PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           10 September 2002
	DOCKET NUMBER:   AR2002068856

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

	Mr. Carl W. S. Chun		Director	
	Ms. Nancy L. Amos		Analyst	

  The following members, a quorum, were present:

	Mr. Fred N. Eichorn		Chairperson	
	Ms. Barbara J. Ellis		Member	
	Mr. William D. Barr		Member	

	The applicant and counsel if any, did not appear before the Board.

	The Board considered the following evidence:

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

FINDINGS:

1.  The applicant has exhausted or the Board has waived the requirement for exhaustion of all administrative remedies afforded by existing law or regulations.

2.  The applicant, attorney for the two minor children of a deceased former service member (FSM), requests, in effect, that the records of their deceased father be corrected to show he declined to resume spouse Survivor Benefit Plan (SBP) coverage upon his remarriage.

3.  The applicant states that, according to the terms and intent of the Stipulation Agreement entered into as part of divorce proceedings, the widow of the FSM waived any interest in the SBP.  The FSM died prior to the divorce being finalized and the annuity is being paid to the widow whereas it should be paid to his surviving children.  As supporting evidence, he provides a signed statement from the widow concurring in this correction to provide for payment of future benefits to the FSM’s surviving children rather than to her.  Also provided is a signed statement from the FSM's surviving children and their legal guardian renouncing retroactive SBP benefits that were paid to the widow and understanding that the widow would not be liable for repayment of such benefits paid to her prior to the effective date of this record correction action.

4.  The FSM’s military records show that, after having had prior service, he reenlisted in the Regular Army in June 1956.  He was permanently retired by reason of a physical disability on 3 November 1970.

5.  Records at the Defense Finance and Accounting Service show that the FSM enrolled in the SBP in 1973 for spouse and children coverage.

6.  In 1994, the FSM divorced, leaving two dependent children.  He remarried on 8 May 1998.

7.  On 17 November 1999, the FSM and his spouse entered into a Stipulation Agreement.  In pertinent part, the Agreement stated that his spouse forever relinquished and released all right, title, and interest which she then or ever may have in and to the real, personal and mixed property of the FSM.  She also agreed to waive any right she may have had, then or in the future, to spousal support and maintenance.

8.  The FSM died on 13 July 2000, prior to the divorce becoming final.  The FSM’s widow, as the legal beneficiary, was paid the SBP annuity.

9.  Public Law 92-425, the SBP, enacted 21 September 1972, provided that military members on active duty could elect to have their retired pay reduced to provide for an annuity after death to surviving dependents.  Changes in SBP options are not authorized except in specific instances or authorized by law.  Coverage is suspended when there is no eligible beneficiary.  An Open Season was declared for members who retired prior to enactment of the SBP.

10.  Public Law 99-145, enacted 8 November 1985, permitted a previously participating retiree upon remarriage to elect not to resume spouse coverage or to increase reduced coverage for the latter spouse.  Changes must be made prior to the first anniversary of remarriage or else the previously suspended coverage resumes by default on the first day of the month following the first anniversary of the remarriage, with costs owed from that date.  An election to terminate spouse coverage under this law, once made, is irrevocable.

CONCLUSIONS:

1.  The Board believes that it was the intent of the FSM not to provide SBP coverage for his spouse once their divorce became final.  Once he no longer had an eligible spouse beneficiary, his children would have become the legal beneficiaries.  Unfortunately, he died prior to the divorce becoming final.  Since he was still legally married at the time he died, his widow was also the legal SBP beneficiary.  

2.  The widow stated that she waived any interest in the SBP in the Stipulation Agreement entered into as part of their divorce proceedings and now has relinquished her right to any future SBP payments in the statement provided with her application.  The FSM's children and their guardian have renounced retroactive SBP benefits that were paid to the widow and understand that the widow would not be liable for repayment of such benefits paid to her prior to the effective date of this record correction action.

3.  In order to provide the SBP annuity to the FSM’s dependent children, it would be appropriate to now correct his records to show that he elected not to resume spouse coverage when he married the widow.  This would make his minor children the legal beneficiaries of his SBP.  However, in accordance with the request of the widow (the legal beneficiary of the SBP annuity prior to this records correction taking effect) and with the concurrence of the FSM's children and guardian, only future payments of the SBP will be provided to the FSM’s children.  Any SBP annuity paid to the widow will not be recouped.

4.  In view of the foregoing, the FSM’s records should be corrected as recommended below.

RECOMMENDATION:

1.  That all of the Department of the Army records related to this case be corrected by showing that, on 1 June 1998, the FSM elected to terminate spouse coverage.

2.  That the date of this Board action will be the effective date to pay the SBP annuity to the FSM’s children.  Any SBP annuity paid to the widow will not be recouped.

3.  That so much of the application as is in excess of the foregoing be denied.

BOARD VOTE:  

__FNE __  __ BJE  _  __WDB __  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		__Fred N. Eichorn  _
		   CHAIRPERSON

INDEX

CASE ID	AR2002068856	
SUFFIX		
RECON		
DATE BOARDED	2002/09/10	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	PARTIAL GRANT	
REVIEW AUTHORITY		
ISSUES         1.	137.04	
2.		
3.		
4.		
5.		
6.