BOARD DATE: 12 October 2017 DOCKET NUMBER: AR20160002721 BOARD VOTE: _________ _______ ________ GRANT FULL RELIEF ________ ________ ________ GRANT PARTIAL RELIEF ________ ________ ________ GRANT FORMAL HEARING ____x____ ___x_____ ____x____ DENY APPLICATION 2 Enclosures 1. Board Determination/Recommendation 2. Evidence and Consideration BOARD DATE: 12 October 2017 DOCKET NUMBER: AR20160002721 BOARD DETERMINATION/RECOMMENDATION: The evidence presented does not demonstrate the existence of a probable error or injustice. Therefore, the Board determined the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned. ______________x___________ CHAIRPERSON I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case. BOARD DATE: 12 October 2017 DOCKET NUMBER: AR20160002721 THE BOARD CONSIDERED THE FOLLOWING EVIDENCE: 1. Application for correction of military records (with supporting documents provided, if any). 2. Military Personnel Records and advisory opinions (if any). THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE: 1. The applicant, a friend of a deceased former service member (FSM), requests, in effect, correction of her deceased friend's record by awarding her insurable interest benefits under the Reserve Component Survivor Benefit Plan (RCSBP). 2. The applicant states: a. She was listed as the RSCBP insurable interest person for Staff Sergeant (Retired) I.L. Con_, an FSM, who died on 11 April 2015. b. The FSM's Defense Finance Accounting Service Retiree Account Statement, dated 22 January 2015, reflects the amount of $110.40 was being deducted from his retired pay for SBP costs and also reflects her name for the 100 percent share of SBP benefits. A letter, dated 29 April 2015, initially states no allotments were being deducted from the FSM's retired pay at the time of his death on 11 April 2015. c. In a letter, dated 20 August 2015, DFAS erroneously addressed the SBP for a deceased husband by the name of W.C. Isa_. The letter also explains that she (the applicant) was ineligible for the annuity and states "individual added to the coverage at the time is the person to receive it. [Natural interest person (NIP)] coverage is made for the specific individual elected and does not transfer from person to person like spouse to child coverage." d. In a letter, dated 15 September 2015, DFAS informed her the FSM was her deceased husband, which he is not, and she was an insurable interest beneficiary and was listed as such. The letter also references another Soldier, Sergeant (SGT) J. Bur_, to whom she has no relation and/or knowledge of existence. The letter further states the FSM's retired pay records reflect that he did not elect her for NIP coverage for the SBP when his Retiree Account Statement clearly states the contrary to that fact. Also, the FSM was not her deceased husband and she is not related to SGT Bur_. e. In her response, dated 26 October 2015, she states that the FSM completed a DD Form 2656 (Data for Payment of Retired Personnel) as per instructions and subsequently received notification from DFAS, dated 18 November 2010, acknowledging the insurable interest person. 3. The applicant provides: * FSM's: * Army National Guard (ARNG) Retirement Points History Statement * Notification of Eligibility for Retired Pay at Age 60 memorandum * DD Form 1883 (SBP Election Certificate) * Orders P11-929951 * DFAS Summary of Retired Pay Account * DFAS-CL Form 7720 (Retiree Account Statement) * FSM's death certificate * Four letters from and to DFAS * Her: * DD Form 2656-7 (Verification for Survivor Annuity) * Direct Deposit Sign-Up Form * W-4P (Withholding Certificate for Pension or Annuity Payments) * her Medicare Health Insurance Card and driver license CONSIDERATION OF EVIDENCE: 1. The FSM was born on 23 December 1949. He was inducted into the Army of the United States on 10 June 1970. He was honorably released from active duty on 19 December 1971 and he was transferred to the U.S. Army Reserve. He was credited with completing 1 year, 6 months, and 10 days of active service. 2. The FSM enlisted in the Alabama ARNG (ALARNG) on 26 August 1973 and served continuously through several reenlistments or extensions in various assignments. 3. On 29 March 1993, he was issued a Notification of Eligibility for Retired Pay at Age 60 (20-Year Letter). 4. On 18 April 1993, he completed and signed a DD Form 1883. The form shows: * he was not married and did not have dependent children * he elected Option C (Immediate Annuity) for a "natural person with an insurable interest" based on the full retired pay * he elected his younger brother, David, as the insurable interest beneficiary * a witness signed this form and the form was filed in his official military personnel record 5. He was honorably discharged from the ALARNG on 18 November 1999 and transferred to the Retired Reserve. 6. He reached age 60 on 23 December 2009. 7. On 26 October 2010, he completed and signed a DD Form 2656. The form shows: * he was not married and he did not have dependent children * he elected Option C (Immediate Annuity) for a "natural person with an insurable interest" based on the full retired pay * he elected the applicant as the insurable interest beneficiary * a witness signed this form and the form was filed in his official military personnel record 8. Orders P11-929951, issued by the U.S. Army Human Resources Command on 16 November 2010, placed the FSM on the Retired List effective 23 December 2009. 