RECORD OF PROCEEDINGS AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS IN THE MATTER OF: DOCKET NUMBER: BC-2012-05161 XXXXXXX COUNSEL: NONE HEARING DESIRED: NO ________________________________________________________________ APPLICANT REQUESTS THAT: Her debt as a result of her election of her nephew as a Natural Interest Person (NIP) beneficiary to her Survivor Benefit Plan (SBP) be removed and that she be reimbursed for payment and interest related to this election. ________________________________________________________________ APPLICANT CONTENDS THAT: She believes she was given the wrong information when she changed her beneficiary from her brother to her nephew. She states that she would have never elected her nephew as NIP had she been given the correct information. She had her brother identified as the NIP beneficiary to her SBP; however, when her brother died she inquired about having her nephew designated as the NIP. In May 11, she notified the Defense Finance and Accounting Service (DFAS) Retired Military Pay section of her brother’s death and inquired if she could then elect her nephew as the NIP. She was advised that she could; however, there would be a slight increase in the premium. She contacted DFAS several times because the deduction out of her retired pay had not been increased and remained the 10 percent as it was when her brother was beneficiary. In Dec 11, she was notified that she was assigned a debt of $10,163.93 and that her SBP premiums had increased from 10 percent to 45 percent. She cannot afford a 45 percent reduction in her retirement pay for SBP and would like the resultant debt removed and to be reimbursed for the debt and interest payments she has already paid. The applicant's complete submission, with attachments, is at Exhibit A. ________________________________________________________________ STATEMENT OF FACTS: Based on the letter prepared by the DFAS office of primary responsibility, on 12 May 00, the applicant retired from active duty. She elected her brother as a NIP beneficiary on her SBP. On 23 May 11, DFAS received a letter and a copy of her brother's death certificate noting that her brother died on 15 Apr 11. In her letter, she requested that her nephew be established as the NIP for the SBP annuity. On 7 Nov 11, the applicant called the DFAS Customer Contact Center as a follow up to her letter regarding her request to designate her nephew as a NIP for SBP. DFAS sent the applicant a letter, dated 20 Dec 11, advising her that her nephew has been established as a NIP for SBP effective 1 May 11, and as a result she has been undercharged SBP costs for the period 1 May 11 through 31 Dec 11 in the amount of $10,163.93. On 6 Jan 12, the applicant requested a waiver of the SBP cost debt. On 1 Jun 12, DFAS withdrew the applicant’s nephew as SBP NIP and he has not been reinstated. On 25 Jun 12, a letter from DFAS, Debt and Claims Management was sent to her advising that her request for a waiver was denied. On 5 Oct 12, in an effort to remove the debt, the applicant wrote a letter to DFAS requesting to put her brother back on as an SBP beneficiary since she will have to pay the costs back due to the denial of her waiver. ________________________________________________________________ AIR FORCE EVALUATION: DFAS-JBJE/CL, Retirement and Annuity Pay, recommend the applicant’s record be corrected to show that she did not make a subsequent NIP election after the death of her brother. However, she will no longer be able to elect a new beneficiary for SBP, as a new election may only be made during the 180-day period beginning on the date of the death of the previous beneficiary. If the Board should approve her request for a waiver, DFAS will cancel the SBP premium debt, refund the monies paid towards the debt, refund SBP premiums deducted from her retired pay for her nephew and adjust her military retired pay records accordingly. The applicant’s indebtedness arose solely from the non-payment of SBP premiums and represents a bill for the insurance coverage she was provided for the benefit of her nephew. While there were delays in processing her request, ultimately, she did receive the benefit of the coverage for the period Jun – Dec 11. If a debt arises because a member is not charged the proper amount in a timely manner, it is not considered inequitable to require a member to pay the cost when the error is detected. Therefore, the SBP NIP cost debt will continue to be deducted from her military retirement pay until it is recouped approximately Jan 14. The complete DFAS evaluation is at Exhibit B. ________________________________________________________________ APPLICANT'S REVIEW OF AIR FORCE EVALUATION: A copy of the Air Force evaluation was forwarded to the applicant on 24 Feb 13 for review and response. As of this date, no response has been received by this office (Exhibit C). ________________________________________________________________ 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 warranting corrective action. The Air Force office of primary responsibility has adequately addressed the issues presented by the applicant and we are in agreement with their opinion and recommendation. In addition, we note that had the applicant been made aware of the cost of the SBP, as noted in her inquiries to DFAS and had it not been for the delay in processing her claim, more than likely the resultant debt would not have occurred. Aside, we note the recommendation to approve the applicant’s request to have the debt waived; however, such an action is unnecessary, as no debt will exist once the applicant’s records are corrected to the extent indicated below. ________________________________________________________________ THE BOARD RECOMMENDS THAT: The pertinent military records of the Department of the Air Force relating to APPLICANT, be corrected to show that her election, effective 1 May 2011 to designate her nephew as the Natural Interest Person beneficiary on her Survivor Benefit Plan be declared void. ________________________________________________________________ The following members of the Board considered AFBCMR Docket Number BC-2012-05161 in Executive Session on 29 August 2013, under the provisions of AFI 36-2603: All members voted to correct the records, as recommended. Although, XXXXXX chaired the panel, due to her unavailability, XXXXXXX has signed as Acting Panel Chair. The following documentary evidence was considered: Exhibit A. DD Form 149, dated 31 Oct 12, w/atchs. Exhibit B. Letter, DFAS, dated 14 Feb 13. Exhibit D. Letter, SAF/MRBR, dated 24 Feb 13. Acting Panel Chair