PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           31 January 2002                   
	DOCKET NUMBER:   AR2001064691

	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	
	Mrs. Nancy Amos		Analyst	

  The following members, a quorum, were present:

	Mr. Raymond V. O’Connor, Jr.		Chairperson	
	Mr. Elzey J. Arledge, Jr.		Member	
	Ms. Regan K. Smith		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 requests, in effect, that the records of her deceased former spouse, a former service member (FSM), be corrected to show he changed his Survivor Benefit Plan (SBP) coverage to former spouse coverage.

3.  The applicant states, through counsel, that the FSM and the applicant were granted a divorce on 16 November 1995.  As part of the Property Settlement Agreement, the applicant was to receive the SBP benefits which were assigned to her on 9 September 1979.  On 8 February 1996, she sent an Application for Former Spouse Payments from Retired Pay, DD Form 2293, to the Defense Finance and Accounting Service (DFAS).  On 5 September 2001, she was informed that no documentation had been received by DFAS to support her claim.

4.  The FSM’s military records show that he was born on 22 August 1929.  The applicant was born in 1936.  After having had prior enlisted service, the FSM was commissioned a second lieutenant in the U. S. Army Reserve in 1950.  He and the applicant married on 8 August 1957.  His notification of eligibility for retired pay at age 60 (his 20-year letter) is dated 26 April 1976.

5.  On 9 September 1979, the FSM signed a Statement of Intent Concerning Participation in (the) Survivor Benefit Plan.  He checked that he elected option C, immediate coverage.  No category of coverage was indicated on this form.  Apparently, this statement of intent was never finalized.  Upon reaching age 60, in 1989, the FSM enrolled in the standard SBP for spouse coverage, full base amount.

6.  On 9 November 1995, the FSM and the applicant entered into a Property Settlement Agreement. The Agreement assigned the applicant a pro rata share of the FSM’s retired pay.  It also stated that it was understood by the parties that the SBP was in effect and such survivorship benefits inured to the benefit of the applicant.  It was further acknowledged by the parties that the applicant had one year to transfer these benefits from “spouse” to “former spouse” status and that the applicant would arrange with DFAS for payment.  They divorced on             16 November 1995 and the Property Settlement Agreement was incorporated into the decree.  On 7 February 1996, a Qualified Domestic Relations Order reiterated that the applicant was entitled to the SBP and would specifically request the same and that any expense associated with the change would be paid solely from her respective share.

7.  On 8 February 1996, the applicant filed a DD Form 2293 for direct payment of her portion of the FSM’s retired pay and provided DFAS a copy of the divorce decree, Property Settlement Agreement, and Qualified Domestic Relations Order.  

8.  In May 1996, the FSM was refunded SBP premiums retroactive to the date of the divorce.

9.  The FSM died on 22 August 2001.  The death certificate indicates that he was divorced.  Records at DFAS indicate that no one has filed a claim for the SBP annuity.

10.  Apparently, the applicant remarried on 23 August 1997 at approximately age 61.

11.  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.  To retain annuity eligibility, a surviving spouse cannot remarry before age 55.  

12.  Public Law 95-397, the Reserve Component SBP (RCSBP), enacted           30 September 1978, provided a way for those who had qualified for reserve retirement but were not yet age 60 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.  

13.  Public Law 97-252, the Uniformed Services Former Spouses Protection Act (USFSPA), dated 8 September 1982, established SBP for former military spouses for retiring members.  This law also decreed that state courts could treat military retired pay as community property in divorce cases if they so chose.  It established procedures by which a former spouse could receive all or a portion of that court settlement as a direct payment from the service finance center.

14.  Public Law 98-94, dated 24 September 1983, established former spouse coverage for retired members (Reservists, too).

15.  Public Law 99-661, dated 14 November 1986, permitted divorce courts to order SBP coverage (without the member’s agreement) in those cases where the retiree had elected spouse coverage at retirement or was still on active duty and had not yet made an SBP election.

16.  Title 10, U. S. Code, section 1448(b)(3) incorporates the provisions of the USFSPA relating to the SBP.  It permits a person who, incident to a proceeding of divorce, is required by court order to elect to provide an annuity to a former spouse to make such an election.  Any such election must be written, signed by the person making the election, and received by the Secretary concerned within one year after the date of the decree of divorce.  If that person fails or refuses to make such an election, section 1450(f)(3)(A) permits the former spouse concerned to make a written request that such an election be deemed to have been made.  Section 1450(f)(3)(C) provides that an election may not be deemed to have been made unless the request from the former spouse of the person is received within one year of the date of the court order or filing involved.

17.  Information received from DFAS on 17 January 2002 indicates that DFAS would never take all of the SBP costs from the former spouse no matter what the divorce decree ordered.  If the former spouse was awarded a portion of the FSM’s retired pay, DFAS would take the appropriate percentage of the costs from each share of his retired pay.  If the former spouse did not get a portion of the FSM’s retired pay, all costs would have to come out of his retired pay.

CONCLUSIONS:

1.  It appears the FSM never finalized his enrollment in the RCSBP by designating a category of coverage; however, that is immaterial in this case.  The evidence of record shows that he enrolled in the standard SBP upon his reaching age 60.

2.  The Property Settlement Agreement, Qualified Domestic Relations Order, and divorce decree all stated that the applicant would remain as the SBP beneficiary. She was inappropriately ordered to pay all costs by making payment arrangements with DFAS.  DFAS would not have accepted that arrangement.  Most likely an amended order would have been required to make arrangements for her to pay the FSM the portion of premiums DFAS would have deducted from his portion of his retired pay.  She was appropriately informed that she had one year to change the SBP coverage from “spouse” to “former spouse” (requesting a deemed election).  Unfortunately, it appears she was not informed of the proper way to request this change.  She had to make the request for the deemed election in writing.  Submitting a claim for her portion of the FSM’s retired pay was a separate action.  Simply submitting the divorce decree and related documents to DFAS is not considered a written request for a deemed election.

3.  It would be in the interest of equity to now show that the applicant made a proper request for a deemed election of the SBP within one year of the divorce.  Since SBP costs had been refunded to the FSM, and since the applicant was required to pay the costs of the SBP anyway, it would also be equitable to have her now repay any costs due.

4.  In view of the foregoing, the applicant’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 the applicant submitted a written request for a deemed election of the SBP on 8 February 1996 and that it was received and processed in a timely manner by the appropriate office.

2.  That the applicant be advised that the Defense Finance and Accounting Service will be instructed to collect any SBP costs due.  

3.  That the applicant be paid an annuity based upon her request for a deemed election retroactive to 22 August 2001, the date of the FSM’s death.

BOARD VOTE:  

__rvo___  __eja___  __rks___  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		Raymond V. O’Connor, Jr.
		______________________
		        CHAIRPERSON

INDEX

CASE ID	AR2001064691	
SUFFIX		
RECON		
DATE BOARDED	20020131	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	(GRANT)	
REVIEW AUTHORITY		
ISSUES         1.	137.04	
2.		
3.		
4.		
5.		
6.