MEMORANDUM OF CONSIDERATION

	IN THE CASE OF:   

	BOARD DATE:           10 February 2000                   
	DOCKET NUMBER:   AR1999030137

	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.

	Mrs. Nancy Amos		Analyst	

  The following members, a quorum, were present:

	Mr. Van B. Cunningham		Chairperson	
	Mr. James P. Steuve		Member	
	Mr. Kenneth L. Wright		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 his records be corrected to show he did not elect Supplemental Survivor Benefit Plan (SSBP) coverage.

APPLICANT STATES:  That in completing the DARP Form 3855 electing SSBP he was given no counseling or advance information of the plan.  He was misled to believe there would be an offset in his wife’s social security when she is eligible to draw her spousal social security.  The Social Security Administration has provided him information that, while a governmental pension causes an offset against a social security benefit in certain circumstances, an exception is any military service employee whose governmental pension is based on work covered by Social Security on the last day of employment.  He fits into that exception category.

EVIDENCE OF RECORD:  The applicant's military records show:

He was born on 12 March 1936.  On 26 October 1987, he elected to participate in the Reserve Component SBP (RCSBP) for spouse and children coverage, option B, full base amount.

On 13 November 1992, the applicant elected SSBP at the 20 percent coverage level.  The instructions on the reverse of DARP Form 3855, Open Enrollment Election Certificate, SSBP, RCSBP, clearly state “Reserve soldiers who were retirement eligible after October 1, 1985, will have their spouse’s annuity offset based on the two-tier system.  Under this system, the annuity is reduced from 55 percent of the base amount to 35 percent, after the spouse reaches age 62.  Participation in the Supplemental Survivor Benefit Plan allows the member’s spouse to retain the annuity at or up to the 55 percent level, after the spouse has reached their 62nd birthday.  There is an additional cost for electing coverage under this plan.  If you do not understand the above, please contact our office for additional information.  The decision you make regarding supplemental coverage is IRREVOCABLE.”

On 12 June 1995, the applicant completed DD Form 2656, Data for Payment of Retired Personnel electing SBP coverage for insurable interest coverage (his spouse was named) and not electing SSBP.  However, this election was invalid as he had already elected RCSBP coverage.

The applicant’s monthly SBP costs were increased by approximately $48.00 to a total of approximately $72.00 as a result of his SSBP election.

Public Law 92-245, 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.

Public Law 95-397, the RCSBP, enacted 30 September 1978, provided a way for those who had qualified for reserve retirement but were not yet age 60 (and participate in SBP), to provide an annuity for their survivors should they die before reaching age 60.  Three options are available:  (A)  elect to decline enrollment and choose at age 60 whether to start SBP participation; (B)  elect that a beneficiary receive an annuity if they die before age 60 but delay payment of it until the date of the member’s 60th birthday; (C)  elect that a beneficiary receive an annuity immediately upon their death if before age 60.  Once a member elects either Options B or 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 – it automatically rolls into SBP coverage.  If RCSBP Option B or C is elected, there is a Reservist Portion cost added to the basic cost of the SBP to cover the additional benefit and assured protection should the member have died prior to age 60.

Public Law 101-189, enacted 29 November 1989, established the SSBP (effective 1 October 1991) with a one-year open enrollment period to begin         1 October 1991.  The SSBP annuity (5, 10, 15 or 20 percent of full retired pay) would be paid in addition to the standard 35 percent-tier payment for surviving spouses age 62 and older.  Public Law 101-510, enacted 5 November 1990, delayed the implementation of the open enrollment and SSBP until 1 April 1992.

The SBP Counselor Training Manual briefs that “The Subcommittee believes that the government meets its obligation to survivors in part through the provision of Social Security, to which it contributes as an employer; and Social Security, therefore, is the foundation on which the subcommittee recommends building a new program” (House Armed Services Committee, Public Law 91-66, 1 October 1970, “Report of Special Subcommittee on Survivor Benefits”).  SBP provides a survivor 55 percent of a participant’s military retired pay.  The after-62 benefit amount drops to 35 percent of the retired pay because Social Security is meant to provide the additional coverage to bring the survivor support level back up to the 55 percent level.  SSBP provides a means to increase the after-62 benefit to 40, 45, 50 or 55 percent of the retired pay.  It is not a government subsidy.

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.  It was the applicant’s responsibility as a senior non-commissioned officer to completely read the DARP Form 3855 prior to completing and signing it.  If he did not understand any of the information on the form, instructions were for him to request additional information because the decision he would make regarding supplemental coverage would be irrevocable.

2.  Moreover, the applicant misunderstands the SBP two-tier system.  His wife’s social security benefit is not offset upon her reaching age 62; her SBP annuity is reduced to 35 percent of the base amount.  (It is not SBP participation that results in a loss of Social Security entitlement but rather a spouse’s/surviving spouse’s government pension (if under a non-Social Security contributing retirement system)).  The government subsidizes the SBP and the subsidy is received in two forms – cost savings (paying for a 35 percent benefit with a 55 percent benefit being received, at least through age 62) and tax savings (through tax-free premiums).

3.  The extract from the Social Security Administration document the applicant has provided reads “a governmental pension causes an offset against a social security benefit in certain circumstances.”  The applicant should note that it refers to a social security benefit.  The SBP is not a social security benefit so the rule and the exception do no apply.

4.  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

__vbc___  __jps___  __klw___  DENY APPLICATION

Karl F. Schneider
Director, Army Review Boards Agency

INDEX

CASE ID	AR1999030137	
SUFFIX		
RECON		
DATE BOARDED	20000210	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(DENY)	
REVIEW AUTHORITY		
ISSUES         1.	137.00	
2.		
3.		
4.		
5.		
6.