RECORD OF PROCEEDINGS


	IN THE CASE OF:	  


	BOARD DATE:	  24 April 2007
	DOCKET NUMBER:  AR20060009083 


	I certify that hereinafter is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in the case of the above-named individual.


Mr. Gerard W. Schwartz

Acting Director

Ms. Anita McKim-Spilker

Analyst


The following members, a quorum, were present:


Mr. James E. Vick

Chairperson

Mr. Patrick H. McGann

Member

Mr. Gerald J. Purcell

Member

	The Board considered the following evidence:

	Exhibit A - Application for correction of military records.

	Exhibit B - Military Personnel Records (including advisory opinion, if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests that the records of her husband, the former service member (FSM), be corrected to show that he was not retired but on active duty at the time of his death, thereby entitling her to receive $150,000 in additional Servicemembers' Group Life Insurance (SGLI).

2.  The applicant states, in effect, that at the time of her husband's death, the maximum SGLI was $250,000, the Death Gratuity Benefit was $12,000, and the full Survivor Benefit Plan (SBP) annuity still had a reduction at age 62 from
55 percent to 35 percent.  Although her husband did not want to be retired, upon the advice of Army personnel assisting her at Walter Reed Army Medical Center, she elected to have him medically retired when it became obvious that her husband's death was imminent.  She only agreed to have him medically retired so that she could elect full SBP with the supplemental benefit.   

3.  With the changes in legislation affecting SBP and SGLI, she now realizes she would have been better off financially if she had not agreed to have her husband medically retired.  She applied for both the increased Death Gratuity payment and SGLI; she was granted the increased Death Gratuity and received an additional $88,000.  She also received $250,000 SGLI; however, because her husband was not on active duty at the time of his death, she was denied the increased SGLI benefit from $250,000 to $400,000.  

4.  She contends that because of the legislative changes that have taken place in the last couple of years, she would have been better off financially if she had not taken the Army's advice.  Her husband did not want to be retired, and if she had not made the decision to have him retired, she would now be entitled to the full $400,000 SGLI payment.  As such, she requests that the Board exercise its authority to reverse her husband's medical retirement at the time of his death so that she can receive the retroactive increase of $150,000 in SGLI.

5.  The applicant provides a copy of the FSM's Medical Evaluation Board; a copy of the FSM's Physical Evaluation Board;, a copy of her SBP election; a copy of their marriage certificate; a copy of the FSM's death certificate; a copy of the FSM's retirement orders; a copy of the FSM's Casualty Report; and a copy of a Prudential Financial Statement showing that she received $250,000 in SGLI.





CONSIDERATION OF EVIDENCE:

1.  The FSM was commissioned as a second lieutenant on 21 May 1981.  He entered active duty on 10 October 1984.  He attained the rank of colonel on 1 May 2003.

2.  On 3 September 2003, a PEB found the applicant unfit for duty due to metastatic adenocarcinoma of unknown primary with a diagnosis made on the basis of malignant cells found in the ascitic fluid.  The FSM had developed reactions to chemotherapy and developed community acquired pneumonia and enterococcus bacterium.  Because of the infection and the inability to treat, or even attempt palliation of the carcinoma, the FSM was expected to expire within 72 hours.  

3.  At 1833 hours on 3 September 2003, the FSM was placed on the Temporary Disabled Retired List (TDRL) as 100 percent disabled, to enable the applicant to make an SBP election favorable to her and her children.  She elected spouse and children coverage, with 20 percent Supplemental SBP (SSBP).  

4.  Subsequent to the applicant's SBP election and the FSM's death, the SBP statute changed, notably in Public Law 108-375 (28 October 2004), which eliminated the post age 62 reduction from 55 percent to a 35 percent for spouse beneficiaries annuity by incrementally increasing the annuity and phasing out SSBP as the post age 62 spouse annuity is increased to 55 percent.

5.  Because of the new SBP statute, the applicant's decision to retire her husband prior to his imminent death negated the financial advantage she secured at the time of her husband's death by electing SSBP instead of only SBP.  She applied for and received the retroactive increased Death Gratuity of $88,000; however, she was denied the retroactive $150,000 SGLI increase because her husband was no longer on active duty at the time of his death.  As such, she now seeks to undo her husband's retirement in order to obtain the $150,000 in retroactive increased SGLI.

