PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           3 October 2002
	DOCKET NUMBER:   AR2002074802

	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:

	Ms. Irene N. Wheelwright		Chairperson	
	Mr. Walter T. Morrison		Member	
	Mr. Charles Gainor		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 that his enrollment in the Survivor Benefit Plan (SBP) be cancelled as of the date it was reinstated or that the amount he owes be waived.

3.  The applicant states that they recently enrolled in the SBP.  They married in July 1997.  However, they were never informed about the payback requirement for this coverage.  They were further informed that his spouse would be entitled to receive only 35 percent of his current retired pay.  While they are not disputing the amounts, they are very concerned and upset that they were never informed of this prior to their enrollment.  If they had had this information prior to their enrollment, they would never have chosen to enroll.  He provides his 23 April 2002 Retiree Account Statement and a 17 April 2002 letter from the Defense Finance and Accounting Service (DFAS) – Cleveland Center stating he was overpaid in the amount of $2,371.08 due to owing SBP premiums retroactive 
to 1 August 1998 as supporting evidence.  His spouse has concurred in his request to terminate the SBP.

4.  The applicant's military records show that he was born on 19 July 1930.  After having had prior enlisted service, he was commissioned in the Army National Guard in 1953.  He transferred to the U. S. Army Reserve in 1971.  His notification of eligibility for retired pay (his 20-year letter) is dated 13 January 1978.  He applied for retired pay around March 1990.  On 30 March 1990, he completed a Data for Payment of Retired Army Personnel, DA Form 4240, enrolling in the SBP for spouse only coverage, full base amount.  The reverse of the form contains the information, “NOTE:  YOUR SBP ELECTION IS PERMANENTLY IRREVOCABLE…”  Helen was his spouse at the time.  He retired in the rank of lieutenant colonel.

5.  The applicant divorced on an unknown date and apparently his SBP coverage was suspended.  He apparently married Shirley in July 1997 but evidently did not notify DFAS of his remarriage until several years later, probably around March 2002.  His SBP was restarted in April 2002 and DFAS informed him that back premiums were due retroactive to 1 August 1998, the one-year anniversary date of his remarriage.

6.  Public Law 92-425, the SBP, enacted 21 September 1972, provided that military members could elect to have their retired pay reduced to provide for an annuity after death to surviving dependents.  Elections are made by category, not by name.  Changes in SBP options are not authorized except in specific instances as authorized by law.

7.  Public Law 94-496, enacted 14 October 1976 but effective 1 October 1976, provided for spouse costs to be suspended if marriage ends in death or divorce. 

8.  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.  

9.  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.  

CONCLUSIONS:

1.  There is no evidence of Government error or injustice in this case.

2.  The evidence of record shows that the applicant enrolled in the SBP in March 1990.  He was informed (at least by the NOTE on the DA Form 4240 if not by the SBP counselor) that his election was irrevocable.  As a senior commissioned officer, he had a responsibility to himself to notify, at the time of his remarriage in July 1997, retired pay operations that he remarried.  If he had done so, his SBP would have resumed at the one-year anniversary of the marriage (unless he elected within that first year not to resume coverage) and he would have begun to pay the SBP premiums immediately.  He would not have owed 4 years of back premiums.  In addition, had he died during that time, his spouse would have been eligible to receive the SBP annuity.

3.  Because the SBP is a Government subsidized program, it was always meant to provide a survivor 55 percent of a member’s retired pay only until the survivor reached age 62.  At that time, the annuity would drop to 35 percent but Social Security would pick up the remaining 20 percent.  It appears that neither he nor his spouse, both of whom were over age 62 when they married, understood that the annuity would be at the reduced (35 percent) over-62 rate.

4.  However, it appears that the applicant is not in good health.  The applicant's spouse concurs in his decision to cancel the SBP and understands that she thereby waives any future property rights to the SBP.  It would be in the interest of compassion to correct his records to show that he requested not to resume spouse coverage at the time he remarried. 
5.  In view of the foregoing, the applicant’s records should be corrected as recommended below.

RECOMMENDATION:

That all of the Department of the Army records related to this case be corrected by showing that the applicant requested on 1 August 1997 not to resume his spouse SBP coverage.  

BOARD VOTE:  

__INW__  __WTM__  __CG  __  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		  ___Irene N. Wheelwright___
		           CHAIRPERSON

INDEX

CASE ID	AR2002074802	
SUFFIX		
RECON	YYYYMMDD	
DATE BOARDED	2002/10/03	
TYPE OF DISCHARGE	(HD, GD, UOTHC, UD, BCD, DD, UNCHAR)	
DATE OF DISCHARGE	YYYYMMDD	
DISCHARGE AUTHORITY	AR . . . . .  	
DISCHARGE REASON		
BOARD DECISION	FULL GRANT	
REVIEW AUTHORITY		
ISSUES         1.	137.0000	
2.		
3.		
4.		
5.		
6.