RECORD OF PROCEEDINGS

IN THE MATTER OF:	DOCKET NUMBER:  BC-2021-03345

XXXXXXXXXXXXXXX	COUNSEL:  NONE
	
	HEARING REQUESTED:  YES

APPLICANT’S REQUEST

Her election of benefits under the Survivor Benefit Plan (SBP) be changed.  Specifically, to terminate participation in the SBP.

APPLICANT’S CONTENTIONS

In 2007, she elected to add her son, a 20-year old college student, to her SBP with the understanding that he would no longer qualify once he turned 21.  She was under the impression that the SBP would last for those remaining months and would automatically end.  Upon retirement and receipt of her first check, she discovered that SBP was being withdrawn from her check.  She assumed someone had not realized he was an adult child and not her spouse, so she completed an SBP termination request form and submitted it for personnel action.  She later received communication from the Defense Accounting and Finance Service (DFAS) instructing her that the dependent could not be removed, nor the payments stopped.  She had no idea the SBP would continue after her son’s eligibility expired.  Now she is paying for a benefit her child will never receive, with an inability to terminate.

The applicant’s complete submission is at Exhibit A.

STATEMENT OF FACTS

The applicant is a retired Air Force Reserve major (O-4) receiving retired pay.

On 20 Oct 01, ARPC/DPPR sent the applicant the standard notification of eligibility for retired pay (20-year letter) informing her that she has completed the required years under the provisions of Title 10 United States Code, Section 12731 (10 U.S.C § 12731), and entitled to retired pay upon application prior to age 60.  In addition, she was eligible to participate in the RCSBP and should receive detailed RCSBP information by certified mail within 60 days.  The RCSBP information included instructions to reply within 90 days of receipt.  

On 11 Jan 02, according to ARPC Form 123, Reserve Component Survivor Benefit Plan Election Certificate, dated 11 Jan 02, the applicant elected Option C, Immediate Annuity, Child(ren) Only, based on full retired pay.

On 16 May 05, according to DD Form 93, Record of Emergency Data, provided by the applicant, she had a dependent son.

On 15 Jun 07, according to Reserve Order XXXXX, dated 26 Apr 07, the applicant was assigned to the Retired Reserve Section and placed on the Air Force Reserve Retired List.  

On 28 Jun 22, according to applicant’s (RC)SBP Information screenshot, provided by DFAS, the applicant is paying RCSBP premiums only.  No premiums are being charged for SBP.

For more information, see the excerpt of the applicant’s record at Exhibit B and the advisory at Exhibit C.

APPLICABLE AUTHORITY

10 U.S.C. § 1448(a)(2)(B).  “Participants in the plan.  The Plan applies to the following persons, who shall be participants in the Plan: … Reserve-component annuity participants.  A person who (i) is eligible to participate in the Plan under paragraph (1)(B), and (ii) is married or has a dependent child when they are notified under section 12731(d) of this title that they have completed the years of service required for eligibility for reserve component retired pay, unless the person elects (with their spouse's concurrence, if required under paragraph (3)) not to participate in the Plan before the end of the 90-day period beginning on the date on which they receive that notification.”  

DoD 7000.14-R, Volume 7B, paragraph 540402.  “A member electing to participate must designate an immediate election, a deferred election, or indicate a decision to delay the election until reaching retirement age. These are described as Options A, B, or C.” 

DoD 7000.14-R, Volume 7B, Chapter 54, Section 2.0, Definitions of Specialized Terms:

2.11. SBP Premium.  SBP Premium is the combination of the “Standard Premium,” the “Reserve Component Premium,” and the “Survivor’s Annuity Premium Deduction.” 

2.12. Standard Premium.  Standard Premium is the reduction in retired pay made to provide the member with SBP coverage for the period after a member becomes entitled to retired pay. The Standard Premium is described in Chapter 45. It is distinct and separate from the Reserve Component Premium and the Survivor’s Annuity Premium Deduction which are described in paragraphs 2.13 and 2.14.

2.13. Reserve Component Premium.  When a Reserve member participates in the RCSBP after first becoming eligible based on 20 qualifying years of satisfactory service, coverage for the member’s survivors commences but premiums are not paid until the member first becomes actually entitled to retired pay (usually age 60).  At that time, reductions in the member’s retired pay are made that are specifically related only to the RCSBP coverage that was already provided while the member awaited the requisite age of entitlement to retired pay. These reductions are the Reserve Component Premium. They are made after the member begins receiving retired pay for the RCSBP coverage that was provided before the member received retired pay. They are distinct from the Standard Premium (in paragraph 2.12) which are reductions made for the SBP coverage that is provided after the member becomes entitled to retired pay. They are also distinct from the Survivor’s Annuity Premium Deduction.

