BOARD DATE: 1 September 2020 DOCKET NUMBER: AR20190015034 APPLICANT REQUESTS: election into the Survivor Benefit Plan (SBP). APPLICANT'S SUPPORTING DOCUMENTS CONSIDERED BY THE BOARD: * DD Form 149 (Application for Correction of Military Record) FACTS: 1. The applicant states he would like to elect into the SBP and is willing to pay the premiums from 1 August 2018 (his placement of the retirement list) to present. He has a Department of Veterans Affairs (VA) disability rating of 100 percent and understands upon his death, he would be covered by the Dependency and Indemnity Compensation (DIC) benefits, and coverage by the SBP and DIC is not allowed simultaneously. He also states his wife was not formally counseled on SBP and only discussed it with him prior to her signing the paperwork. 2. After serving a period of enlisted service, the applicant was appointed as a Reserve commissioned officer in area of concentration 63A (General Dentist) in the Dental Corps and was ordered to active duty on 16 July 1988. Subsequently, he was promoted to the rank of colonel (COL)/O-6 on 1 October 2006. 3. A DD Form 2656 (Data for Payment of Retired Personnel) shows the applicant was married to his spouse in 2007, had no children, and with an "X" and his initials marked the following statement, "I elect not to participate in SBP." He and his spouse signed the form, in front of a notary, on 20 July 2018. With her signature, she attested to the following statements: * I hereby concur with the Survivor Benefit Plan election made by my spouse * I have received information that explains the options available and the effects of those options * I know that retired pay stops on the day the retiree dies * I have signed this statement of my free will 4. The applicant was honorably retired on 31 July 2018. The DD Form 214 (Certificate of Release or Discharge from Active Duty) shows he completed 30 years and 15 days of net active service in the rate/grade of COL/O-6. 5. Public Law 92-425, the SBP 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. 6. Title 10, USC, section 1448, provides for automatic enrollment for spouse coverage at the full base amount unless a member affirmatively declined to participate in the SBP prior to receiving retired pay. The statute also requires written concurrence by the spouse in a member's decision to decline the SBP or elect spouse coverage at less than the full base amount. 7. Periodically, Congress authorizes an Open Season to allow retirees certain changes to their SBP participation or non-participation. The last Open Season was authorized by The National Defense Authorization Act for Fiscal Year 2005; thereby, establishing an Open Season for enrollment to be conducted from 1 October 2005 through 30 September 2006. 8. DIC is a tax-free monetary benefit paid to the eligible survivors of military Service members who dies in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury of disease. BOARD DISCUSSION: 1. After review of the application and all evidence, the Board determined there is insufficient evidence to grant relief. The applicant’s contentions were carefully considered. Public law provides a suspense for changing a SBP election after retired pay is started. 2. There is insufficient evidence of error in the applicant’s election at time of retirement. Both he and his wife elected not to participate in the SBP. The Board cannot assume he and his wife were not properly counseled as SBP elections are required when members request to start retirement pay. ? BOARD VOTE: Mbr 1 Mbr 2 Mbr 3 : : : GRANT FULL RELIEF : : : GRANT PARTIAL RELIEF : : : GRANT FORMAL HEARING : X :X :X DENY APPLICATION BOARD DETERMINATION/RECOMMENDATION: The evidence presented does not demonstrate the existence of a probable error or injustice. Therefore, the Board determined the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned. I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case. REFERENCES: 1. Public Law 92-425, enacted 21 September 1972, established the SBP. The SBP 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. An election, once made, was irrevocable except in certain circumstances. Elections are made by category, not be name. Since its creation, it has been subjected to a number of substantial legislative changes. 2. Title 10, U.S.C., section 1448, provides for automatic enrollment for spouse coverage at the full base amount unless a member affirmatively declined to participate in the SBP prior to receiving retired pay. The statute also requires written concurrence by the spouse in a member's decision to decline the SBP or elect spouse coverage at less than the full base amount. 3. The last Open Season was established by The National Defense Authorization Act for Fiscal Year 2005 establishing an Open Season for enrollment to be conducted from 1 October 2005 through 30 September 2006. a. The retiree must pay monthly premiums starting on the date of enrollment and a buy-in premium covering all the costs that would have been paid for the election if it had been made at the first opportunity to do so. It is unknown when Congress will authorize a future Open Season. b. Extensive publicity was given in Army Echoes, the Army's retirement newsletter. Army Echoes also warned that for a retiree with a high number of years since first being able to enroll a beneficiary in the SBP and whose retired pay was high, the enrollment premium alone could be substantial. 4. DIC is a tax-free monetary benefit paid to the eligible survivors of military Service members who dies in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury of disease. 5. The Defense Finance and Accounting Service website provides the following information pertaining to SPB, DIC, and Special Survivor Indemnity Allowance (SSIA): a. The Survivor Benefit Plan (SBP) was created to provide financial support to military spouses and/or children when a military member dies while on active duty or after retirement. SBP provides eligible beneficiaries with a monthly payment known as an annuity. The recipient of an SBP annuity is referred to as the annuitant. The amount of the SBP benefit is a percentage of retired pay. The percentage depends upon whether the member chooses full or reduced coverage at the time of election (generally at retirement or at 20-year qualification). SBP provides up to 55 percent of a service member's retired pay to an eligible beneficiary upon the death of the member. After the service member passes away, the SBP annuity is paid out monthly to the surviving spouse, or to the child or children of the member. b. Dependency and Indemnity Compensation (DIC) is a monetary benefit offered by the Department Of Veterans Affairs (VA). Spouse SBP annuitants, except for those who remarry after age 57 (or in other specific circumstances), cannot receive full SBP and DIC at the same time (DIC payments made directly to children, or to a guardian on behalf of children, do not affect SBP child annuity payments). When the VA informs DFAS that a spouse annuitant is receiving DIC, the law requires that DFAS deduct the amount of DIC received from the amount of SBP payable and pay the remaining amount of the SBP to the annuitant. This is called the SBP/DIC offset. For example, if an annuitant receives a monthly SBP annuity of $500 from DFAS and becomes eligible to receive a monthly DIC award of $400 from the VA, DFAS will deduct the $400 DIC from the $500 SBP and pay the remaining $100 to the annuitant. If the SBP payment is greater than the DIC payment, a partial refund of premiums paid into the program during the service member's retirement will be made to the spouse. If the DIC payment is greater than the SBP payment, SBP will be stopped completely and all eligible basic spouse premiums paid into the program during the service member's retirement will be refunded. The SBP premium refund is limited to SBP premiums paid by the deceased service member during the time periods when they were married to an eligible spouse, and a Spouse SBP election was maintained on their retired pay account. These premium refunds are taxed as income to the spouse since they were not taxed when they were deducted from retired pay. c. When a spouse is eligible to receive SBP and DIC, and those payments are subject to the SBP/DIC offset, the spouse will also receive the Special Survivor Indemnity Allowance (SSIA). 6. Public Law 116-92, section 622 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2020, amended Title 10, U.S.C., section 1450(c) and created a multi-year phase out of the SBP-DIC offset, beginning 1 January 2021. //NOTHING FOLLOWS// ABCMR Record of Proceedings (cont) AR20190015034 4 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS 1