MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:   

	BOARD DATE:           19 September 2000                   
	DOCKET NUMBER:   AR2000035903

	I certify that hereinafter is recorded the record of consideration of the Army Board for Correction of Military Records in the case of the above-named individual.

	Mr. Carl W. S. Chun		Director	
	Mrs. Nancy Amos		Analyst	

  The following members, a quorum, were present:

	Mr. Hubert O. Fry, Jr.		Chairperson	
	Mr. John P. Infante		Member	
	Ms. Regan K. Smith		Member	

	The Board, established pursuant to authority contained in 10 U.S.C. 1552, convened at the call of the Chairperson on the above date.  In accordance with Army Regulation 15-185, the application and the available military records pertinent to the corrective action requested were reviewed to determine whether to authorize a formal hearing, recommend that the records be corrected without a formal hearing, or to deny the application without a formal hearing if it is determined that insufficient relevant evidence has been presented to demonstrate the existence of probable material error or injustice.

	The applicant requests correction of military records as stated in the application to the Board and as restated herein.

	The Board considered the following evidence:

	Exhibit A - Application for correction of military 
                records
	Exhibit B - Military Personnel Records (including
	            advisory opinion, if any)

APPLICANT REQUESTS:  That her annuity from the Retired Serviceman’s Family Protection Plan (RSFPP) election of her deceased spouse, a former service member (FSM), be based upon his retired pay at the time of his death.

APPLICANT STATES:  That she is receiving only $150.00 per month as an RSFPP annuity, based upon one-half of the FSM’s retired pay at the time he retired.  She believes she should be receiving an annuity of $850.00 per month, based upon one-half of the FSM’s retired pay at the time he died.  She does not understand why the FSM was never informed of any changes to the RSFPP annuity.  He believed she would receive one-half of his retired pay, including cost of living increases.  It would not have made sense to pay a $30.00 a month premium for 25 plus years into a plan that would provide only $150.00 a month.

EVIDENCE OF RECORD:  The FSM’s military records show:

He enlisted in the Regular Army on 7 June 1940.  He was commissioned on        3 February 1943 and continued to serve on active duty.  On 5 June 1958, the FSM elected to participate in the Uniformed Services Contingency Option Act of 1953.  He elected option 3 with option 4, annuity payable to or on behalf of his widow and surviving child or children, premiums to stop if he had no eligible beneficiary.  The FSM retired on 1 April 1961 in the rank of Major.  As of March 1995, the FSM was paying a monthly RSFPP premium of $29.80.  He died on   11 July 1995.

Public Law 83-239, enacted 8 August 1953, established the USCOA.  It was the first law to permit military members to receive reduced retired pay during their lifetime in return for insuring that their widows and eligible children would receive an annuity after their death.  The reduction to be made in the retired pay of an active or retired member who made an election was computed as of the date of retirement in the case of an active member and as of the date of election in the case of a retired member, by an actuarial equivalent method using as a basis appropriate actuarial tables selected by the Board of Actuaries.  In the case of an active or retired member the computation was made at the time of retirement, or election, and the actuarial equivalent method and actuarial tables would be those in effect at that time.  This in effect froze the premium that would be paid by the retiree.  However, the survivor annuity also remained frozen since it was based on the member’s initial retired pay.

Public Law 87-381, enacted 4 October 1961, changed the USCOA to the RSFPP.  The USCOA automatically converted to the RSFPP with the same election options and annuity amounts as the USCOA. 

Public Law 92-245, enacted 21 September 1972, repealed the RSFPP and established the SBP.  The RSFPP was not automatically converted to the SBP.  The SBP provided for a spouse annuity payment of 55 percent of the base amount until age 62 and 35 percent of the base amount after age 62.  (For example, in 1999 dollar terms a monthly base amount of $1800.00 and a spouse election would result in a premium cost of $117.00, a pre-age 62 annuity amount of $990.00 and a post-age 62 annuity amount of $630.00.)  Cost-of-living adjustments (COLAs) applied to the base amount and the annuity.  A 12-month Open Season enrollment period was established for retired members.  

