IN THE CASE OF: BOARD DATE: 7 July 2023 DOCKET NUMBER: AR20230002701 APPLICANT REQUESTS: in effect, correction of his records to show he elected "Former Spouse" Survivor Benefit Plan (SBP) coverage within 1 year of divorce. 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) * Letter, 18 March 2022 * DD Form 214 (Certificate of Release or Discharge from Active Duty) for the period ending 30 November 1991 * Defense Finance and Accounting Service (DFAS) Letter, 2 December 2022 * DFAS Retired Pay Operations Letter, 5 December 1991 * County Circuit Court Direct Pay Order, 11 December 2000 FACTS: 1. The applicant states: a. He was commissioned in 1957 when Soldiers were paid directly by their company commanders and pay issues were resolved in the finance office on post. He retired in 1991 and he and his wife elected to participate in the SBP. He received a letter stating that SBP was in effect and appropriate deductions from his retired pay began immediately. b. He divorced on 11 December 2000 with approval of the Settlement Agreement. An extract from that Agreement, titled Direct Pay Order, which covered all orders pertaining to military pay, was received by DFAS and carried out to the letter his wife was to receive 50 percent of his retired pay and SBP coverage was to continue. No change or other request to alter his SBP was ever submitted. c. In February 2021, his former spouse called to inform him that she had received a letter stating she was no longer covered by his SBP. He received a similar letter dated 11 February 2021. He called DFAS and inquired about the letters and was told that a particular form had not been submitted at the time of the divorce and nothing could be done. He requested the form in writing and received a DD Form 2656-1 (SBP Election Statement for Former Spouse Coverage). d. He began the appeal process over the next year, offering to refund the money and pay for any months not covered to reinstate his SBP. DFAS responded that the "barring law" had been followed. He believes he has made monthly payments to DFAS for SBP coverage for almost 29 years. 2. On 26 September 1965, the applicant and M____ S____ married. 3. On 11 September 1991, he completed a DA Form 4240 (Data for Payment of Retired Army Personnel) showing he was married and had two dependent children. He elected "Spouse and Dependent Children" coverage at the full gross pay amount. He and a witness signed and dated the form. 4. On 30 November 1991, he retired in the rank/grade of lieutenant general/O-9. 5. On 31 December 1991, DFAS Retired Pay Operations rendered a letter regarding his retired pay account. A summary of his retired pay computation shows he elected SBP coverage for his spouse. The enclosed Summary of Retired Pay Computation shows: a. The SPB base amount of $5,727.00 will provide a month annuity of $3,149.00 until his spouse reaches age 62. This annuity will be reduced by any payments of Dependency Indemnity Compensation to his spouse from the Veterans Administration (now known as the Department of Veterans Affairs). b. At age 62, the annuity will be further reduced because of entitlement to social security benefits based on his military service. The annuity will not be less than $2,004.00, reduced by any payments of Dependency Indemnity Compensation from the Veterans Administration. 6. The County Circuit Court Direct Pay Order in conformance with the terms of the applicant's and his spouse's settlement agreement, 11 December 2000, shows the applicant agreed to elect and all times maintain his former spouse as permanent and irrevocable beneficiary for the maximum rights available under the SPB for so long as she is eligible. The applicant shall immediately re-elect coverage for "former spouse" for maximum benefits under SBP after entry of a final decree of divorce between the parties. 7. On 2 December 2022, DFAS replies to the applicant's Department of Defense Hotline inquiry regarding his SBP account. DFAS informed him that: a. Retirees have the option to choose SBP coverage for a former spouse within 1 year of divorce, as well as the former spouse of a retiree has an option to deem an election. b. There are two requirements for a deemed election to be valid. The first is that the divorce decree must clearly indicate the former spouse is entitled to coverage under the SBP. The second is that the request for a deemed former spouse election must be received within 1 year of divorce. A former spouse must meet both requirements in order to be an eligible former spouse SBP beneficiary. c. DFAS records reflect the applicant did not chose to elect "Former Spouse" SBP coverage for his former spouse. Additionally, DFAS did not receive a deemed election from his former spouse. d. DFAS audited his retired pay account and corrected it to reflect a status of "no beneficiary" effective the date of his divorce. 