IN THE CASE OF: BOARD DATE: 21 February 2023 DOCKET NUMBER: AR20220006126 APPLICANT REQUESTS: termination of his Survivor Benefit Plan (SBP) and reimbursement of the premiums paid. APPLICANT'S SUPPORTING DOCUMENT(S) CONSIDERED BY THE BOARD: * DD Form 149 (Application for Correction of Military Record under the Provisions of Title 10, U.S. Code, Section 1552) * DD Form 2656-2 (SBP Termination Request), 10 February 2022 * U.S. Army Human Resources Command (HRC) Reserve Component Retired Pay Branch Coversheet (New Account Case – Initial Pay Case), 23 January 2020 * HRC RISS (abbreviation/acronym unknown) Initial Certification – Reserve, 16 January 2020 * HRC Orders C01-090470, 16 January 2020 * HRC Letter, 23 January 2020 * DD Form 108 (Application for Retired Pay Benefits), 22 July 2019 * National Guard Bureau Form 23B (Army National Guard Retirement Points History Statement), 4 November 2019 * DD Form 1883 (SBP Election Certificate), 5 May 2000 * DD Form 2656 (Data for Payment of Retired Personnel), 22 July 2019 * Headquarters, Michigan Army National Guard, Memorandum (Notification of Eligibility for Retired Pay at Age 60), 19 March 2000, with enclosures – * Headquarters, Michigan Army National Guard, 1st Endorsement (Notification of Eligibility for Retired Pay at Age 60), 27 March 2000 * Department of Military and Veterans Affairs Orders 303-092, 30 October 2019 * Department of Military and Veterans Affairs Orders 142-063, 21 May 2008 * 107th Quartermaster Battalion (Supply and Service) Orders 46-1, 21 September 2003 * Headquarters, 146th Transportation Battalion, Orders 28-1, 13 November 1989 FACTS: 1. The applicant states he was never formally counseled regarding the Reserve Component SBP (RCSBP) and believes it was fraudulently presented to him at the time of signing. His great nephew is not his dependent and they do not own a business together. He only selected his great nephew because he did not have anyone else to designate as a beneficiary. a. Army Regulation 600-8-7 (Retirement Services Program) states: "…approve an insurable interest election for a person who is not otherwise an eligible SBP beneficiary, but is the Soldier's dependent as defined by 10 USC 1072(2) [Title 10, U.S. Code, section 1072(2)] for single Soldiers with no eligible children or court ordered SBP for a former spouse." b. His great nephew does not qualify as a dependent as defined by Title 10, U.S. Code, section 1072(2). He believes the election should have been considered erroneous and he should have elected no coverage due to never being married or having children. When he completed his DD Form 2656, he was not aware that he should not have selected his great nephew. 2. The Headquarters, Michigan Army National Guard, memorandum (Notification of Eligibility for Retired Pay at Age 60 (20-Year Letter)), 19 March 2000, notified him that, having completed the required years of service, he would be eligible for retired pay upon application at age 60. The 1st endorsement notified him that he must complete and submit a DD Form 1883 within 90 days of receipt of his 20-year letter. If he did not elect an option within 90 days of receipt of his 20-year letter, HRC would automatically enroll him under "Option A (Spouse Only)." 3. On 5 May 2000, the applicant completed DD Form 1883. It shows the applicant is not married nor has dependent children. He elected SBP coverage for a "natural person with insurable interest." The applicant listed his great nephew as the person who has the insurable interest in him. DD Form 1883 was properly signed and dated by the applicant and a witness. 4. On 22 July 2019, he completed a DD Form 2656 showing he is not married and has no dependent children. He elected "Option B (Previously Elected Coverage to Begin at Age 60)." He and a witness signed and dated the DD Form 2656. 5. On 30 October 2019, he was honorably discharged from the Army National Guard for having completed 20 years of service. 6. In October 2019, he reached age 60. 7. HRC, Orders C01-090470, 16 January 2020, retired him and placed him on the Army of the United States Retired List effective 31 October 2019. 8. The HRC letter, 23 January 2020, informed him that his application for retired pay was approved. 9. The Defense Retiree and Annuitant Pay System shows the applicant completed DD Form 2656-2 to terminate his participation in the SBP on 10 February 2022. The DD Form 2656-2 was properly signed, dated, witnessed, and notarized. BOARD DISCUSSION: After reviewing the application, all supporting documents, and the evidence found within the applicant's military records, the Board found that relief was not warranted. The applicant's contentions, his military records, and regulatory guidance were carefully considered. a. The evidence shows the applicant received a 20-Year Letter in March 2000. On 5 May 2000, he completed DD Form 1883, indicating that he was not married nor had dependent children. He elected SBP coverage for a "natural person with insurable interest." He listed his great nephew as the person who has the insurable interest