Public Law 93-155, enacted 16 November 1973, extended the enrollment deadline until 20 March 1974.  

Public Law 95-397, enacted 30 September 1978, provided that RSFPP annuities payable to survivors of members who died before 20 March 1974 would thereafter be subject to adjustment for increases in the cost of living, such adjustments to take effect at the time and in the same percentage amount as retired and retainer pay adjustments take effect.

Public Law 97-35, enacted 12 August 1981, established the second Open Season from 1 October 1981 – 30 September 1982.

Public Law 101-189, enacted 29 November 1989, established an Open Season to be conducted 1 October 1991 (but deferred to 1 April 1992) – 30 September 1992.   Public Law 101-510, enacted 5 November 1990, delayed the start of the third Open Season to 1 April 1992 – 31 March 1993.

Title 10, U. S. code, section 1436, provides that the computation of the reduction in the retired pay of a member who elects an annuity under the RSFPP shall be computed as of the date when the person becomes eligible for that pay but without regard to any increase in that pay to reflect changes in the Consumer Price Index.  It shall be computed under an actuarial equivalent method based on the appropriate actuarial tables selected by the Board of Actuaries.  The method and tables shall be those in effect on the date as of which the computation is made.

DISCUSSION:  Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, it is concluded:

1.  In order to justify correction of a military record the applicant must show to the satisfaction of the Board, or it must otherwise satisfactorily appear, that the record is in error or unjust.  The applicant has failed to submit evidence that would satisfy this requirement.

2.  When the FSM retired, the reduction in his retired pay to pay for the RSFPP was computed as of the date of his retirement by an actuarial equivalent method using as a basis appropriate actuarial tables selected by the Board of Actuaries.  The computation was made at the time of retirement using the actuarial equivalent method and actuarial tables in effect at that time.  This method of computation is still noted in the law (Title 10, U. S. code, section 1436).

3.  When the FSM retired on 1 April 1961, his RSFPP premium was computed to be $29.80 monthly.  If he had died on 1 May 1961, the applicant would have received an annuity of $150.00.  When the FSM died on 11 July 1995, his RSFPP premium was still $29.80.  Over the years his retired pay increased as a result of COLA increases, but his premium costs never increased.  The FSM was a field grade commissioned officer.  It is not reasonable to presume that the FSM believed that the same $29.80 that would have bought the applicant an annuity of $150.00 in 1961 would have bought her an annuity of $850.00 in 1995.  The Board concludes that the FSM was aware that the annuity would be based on his retired pay as of the date he retired and elected not to enroll in the SBP, choosing instead to retain more of his retired pay while he was alive.  

4.  Public Law 95-397, which provided that RSFPP annuities payable to survivors of members who died before 20 March 1974 would thereafter be subject to adjustment for increases in the cost of living, was not unfair to the applicant.  The FSM had three opportunities to enroll in the SBP, which enrollment would have provided to the applicant an annuity regularly increased by COLAs.  He did not take advantage of those opportunities.  The survivors receiving an RSFPP based upon a member’s death prior to 20 March 1974 never had those opportunities.  

5.  In view of the foregoing, there is no basis for granting the applicant's request.

DETERMINATION:  The applicant has failed to submit sufficient relevant evidence to demonstrate the existence of probable error or injustice.

BOARD VOTE:

________  ________  ________  GRANT

________  ________  ________  GRANT FORMAL HEARING

__hof___  __jpi___  __rks___  DENY APPLICATION

		    Carl W. S. Chun
		    Director, Army Board for Correction
    of Military Records

INDEX

CASE ID	AR200035903	
SUFFIX		
RECON		
DATE BOARDED	20000919	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(DENY)	
REVIEW AUTHORITY		
ISSUES         1.	137.00	
2.		
3.		
4.		
5.		
6.