6.  Public Law 101-189, enacted 29 November 1989, established the SSBP (effective 1 October 1991).  The SSBP annuity (5, 10, 15, or 20 percent of full retired pay) would be paid in addition to the standard 35 percent-tier payment for surviving spouses age 62 and older.  The SBP provided a survivor 55 percent of 




a participant's military retired pay.  The after-62 benefit amount dropped to 
35 percent of the retired pay because Social Security was meant to provide the additional coverage to bring the survivor support level back up to the 55 percent level.  The SSBP provided a means to increase the after-62 benefit to 
40, 45, 50 or 55 percent of the retired pay.  

7.  Public Law 107-107, enacted 28 December 2001, extended SBP eligibility to spouse or eligible children of all active duty deaths classified in the line of duty since 10 September 2001.  Annuity was computed as if the member was retired with full disability on the date of death.

8.  Public Law 108-375, enacted 28 October 2004, began a phased elimination of the two-tiered annuity computation for surviving spouses under the SBP.  By 2008, the reduction in SBP payments to offset Social Security payments commencing at age 62 will be completely eliminated.  The SSBP will be phased out incrementally as the post-age 62 annuity is increased.

9.  The National Defense Authorization Act (NDAA) for Fiscal Year 2006 (Public Law 109-163, enacted 6 January 2006) increased the death gratuity to $100,000 for all deaths retroactive to 7 October 2001.  It also provided $150,000 additional SGLI for any active duty death between 7 October 2001 and 11 May 2005.

DISCUSSION AND CONCLUSIONS:

1.  The FSM's medical retirement process was conducted in accordance with the law applicable at the time and she was properly and equitably retired in accordance with the regulations in effect at the time.  There is no indication of procedural errors which would tend to have jeopardized the applicant's rights.  

2.  Given the laws in effect at the time, the FSM was retired for the applicant's personal financial gain.  In order to maximize her benefits, she was properly advised that she would secure a more favorable financial return by electing the SSBP annuity (of 20 percent), which would be paid in addition to the standard 35 percent-tier payment for surviving spouses age 62 and older.  In addition to this increased SSBP annuity, she also benefited by not having to pay for it.  

3.  Now that the SSBP two-tiered advantage she gained has been negated by new law, she wants to correct the FSM's record to show he was on active duty at the time of his death in order to obtain the additional retroactive SGLI payment of $150,000.  Under the Fiscal Year 2006 NDAA, a servicemember must have been on active duty for him to secure the additional $150,000.  She was entitled to and received the $250,000 SGLI because under that law it could be collected on retirees who died 120 days following retirement.  However, the law requires a servicemember be on active duty at the time of death in order for the survivor to receive the additional $150,000 SGLI.

4.  The Board found no legal error in the FSM's case.  However, the original intent of the Army officials advising her was to maximize whatever military benefits might assist her and her children after the FSM's untimely death.  There was no way they could have known about the changes that were to be made to the relevant laws within just a few years of the FSM's death.  As such, based on equitable considerations and in keeping with the original intent of maximizing the applicant's benefits, the FSM's record should be corrected to show that he was on active duty at the time of his death on 3 September 2003. 

BOARD VOTE:

__jev___  ________  __gjp___  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  __phm___  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The Board determined that the evidence presented was sufficient to warrant a recommendation for relief.  As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by:

	a.  voiding Orders 254-0006, issued by Department of the Army, U.S. Army Garrison, Fort Belvoir, Virginia, dated 11 September 2003, placing the FSM on the retirement list;

	b.  correcting DD Form 1300 (Report of Casualty), Item 5g (Duty Status) to read "Active Duty;"

	c.  void any DD Form 214 (Certificate of Release or Discharge from Active Duty) which may have been issued; 



	d.  correct the FSM's DA Form 199 (PEB Proceedings) to show that he was approved for "Continued on Active Duty (COAD)" in accordance with Army Regulation 635-40; and

	e.  void "Spouse Statement of Desired SBP Election" dated 2 October 2003.




							James E. Vick
______________________
          CHAIRPERSON




INDEX

CASE ID
AR20060009083
SUFFIX

RECON

DATE BOARDED
20070424
TYPE OF DISCHARGE

DATE OF DISCHARGE

DISCHARGE AUTHORITY

DISCHARGE REASON

BOARD DECISION
(GRANT)
REVIEW AUTHORITY

ISSUES         1.
128.0000
2.

3.

4.

5.

6.