PROCEEDINGS

	IN THE CASE OF:  

	BOARD DATE:           17 September 2002
	DOCKET NUMBER:   AR2002074969

	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:

	Mr. Elzey J. Arledge, Jr.		Chairperson	
	Mr. Thomas B. Redfern, III		Member	
	Ms. Karen A. Heinz		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, through counsel, that the records of her former spouse, a former service member (FSM), be corrected to show she requested a deemed election of his Survivor Benefit Plan (SBP), that he designated her as the beneficiary for his Servicemen's Group Life Insurance (SGLI), and that he converted the SGLI to Veterans' Group Life Insurance (VGLI) with her as the beneficiary.

3.  The applicant states, through counsel, that the settlement agreement, which was incorporated into the 29 July 1999 divorce decree, required the FSM to elect former spouse SBP coverage.  Subsequent to the divorce, she submitted an Application for Former Spouse Payments from Retired Pay on 11 August 1999.  The Defense Finance and Accounting Service (DFAS) acknowledged receipt of the application and advised her that if her decree specified that she was to be designated as a former spouse SBP beneficiary, she must make a deemed election within one year of the divorce.  She mailed her deemed election on        9 November 1999 to DFAS.  However, she was informed in November 2001 that DFAS never received her request and it was too late to accept her request.  She
then requested the FSM make the proper election prior to his retirement on       31 December 2001.  He, however, failed to do so and she filed a Motion to Enforce.  She later learned that the FSM designated his current spouse as the beneficiary for both the SBP and the SGLI even though she kept her bargain under the parties' agreement to pay the premiums to keep his SGLI in force.  

4.  The FSM’s military records show that he was born on 1 December 1941.  After having had prior service in an enlisted status in the Regular Army, U. S. Army Reserve, and Army National Guard, he was commissioned in the Army National Guard in August 1972.  He entered the U. S. Army Reserve in August 1974.  He and the applicant married on 29 November 1985.

5.  The FSM's notification of eligibility for retired pay at age 60 (his 20-year letter) is dated 15 March 1989.  On 25 May 1989, he completed a Survivor Benefit Plan Election Certificate, DD Form 1883, and elected to participate in the Reserve Component SBP (RCSBP) for spouse only coverage, full base amount, option C.

6.  The FSM and the applicant divorced on 29 July 1999.  The settlement agreement stated that the FSM agreed to maintain his SGLI with the applicant as beneficiary and to convert the same to VGLI or a commercial equivalent.  The applicant would be responsible for payment of any premiums.  It also stated that the FSM signed a DD Form 1883 in May 1989 in which he elected to provide an annuity for the applicant and he would not change the certificate at any time in the future.

7.  On 1 September 1999, the applicant's attorney forwarded an Application for Former Spouse Payments from Retired Pay to DFAS.  On 1 October 1999, DFAS acknowledged receipt of the application and further informed her that, if the divorce decree specified that she was to be designated as a former spouse beneficiary for the SBP, she must make a deemed election for SBP coverage within one year of the date of the divorce.  She was to address the request to DFAS - Cleveland Center, PO Box 99191.

8.  On 9 November 1999, the applicant addressed a request for a deemed  election of the SBP to DFAS - Cleveland Center, PO Box 998002.

9.  The FSM remarried on 9 December 1999.

10.  On 21 September 2001, the FSM completed a Data for Payment of Retired Personnel, DD Form 2656.  In section IX, he indicated that he elected SBP coverage for spouse only.  

11.  On 2 April 2002, in response to an inquiry from the applicant's Congressional Representative, DFAS indicated that they had no record of receiving the             9 November 1999 request for a deemed election.

12.  On 23 April 2002, the FSM was found to be in contempt of court for his failure to comply with a court order dated 11 April 2002 which ordered him to assign his interest in his SGLI to the applicant.

13.  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.  

14.  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 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.  

15.  Public Law 97-252, the Uniformed Services Former Spouses Protection Act (USFSPA), dated 8 September 1982, established SBP coverage for former spouses of retiring members.  