8. On 6 January 2023, the Defense Office of Hearings and Appeals considered an appeal from the applicant and his former spouse. The applicant is appealing the DFAS decision to deny his entitlement to an SBP. The applicant claims the initial decision should be overturned because he and his former spouse were not aware of the restrictions or limitations on their rights to file a claim or submit the proper paperwork. The appeal further shows: a. On 17 January 2007, DFAS received a letter from the applicant stating his former spouse divorced him 5 years earlier and she had the marriage annulled and remarried about 3 years ago. b. A review of the records shows the former spouse's attorney sent a letter to the DFAS Legal Division, 9 March 2001, which included the Final Decree of Divorce and a Direct Pay Order reflecting the date of divorce as 11 December 2000. The former spouse was awarded a percentage of the applicant's retired pay. She was also awarded the SBP as a former spouse within the divorce documents; however, she did not deem the election within 1 year of the date of the divorce document awarding her the SBP, nor did the applicant voluntarily elect "Former Spouse" SBP coverage for his former spouse within 1 year of the divorce date. The DFAS Garnishment Law Division (formerly DFAS Legal Division) established an account for the former spouse to receive her percentage of the applicant's monthly retired pay; however, the SBP award is a separate entitlement and is handled by DFAS Retired and Annuitant Pay. Regrettably, the DFAS Garnishment Law Division did not notify DFAS Retired and Annuitant Pay of the applicant's divorce until May 2020. As a result, monthly SBP spouse premiums continued to be withheld from the applicant's retired pay after the 11 December 2000 divorce.? c. DFAS sent the applicant an adjustment letter dated 10 February 2021 explaining the adjustment made in his SBP as a result of the divorce. The applicant's SBP election was changed from "Spouse" coverage to "no beneficiary" effective 11 December 2000. As a result, the applicant was due a retroactive credit for the overpayment of SBP premiums withheld from his monthly retired pay. The effective date of the change is 17 January 2001, which is 6 years from the first correspondence DFAS Retired and Annuitant Pay received from the applicant indicating he was divorced. Due to the Barring Act, since the 17 January 2001 date is more than 6 years from the divorce date, a portion of the refund of SBP premiums paid is barred. A payment of the non-barred premiums were paid to the applicant in the gross amount of $68,173.49 on 12 February 2021. The former spouse was also due a portion of the SBP refund. The barred portion of the applicant's credit is $259.92. A denial letter dated 10 February 2021, which included appeal rights, was sent to the applicant. d. In an appeal letter, the applicant questioned the DFAS denial and states he did not submit an appeal of any kind previously because he never had a problem with pay until this issue. He explains that he wants his SBP restored and that the overpayment resulting from the SBP cancellation be repaid by check or garnishment of pay as allowed by law. On 11 October 2021, the applicant submitted numerous Retiree Account Statements and a request to reinstate the SBP coverage for his former spouse. e. An election to provide a SBP annuity to a former spouse must be written, signed by the person making the election, and received by the Secretary concerned within 1 year after the date of the decree of divorce, dissolution, or annulment. Pursuant to Title 10, U.S. Code, section 1450(f)(3)(A), if a person described in section 1448(b)(3) is required by a court order to elect to provide an annuity to a former spouse, and such person then fails or refuses to make such an election, such person shall be deemed to have made such an election if the Secretary concerned receives a written request from the former spouse concerned requesting that such an election be deemed to have been made and receives a copy of the court order, regular on its face, which requires such election. Prior to implementation of the DD Form 2656-10 (SBP Former Spouse Request for Deemed Election), there was not a prescribed manner of making written deemed election requests, former spouses were not bound by any particular form or procedure when making their deemed elections prior to the DD Form 