DoD 7000.14-R, Volume 7B, Chapter 54, Table 54-1. Reserve Component Premiums for Spouse, Former Spouse, and Child Only Coverage. Reserve Component Survivor Benefit Program (RCSBP) does not suspend RCSBP premiums when a dependent child becomes ineligible due to age/marriage.  If the member made the RCSBP election (Options B or C) when first eligible to participate in the RCSBP (Child Only Coverage), and at the time the member met the age and service requirements to become actually entitled to receive retired pay, then the below listed Reserve Component Premium deductions will be made from the member’s retired pay:  child premium deductions will be made until earlier of: (a) the first day of the month in which all of the children for whom RCSBP child only coverage was previously provided are no longer eligible due to death, or (b) the first day of the month following the month in which the member has retired pay reduced for a total of 360 months.  As long as one of the children for whom RCSBP coverage was provided is still living, premium deductions will be made until member has retired pay reduced for a total of 360 months.  The child only deductions are made even after the child(ren)’s eligibility is lost due to age or marriage.

AIR FORCE EVALUATION

ARPC/DPTT recommends granting the application.  The applicant is only responsible for RCSBP premiums for up to 360 months of receiving retired pay.  The applicant should not be charged for SBP coverage, as the standard premiums are to be suspended.  On 13 Jun 01, the applicant completed 20 years satisfactory service; however, the RCSBP Notification of Eligibility takes approximately 120 days for members to receive as there is a delay in the Point Credit Summary to reflect 20 satisfactory years in record.  On 11 Jan 02, the applicant signed and submitted ARPC Form 123, electing Option C.  Children are only eligible to receive annuity up to the age of 18 (or up to age 22 if they are a full-time student and unmarried).  Additionally, a disabled child that is unable to support themselves due to their disability can receive annuity for life.  In accordance with DoDFMR, Volume 7B, Chapter 54, if a member enrolls into Option C for RCSBP and the child ages out while the member has not yet reached retired pay age, the member will have reserve component premiums deducted from their retired pay until the earlier of the first day of the month in which all the children for whom RCSBP child coverage was previously provided are no longer eligible due to death, or the first day of the month following the month in which the member has retired pay reduced for a total of 360 months.  To paraphrase, the child only RCSBP premium deductions are made even after the child or children’s eligibility is lost due to age or marriage.

In accordance with DoDFMR, Chapters 44-46, if the member has no eligible dependent children once the member becomes eligible to receive their retired pay, and they did not change their election from child only coverage, the member will be automatically enrolled in child SBP coverage; however, any standard premiums for SBP are suspended.

The complete advisory opinion is at Exhibit C.

APPLICANT’S REVIEW OF AIR FORCE EVALUATION

The Board sent a copy of the advisory opinion to the applicant on 22 Jun 22, for comment (Exhibit D), but has received no response.

FINDINGS AND CONCLUSION

1.  The application was timely filed.

2.  The applicant exhausted all available non-judicial relief before applying to the Board.

3.  After reviewing all Exhibits, the Board concludes the applicant is not the victim of an error or injustice.  While the Board notes the comments of ARPC/DPTT in favor of granting relief, the Board believes a preponderance of the evidence fails to substantiate the applicant’s contentions.  Per DFAS, the applicant’s retired pay is not being reduced for payment of the SBP standard premiums, but instead is being reduced for Reserve Component premiums under the RCSBP.  These are two separate and distinct programs with guidance specific to each program.  The applicant elected to participate in the RCSBP, Option C, Immediate Annuity, Child(ren) Only, and the premiums for this coverage continue to accrue in accordance with DoD 7000.14-R, Volume 7B, Chapter 54.  Therefore, the Board recommends against correcting the applicant’s records.

4.  The applicant has not shown a personal appearance, with or without counsel, would materially add to the Board’s understanding of the issues involved.

RECOMMENDATION

The Board recommends informing the applicant the evidence did not demonstrate material error or injustice, and the Board will reconsider the application only upon receipt of relevant evidence not already presented.

CERTIFICATION

The following quorum of the Board, as defined in Air Force Instruction (AFI) 36-2603, Air Force Board for Correction of Military Records (AFBCMR), paragraph 1.5, considered Docket Number BC-2021-03345 in Executive Session on 21 Jul 22:

, Panel Chair
, Panel Member
, Panel Member

All members voted against correcting the record.  The panel considered the following:

Exhibit A:	Application, DD Form 149, w/atchs, dated 4 Oct 21.
Exhibit B:	Documentary Evidence, including relevant excerpts from official records.
Exhibit C:	Advisory, ARPC/DPTT, dated 21 Jun 22.
Exhibit D:	Notification of Advisory, SAF/MRBC to Applicant, dated 22 Jun 22.

Taken together with all Exhibits, this document constitutes the true and complete Record of Proceedings, as required by AFI 36-2603, paragraph 4.11.9.