2. The applicant (the former spouse) requests correction of her ex-spouses (hereafter the ex-spouse will be referred to as the retiree) military records to show that he elected Survivor Benefit Plan (SBP) participation for former spouse. She states, in effect, that the separation agreement stipulated maintenance in the SBP.
3. The retirees military record shows that he and the applicant were married in 1961, shortly thereafter the retiree entered the Army. He remained in the Army until
1 January 1987 when he retired. He had completed more than 20 years of active service and retired in pay grade E-6, at the time of his retirement he elected SBP participation for spouse only. On 20 September 1988, they entered into a Legal Separation and Property Settlement Agreement, which among other provisions specifically ordered the retiree to elect former spouse coverage. However, the Legal Separation and Property Settlement Agreement also stated that provisions would not be incorporated into any court judgment or the final divorce decree. On 28 October 1989, the divorce became final without the stipulated provisions. In September 1991, the applicant discovered that she was not the covered beneficiary and that the retirees new spouse was now the new beneficiary. After continued efforts to compel the retiree to reinstate her as his beneficiary the applicant filed suit against the retiree in the North Carolina District Court seeking enforcement of their Legal Separation and Property Settlement Agreement. On
27 September 1993, the applicant won her case and the retiree was ordered by the North Carolina District Court to reinstate the applicant as sole beneficiary of his SBP. On 20 December 1994, the State of North Carolina Court of Appeals affirmed the judgment of the District Court of North Carolina. On 31 May 1995, the retiree under protest complied with the terms of the court judgment and attempted to reinstate the applicant as the sole beneficiary. However, his written request was denied by DFAS because the final divorce decree did not stipulate maintenance in the SBP as a former spouse and because of failure to timely file.
4. On 11 December 1995, the applicant appealed to this Board for correction of her ex-spouses military records.
5. 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. The applicant elected SBP participation for his spouse in 1987.
6. Public Law 99-661, dated 14 November 1986, permitted divorce courts to order SBP coverage in those cases where the retiree had elected spouse coverage at retirement The law stipulated that the retiree had to request the Defense Finance and Accounting Service to change the SBP participation from spouse to former spouse. This request had to made within 1 year from the date of the divorce.
7. In the processing of this case, a staff advisory opinion was obtained from the SBP Board in the Office of the Deputy Chief of Staff for Personnel. The SBP Board was unable to render a recommendation.
CONCLUSIONS:
1. The evidence of record shows that at the time of retirement, the retiree elected SBP participation for his spouse. In 1988, they separated and entered into a Legal Separation/Property Settlement Agreement. The legal separation specifically ordered the retiree to elect former spouse coverage. However, due to restrictions in the final divorce decree, the final divorce decree in 1989, did not stipulate maintenance in the SBP for his former spouse. DFAS denied the election change because of failure to timely file and because the final divorce decree did not stipulate maintenance in SBP for former spouse.
2. It is quite obvious to this Board that the problem with this case is state law verse federal law. DFAS by law was legally correct in the denial of the election option made by the retiree based on the date of the final divorce decree. However, consideration should have been given to the fact, that in some states final divorce decrees and property settlement agreements may not be adjudged simultaneously. Although the couple was divorced in October 1989, the property settlement agreement was not final until the final appeal was won on 20 December 1994. On 31 May 1995, the retiree finally complied with the terms of the court judgment, which was within 1 year from the date of the final property settlement order (20 December 1994). As such, the election was completed in compliance with the 1 year statutory requirement.
3. When Congress authorized the creation of the Correction Boards, it specifically spoke of correcting error and removing injustice. This would appear to be a classic example of what the Congress had in mind.
4. Therefore, in view of the unique facts of this case, it would be fair and just to correct the records as recommended below.
RECOMMENDATION:
That all of the Department of the Army records related to this case be corrected by showing that the individual concerned changed his SBP participation from spouse to former spouse effective 31 May 1995 (the date the retiree submitted the SBP election change) with retroactive payment of cost if applicable.
BOARD VOTE:
GRANT AS STATED IN RECOMMENDATION
GRANT FORMAL HEARING
DENY APPLICATION
CHAIRPERSON
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