9. The applicant provides: a. A DFAS Summary of Retired Pay Account, dated 18 November 2010, stating the insurable interest person coverage and SBP cost were being deducted from the FSM's retired pay. b. A DFAS-CL Form 7220, dated 22 January 2015, showing NIP SBP costs were being deducted from the FSM's retired pay. c. FSM's death certificate stating he died on 11 April 2015 and the applicant was the informant. d. A letter, dated 29 April 2015, wherein DFAS advised her that their records did not indicate any allotment being deducted from the FSM's retired pay at the time of his death. e. A letter, dated 20 August 2015, wherein DFAS advised her that a review of the FSM's (list his name) retired pay record reflected that he did not elect her for the NIP coverage for the SBP; therefore, she was not eligible for the annuity. She was also advised of her appeal rights. The first paragraph of the letter stated another individual's name, W. C. Isa_, and indicated he was her deceased husband. f. A letter, dated 11 September 2015, wherein in her appeal she advised DFAS that the letter, dated 20 August 2015, erroneously referenced a person whom she had no relation or knowledge of. She also stated the FSM appointed her as his beneficiary on an American Association of Retired Persons life insurance policy, Power of Attorney, and as a beneficiary in his will. His DD Form 2656, dated 26 October 2010, listed her as his beneficiary for unpaid pay and allowances as well as SBP election. His retiree pay account summary indicated the DD Form 2656 was accepted and SBP costs would be withheld. She had been the FSM's caregiver since 2005 and he was a dear friend of her family. g. A letter, dated 15 September 2015, wherein she reiterated her previous statements pertaining to her relationship to the FSM and her beneficiary status. h. A letter, dated 17 September 2015, wherein DFAS advised her that a review of the FSM's retired pay account reflected he did not elect her for the NIP coverage for the SBP. The third paragraph of the letter stated another individual's name, SGT Bur_, and indicated he was her deceased husband. REFERENCES: 1. Public Law 92-425, enacted 21 September 1972, established the SBP. The SBP 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. An election, once made, was irrevocable except in certain circumstances. Since its creation, it has been subjected to a number of substantial legislative changes. 2. Public Law 95-397, enacted 30 September 1978, provided a way for RC members who qualified for Reserve retirement, but were not yet age 60 and eligible to participate in the SBP, to provide an annuity for their survivors should they die before reaching age 60. Three options were available: * Option A – elect to decline enrollment and choose at age 60 whether to start SBP participation * Option B – elect a beneficiary receive an annuity if they die before age 60, but delay payment until the date of the member's 60th birthday * Option C – elect that a beneficiary receive an annuity immediately upon their death, if before age 60 3. Once a member elects either option B or option C in any category of coverage, that election is irrevocable. Option B and C participants do not make a new SBP election at age 60. They cannot cancel SBP participation or change options they had in RCSBP. The options automatically roll into SBP coverage. If RCSBP Option B or C is elected, there is a Reserve cost added to the basic cost of the SBP to cover the additional benefit period and assures protection should the member have died prior to age 60. 4. A member must elect maximum (full) coverage when electing insurable interest coverage (the base amount is the member's gross retired pay). SBP costs for insurable interest coverage are considerably higher than the other SBP beneficiary categories. Costs are 10 percent of the member's gross retired pay plus an additional five percent for each full 5 years the beneficiary is younger than the retiree; however, total costs cannot exceed 40 percent of retired pay. 5. Since 5 October 1994, insurable interest coverage for a beneficiary who is not a former spouse may be arbitrarily discontinued and voluntarily terminated at any time by making a signed written request to do so that identifies a member by name and social security number. Requests to terminate insurable interest may be addressed to DFAS at any time. A member cannot name another insurable interest beneficiary. 6. Effective 17 October 2006, a member may name another insurable interest beneficiary within 180 days following the death of the previous beneficiary by submitting a written request to DFAS. Such an election would become effective the first day of the month following the date DFAS receives the request. The insurable interest coverage will be vitiated (voided) if the member dies before the end of the 2-year period beginning on the effective date of the election. All premiums paid on the new insurable interest beneficiary's behalf will be refunded in a lump-sum payment to the person who would have been the beneficiary had the member lived the required 2 years. 7. Army Regulation 15-185 (ABCMR), the regulation under which this Board operates, states in paragraph 2-5 that the ABCMR will not consider an application until the applicant has exhausted all administrative remedies to correct the alleged error or injustice. DISCUSSION: 1. Upon receipt of his 20-Year letter, the FSM elected enrollment in the RSCBP insurable interest coverage under Option C with his younger brother listed as the beneficiary. This meant in the event he died before reaching age 60, his beneficiary would be entitled to an annuity. He was honorably retired on 23 December 2009, his 60th birthday. 2. The FSM's retiree pay account summary, dated 22 January 2015, stated NIP and SBP costs were being deducted from his retired pay. However, the applicant is only specifically referenced with regard to being his beneficiary for arrears of pay. DFAS twice advised the applicant that the FSM's pay record did not reflect he had elected her for the NIP coverage for the SBP; therefore, she is not eligible for the annuity. 3. The option to terminate his insurable interest coverage remained available to the FSM prior to his death on 11 April 2015. There is no evidence to show he terminated insurable interest coverage for his brother based on his brother's death, which was a necessary pre-condition to naming the applicant as his insurable interest beneficiary. DFAS's occasionally garbled correspondence does not change these basic facts. //NOTHING FOLLOWS// ABCMR Record of Proceedings AR20150000953 Enclosure 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS ABCMR Record of Proceedings (cont) AR20160002721 2 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 1 ABCMR Record of Proceedings (cont) AR20160002721 6 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS Enclosure 2