in him. The DD Form 1883 was properly signed and dated by the applicant and a witness. The Defense Retiree and Annuitant Pay System shows the applicant completed DD Form 2656-2 to terminate his participation in the SBP on 10 February 2022. b. The applicant is seeking to reverse his SBP Insurable Interest election dated o/a 5 May 2000. Simultaneously, he also requested premiums previously paid be reimbursed claiming a “great nephew” isn’t an authorized recipient for purposes of being a potential SBP beneficiary and consequently, he argues, the premiums paid should have been deemed null. The term ‘insurable interest’ is purposefully nebulous as it is intended to provide flexibility to potential unmarried service members without dependents the opportunity to designate key undesignated individuals’ annuity benefits. The intended effect mirrors the applicant’s scenario thereby making his argument meritless. Since a ‘great nephew’ has the potential to be affected by the applicant’s death, it stands to reason the applicant’s great nephew can also be a legitimate beneficiary as an insurable interest election. Likewise, that same election can also be terminated, which the applicant effectuated o/a 10 February 2022. c. The applicant may request DFAS terminate his insurable interest election at any time without a Board decision. The applicant was made aware that premiums paid were for the period the SBP costs were also made, hence no premium refunds should be expected with terminating his participation. 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, 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. A person who is not married and does not have a dependent child upon becoming eligible to participate in the SBP may elect to provide an annuity to a natural person with an insurable interest in the member. Premiums for insurable interest coverage are generally higher than for any other category of coverage. 2. Public Law 95-397, the RCSBP, enacted 30 September 1978, provided a way for those who had qualified for Non-Regular (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 until the date of the member's 60th birthday; or (C) elect that a beneficiary receive an annuity immediately upon their death if before age 60. If death occurs before age 60, the RCSBP costs for Options B and C are deducted from the annuity (costs for Option C being the more expensive). 3. Public Law 105-85, enacted 18 November 1997, established the option to terminate SBP participation. Retirees have a 1-year period beginning on the second anniversary of the date on which their retired pay started to withdraw from the SBP. The spouse's concurrence is required. No premiums will be refunded to those who opt to disenroll. The effective date of termination is the first day of the first calendar month following the month in which the election is received by the Secretary concerned. 4. Title 10, U.S. Code, section 1448(b) (Insurable Interest and Former Spouse Coverage), subparagraph 1 (Coverage for Person with Insurable Interest) states: a. General Rule. A person who is not married and does not have a dependent child upon becoming eligible to participate in the Plan may elect to provide an annuity under the Plan to a natural person with an insurable interest in that person. b. Termination of Coverage. An election for a beneficiary who is not the former spouse of the person providing the annuity may be terminated. Any such termination shall be made by a participant by the submission of a request to discontinue participation in the Plan to the Secretary concerned, and such participation in the Plan shall be discontinued effective on the first day of the first month following the month in which the request is received by the Secretary concerned. Effective on such date, the Secretary concerned shall discontinue the reduction being made in such person's retired pay on account of participation in the Plan or, in the case of a person who has been required to make deposits in the Treasury on account of participation in the Plan, such person may discontinue making such deposits effective on such date. 5. The Military Pay website states eligible persons for insurable interest are: a. any relative more closely related to the member than a cousin. This includes relatives such as parents, stepparents, grandparents, grandchildren, aunts, uncles, sisters, brothers, half-sisters, half-brothers, and dependent or nondependent child or stepchild; or b. an individual who could be finally affected by the member's death. This must be a natural person (not a company, organization, fraternity, etc.) with a financial interest in the member's life. 6. Periodically Congress authorizes an open enrollment season to allow retirees certain changes to their SBP participation or non-participation. The National Defense Authorization Act for Fiscal Year 2023 authorized an open enrollment season from 23 December 2022 through 1 January 2024. //NOTHING FOLLOWS// ABCMR Record of Proceedings (cont) AR20220006126 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS 1