2656-10. f. Title 31, U.S. Code, section 3702(b)(1), states a claim against the Government presented under this section must contain the signature and address of the claimant or an authorized representative. The claim must be received by the official responsible under subsection (a) for settling the claim or by the agency that conducts the activity from which the claim arises within 6 years after the claim accrues. g. After considering the claimant s arguments, DFAS concludes that it properly followed the applicable laws, regulations, and instructions. The applicant's former spouse did not deem the former spouse SBP election within 1 year of the date of the award within the divorce documents nor did the applicant voluntarily elect "Former Spouse" SBP coverage for his former spouse within 1 year of the divorce; as a result, the request for former spouse SBP entitlement is denied. h. As a result, a refund of the SBP premiums paid from the date of divorce has been refunded to the applicant and a portion to the former spouse. The applicant has a portion of the refund, in the amount of $259.92, that is barred due to the application of the Barring Statute. i. The applicant's current spouse is the eligible SBP beneficiary as of their 1-year anniversary on 27 December 2004. 9. As of 12 June 2023, the Defense Retiree and Annuitant Pay System shows the applicant's Defense Office of Hearings and Appeals case is still ongoing. 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 Board carefully considered the applicant's contentions, military records, and regulatory guidance. Documentation available for review is void evidence the applicant has obtained consent of his current spouse beneficiary. As granting the applicant s request would extinguish the applicant s current spouse s claim, and thus, cause unintended harm, the Board determined that relief was not warranted. ? BOARD VOTE: Mbr 1 Mbr 2 Mbr 3 : : : GRANT FULL RELIEF : : : GRANT PARTIAL RELIEF : : : GRANT FORMAL HEARING :xx :xx :xx DENY APPLICATION BOARD DETERMINATION/RECOMMENDATION: The Board determined 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. 2. Public Law 97-252, the Uniformed Services Former Spouses Protection Act (USFSPA), enacted 8 September 1982, established SBP for former military spouses. This law also decreed that State courts could treat military retired pay as community property in divorce cases if they so choose. 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. The USFSPA contains strict jurisdictional requirements. The State court must have personal jurisdiction over the service member by virtue of the member's residence in the State (other than pursuant to military orders), domicile in the State, or consent. 3. Title 10, U.S. Code, section 1448(b)(3), incorporates the provisions of the USFSPA relating to the SBP. It permits a person to elect to provide an annuity to a former spouse. Any such election must be written, signed by the person making the election, and received by the Secretary concerned within 1 year after the date of the decree of divorce. The member must disclose whether the election is being made pursuant to the requirements of a court order or pursuant to a written agreement previously entered into voluntarily by the member as part of a proceeding of divorce. 4. Title 10, U.S. Code, section 1450(f)(3)(A), permits a former spouse to make a written request that an SBP election of "former spouse" coverage be deemed to have been made when the former spouse is awarded the SBP annuity incident to a proceeding of divorce. 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 1 year of the date of the court order or filing involved. 5. Title 31, U.S. Code, section 3702, is the 6-year barring statute for payment of claims by the Government. In essence, if an individual brings a claim against the Government for monetary relief, the barring statute states the Government is only obligated to pay the individual 6 years in arrears from the date of approval of the claim. Attacks to the barring statute have resulted in litigation in the U.S. Court of Federal Claims. In the case of Pride versus the United States, the court held that the Board for Correction of Military Records is not bound by the barring act. The Board for Correction of Military Records decision creates a new entitlement to payment and the 6-year statute begins again. Payment is automatic and not discretionary when a Board for Correction of Military Records decision creates an entitlement. //NOTHING FOLLOWS// ABCMR Record of Proceedings (cont) AR20230002701 1 ARMY BOARD FOR CORRECTION OF MILITARY RECORDS RECORD OF PROCEEDINGS 1