003, under the provisions of AFI 36-2603:

	            Panel Chair
	            Member
              Member

All members voted to correct the records, as recommended.  The following documentary evidence was considered:

   Exhibit A.  DD Form 149, dated 25 Sep 02, w/atchs.
   Exhibit B.  Applicant's Master Personnel Records.
   Exhibit C.  Letter, AFPC/DPPTR, dated 29 Oct 02.
   Exhibit D.  Letter, SAF/MRBR, dated 1 Nov 02.
   Exhibit E.  Applicant's Response, dated 15 Nov 02, w/atch.
   Exhibit F.  Letter, AF/JAG, dated 8 Jan 03.
   Exhibit G.  Letter, AFBCMR, dated 14 Jan 03, w/atch.
   Exhibit H.  Applicant’s Response, dated 7 Feb 03, w/atchs.

                                   

AFBCMR BC-2002-03119
INDEX CODE:  137.00

MEMORANDUM FOR THE CHIEF OF STAFF

	Having received and considered the recommendation of the Air Force Board for Correction of Military Records and under the authority of Section 1552, Title 10, United States Code (70A Stat 116), it is directed that:

	The pertinent military records of the Department of the Air Force relating to, be corrected to show that on 31 January 1981 he elected spouse and child coverage under the Survivor Benefit Plan (SBP) based on full retired pay.