16.  Public Law 98-525, enacted 19 October 1984, provided that a former spouse could request a deemed election within one year of the court order requiring SBP to be established on the former spouse’s behalf provided the member agreed to provide coverage.

17.  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 member was participating in the SBP or was still on active duty and had not yet made an SBP election.

18.  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.

19.  The SGLI and VGLI programs are Department of Veterans Affairs programs. Only certain portions of the SGLI program, such as preparing the VA Form       29-8286 and collecting premiums, are administered by the military services.  SGLI is in effect for 120 days after an individual separates from active duty or the Reserves.  Individuals entitled to SGLI coverage can convert to VGLI by submitting the premium within 120 days after separating.  After 121 days, the individual may be granted VGLI provided an initial premium and evidence of insurability are submitted within one year after termination of the individual's SGLI coverage.  VGLI provides renewable five-year term coverage.

CONCLUSIONS:

1.  The applicant's settlement agreement directed she remain the FSM's SBP beneficiary.  The wording of the agreement (that the FSM would not change the election certificate at any time in the future) may not have been clear as, in order to implement the agreement, he was required to change his coverage.  The settlement agreement also directed she be made the FSM's SGLI and VGLI (or commercial equivalent) beneficiary.  In April 2002, the FSM was held in contempt for failing to comply with several court orders concerning the SGLI.

2.  Even though the FSM should not have made a new SBP election at the time he turned age 60, it appears it was the FSM's clear intent NOT to implement the settlement agreement when he elected to provide for spouse, not former spouse, coverage when he completed the DD Form 2656.  Nevertheless, the applicant herself had taken steps to request a deemed election within the one-year time frame required by law.  It appears she sent it to the right agency (DFAS - Cleveland Center) but the wrong post office box.  Even so, she sent it to the Service Secretary within the proper time frame.  It would be equitable to now show that the appropriate office received that request in a timely manner.

3.  The SBP statute allows a former spouse to directly modify the designation of the beneficiary when a divorce decree mandates the continuation of SBP coverage in favor of the former spouse.  In this case, the applicant properly invoked the mechanism for a "deemed election."  For reasons unknown, DFAS did not act on the request in a timely manner.  Through Government error, the FSM was able to deprive the applicant of her property interest in the SBP.  The Government may correct its own error without the consent of the FSM.

4.  The SGLI statutes, however, do not contain provisions to allow a former spouse to directly obtain compliance with provisions of a divorce decree that require continued coverage under SGLI.  Although the FSM appears to have deprived the applicant of the SGLI coverage mandated by the divorce decree, the applicant must seek enforcement of those provisions in a court that holds jurisdiction over the matter.  She did, in fact, obtain a court order compelling the FSM to comply with the divorce decree, and normally the Board and DFAS would honor that order with regard to the SGLI.  However, the FSM has now been separated from active duty for more than 120 days.  The SGLI is no longer in effect and the FSM may or may not have converted it to VGLI.  The VGLI is not an Army program and the Board has no authority to direct the VA to change its records.  The applicant might consider providing the VA (or a civilian insurance company, if applicable) with a copy of the court orders and this Board action and attempt to work with that agency to effect the change. 

5.  In view of the foregoing, the FSM’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 made a written request for a deemed election of the FSM's RCSBP on 9 November 1999, that her request was received and processed by the appropriate office in a timely manner, and that the FSM's records were adjusted at the time he reached age 60 on 1 December 2001 to reflect he had former spouse SBP coverage.

2.  That so much of the application as is in excess of the foregoing be denied.

BOARD VOTE:  

__EJA__  __TBR___  ___KAH__  GRANT AS STATED IN RECOMMENDATION

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

		___Elzey J. Arledge, Jr.   _
		        CHAIRPERSON

INDEX

CASE ID	AR2002074969	
SUFFIX		
RECON		
DATE BOARDED	2002/09/17	
TYPE OF DISCHARGE		
DATE OF DISCHARGE		
DISCHARGE AUTHORITY		
DISCHARGE REASON		
BOARD DECISION	partial	
REVIEW AUTHORITY		
ISSUES         1.	137.04	
2.	100.00	
3.		
4.		
5.		
6.