RECORD OF PROCEEDINGS
AIR FORCE BOARD FOR CORRECTION OF MILITARY RECORDS


IN THE MATTER OF:	DOCKET NUMBER:  BC-2012-05161
XXXXXXX	COUNSEL:  NONE
		HEARING DESIRED:  NO

________________________________________________________________

APPLICANT REQUESTS THAT:

Her debt as a result of her election of her nephew as a Natural 
Interest Person (NIP) beneficiary to her Survivor Benefit Plan 
(SBP) be removed and that she be reimbursed for payment and 
interest related to this election.

________________________________________________________________

APPLICANT CONTENDS THAT:

She believes she was given the wrong information when she 
changed her beneficiary from her brother to her nephew.  She 
states that she would have never elected her nephew as NIP had 
she been given the correct information.

She had her brother identified as the NIP beneficiary to her 
SBP; however, when her brother died she inquired about having 
her nephew designated as the NIP.  

In May 11, she notified the Defense Finance and Accounting 
Service (DFAS) Retired Military Pay section of her brother’s 
death and inquired if she could then elect her nephew as the 
NIP.  She was advised that she could; however, there would be a 
slight increase in the premium.  She contacted DFAS several 
times because the deduction out of her retired pay had not been 
increased and remained the 10 percent as it was when her brother 
was beneficiary.

In Dec 11, she was notified that she was assigned a debt of 
$10,163.93 and that her SBP premiums had increased from 
10 percent to 45 percent.  

She cannot afford a 45 percent reduction in her retirement pay 
for SBP and would like the resultant debt removed and to be 
reimbursed for the debt and interest payments she has already 
paid.

The applicant's complete submission, with attachments, is at 
Exhibit A.

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STATEMENT OF FACTS:

Based on the letter prepared by the DFAS office of primary 
responsibility, on 12 May 00, the applicant retired from active 
duty.  She elected her brother as a NIP beneficiary on her SBP.  
On 23 May 11, DFAS received a letter and a copy of her brother's 
death certificate noting that her brother died on 15 Apr 11.  In 
her letter, she requested that her nephew be established as the 
NIP for the SBP annuity.  

On 7 Nov 11, the applicant called the DFAS Customer Contact 
Center as a follow up to her letter regarding her request to 
designate her nephew as a NIP for SBP.  DFAS sent the applicant 
a letter, dated 20 Dec 11, advising her that her nephew has been 
established as a NIP for SBP effective 1 May 11, and as a result 
she has been undercharged SBP costs for the period 
1 May 11 through 31 Dec 11 in the amount of $10,163.93. 

On 6 Jan 12, the applicant requested a waiver of the SBP cost 
debt.  On 1 Jun 12, DFAS withdrew the applicant’s nephew as SBP 
NIP and he has not been reinstated.  On 25 Jun 12, a letter from 
DFAS, Debt and Claims Management was sent to her advising that 
her request for a waiver was denied.  On 5 Oct 12, in an effort 
to remove the debt, the applicant wrote a letter to DFAS 
requesting to put her brother back on as an SBP beneficiary 
since she will have to pay the costs back due to the denial of 
her waiver.  

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AIR FORCE EVALUATION:

DFAS-JBJE/CL, Retirement and Annuity Pay, recommend the 
applicant’s record be corrected to show that she did not make a 
subsequent NIP election after the death of her brother.  
However, she will no longer be able to elect a new beneficiary 
for SBP, as a new election may only be made during the 180-day 
period beginning on the date of the death of the previous 
beneficiary.  If the Board should approve her request for a 
waiver, DFAS will cancel the SBP premium debt, refund the monies 
paid towards the debt, refund SBP premiums deducted from her 
retired pay for her nephew and adjust her military retired pay 
records accordingly.  

The applicant’s indebtedness arose solely from the non-payment 
of SBP premiums and represents a bill for the insurance coverage 
she was provided for the benefit of her nephew.  While there 
were delays in processing her request, ultimately, she did 
receive the benefit of the coverage for the period Jun – Dec 11.  
If a debt arises because a member is not charged the proper 
amount in a timely manner, it is not considered inequitable to 
require a member to pay the cost when the error is detected.  
Therefore, the SBP NIP cost debt will continue to be deducted 
from her military retirement pay until it is recouped 
approximately Jan 14.

The complete DFAS evaluation is at Exhibit B.

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APPLICANT'S REVIEW OF AIR FORCE EVALUATION:

A copy of the Air Force evaluation was forwarded to the 
applicant on 24 Feb 13 for review and response.  As of this 
date, no response has been received by this office (Exhibit C).

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THE BOARD CONCLUDES THAT:

1.  The applicant has exhausted all remedies provided by 
existing law or regulations.

2.  The application was timely filed.

3.  Sufficient relevant evidence has been presented to 
demonstrate the existence of error or injustice warranting 
corrective action.  The Air Force office of primary 
responsibility has adequately addressed the issues presented by 
the applicant and we are in agreement with their opinion and 
recommendation.  In addition, we note that had the applicant 
been made aware of the cost of the SBP, as noted in her 
inquiries to DFAS and had it not been for the delay in 
processing her claim, more than likely the resultant debt would 
not have occurred.  Aside, we note the recommendation to approve 
the applicant’s request to have the debt waived; however, such 
an action is unnecessary, as no debt will exist once the 
applicant’s records are corrected to the extent indicated below.

________________________________________________________________

THE BOARD RECOMMENDS THAT:

The pertinent military records of the Department of the Air 
Force relating to APPLICANT, be corrected to show that her 
election, effective 1 May 2011 to designate her nephew as the 
Natural Interest Person beneficiary on her Survivor Benefit Plan 
be declared void. 

________________________________________________________________

The following members of the Board considered AFBCMR Docket 
Number BC-2012-05161 in Executive Session on 29 August 2013, 
under the provisions of AFI 36-2603:

All members voted to correct the records, as recommended.  
Although, XXXXXX chaired the panel, due to her unavailability, 
XXXXXXX has signed as Acting Panel Chair.  The following 
documentary evidence was considered:

    Exhibit A.  DD Form 149, dated 31 Oct 12, w/atchs. 
    Exhibit B.  Letter, DFAS, dated 14 Feb 13.
    Exhibit D.  Letter, SAF/MRBR, dated 24 Feb 13.




                                   Acting Panel Chair