IN THE CASE OF:	  

		BOARD DATE:	        13 August 2008

		DOCKET NUMBER:  AR20080008539 


THE BOARD CONSIDERED THE FOLLOWING EVIDENCE:

1.  Application for correction of military records (with supporting documents provided, if any).

2.  Military Personnel Records and advisory opinions (if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests that his Survivor Benefit Plan (SBP) coverage be cancelled.

2.  The applicant states that he did not understand the full implications of the SBP election he made at the time he executed the DD Form 1883 (Survivor Benefit Plan Election Certificate).

3.  The applicant provides a self-authored letter, dated 1 May 2008; a copy of his DD Form 1883, dated 19 January 1993; a copy of his Retiree Account Statement, dated 1 May 2008; a copy of his 20-year letter, dated 4 November 1992; and a copy of his Retired Reserve Orders, dated 9 March 1999, in support of his application.

CONSIDERATION OF EVIDENCE:

1.  The applicant’s records show he was born on 5 January 1948, and with prior enlisted service, he was appointed as a Reserve commissioned officer in the rank/grade of second lieutenant on 25 September 1970.  

2.  On 4 November 1992, the US Army Reserve Personnel Center issued the applicant a Notification of Eligibility for Retired Pay at Age 60 (20-Year Letter).  This letter notified the applicant that he had completed the required years of service and would be eligible for retired pay upon application at age 60.

3.  On 19 January 1993, the applicant completed a DD Form 1883 (Survivor Benefit Plan Election Certificate).  On this form, he indicated that he was not married and had no dependent children.  He elected to participate in the Reserve Component SBP (RCSBP) for natural person with insurable interest coverage (his sister, age 52, born on 27 February 1941), option C.  The front side of the DD Form 1883 stated, “IMPORTANT:  The decision you make with respect to participation in the Survivor Benefit Plan is a permanent irrevocable decision.  Please consider your decision and its effect very carefully.”  The reverse of the DD Form 1883 explained that the cost of the natural person with insurable interest coverage would be 10 percent of full retired pay, plus an additional 5 percent of full retired pay for each full five years that his age exceeded that of the natural interest person (total cost not to exceed 40 percent of retired pay).

4.  On 9 March 1999, the U.S. Army Reserve Personnel Center published Orders C-03-907615, assigning the applicant to the Retired Reserve, in the rank/grade of lieutenant colonel, effective 9 March 1999.  

5.  The applicant applied for retired pay in or around August 2007.  He was placed on the retired list effective 5 January 2008.

6.  In or around January 2008, the Defense Finance and Accounting Service (DFAS) provided the applicant a retired pay account summary.  This summary indicated his monthly retired pay was reduced by a deduction of $227.20 for SBP costs.

7.  There is no record that the applicant attempted to terminate his participation in the SBP and there is no indication at DFAS that the applicant submitted any requests to terminate the SBP. 

8.  In a self-authored statement, dated 1 May 2008, the applicant states that he is not married and does not have any children.  At the time he executed the DD Form 1883 and named his sister as the beneficiary of the annuity in case of his death, he did not fully understand the implications of his decision.  He further adds that when he first saw the cost of the SBP being deducted from his retired pay, he realized that it was not what he intended or understood when he executed the form. 

9.  In a letter, dated 23 June 2008, addressed to the Army Review Board Agency, (ARBA) St. Louis, MO, the applicant indicates that as soon as he became aware of what he calls an "erroneous deduction" in early February 2008, he contacted DFAS to have the problem rectified.  After several more months of phone calls, each time stalled, stonewalled, and put-off, he was finally able to speak with a DFAS official who advised him to apply to this Board.  He further adds that the length of time it takes this Board to make a decision on his case is too lengthy and that twelve months to resolve his situation means a loss of well over $3,000.00.  Although he expects to get this money back, he states he would lose the interest on that money.  He further states that he realizes DFAS and this Board are busy; however, he feels extremely angry, frustrated, and feels quite ill-served by both DFAS and this Board.  He believes his 30 years of service, including wartime service in Vietnam, qualifies him for better treatment.  He concludes that if he does not receive a phone call from the ARBA-St. Louis, MO, official, by 11 July 2008, he would be forced to resort to action outside the military.  

10.  Public Law 95-397, the RCSBP, enacted 30 September 1978, provided a way for those who had qualified for 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 of it until the date of the member’s 60th birthday; (C)  elect that a beneficiary receive an annuity immediately upon their death if before age 60.  If death does not occur before age 60, the RCSBP costs for options B and C are deducted from the member’s retired pay.  

11.  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.

12.  Public Law 103-337, enacted 5 October 1994, allowed SBP insurable interest participants whose beneficiary is not their former spouse to voluntarily terminate their participation in the SBP.  Any such termination shall be made by a participant by the submission to the Secretary concerned of a written request to discontinue participation in the SBP.  Such participation shall be discontinued effective on the first day of the first month following the month in which the 
request is received.  Once participation is discontinued, benefits may not be paid in conjunction with the earlier participation in the SBP and premiums paid may not be refunded.

13.  Title 10, U. S. Code, section 1452c(1) states the retired pay of a person who has elected to provide an annuity to a person under section 1450(a)(4) (i.e., natural person with insurable interest coverage) shall be reduced as follows:  Subsection 1452c(1)(B):  in the case of a person providing a reserve component annuity, the reduction shall be by an amount prescribed under regulations of the Secretary of Defense.

14.  Office of the Assistant Secretary of Defense (Force Management Policy) memorandum, subject:  Sections 637 and 638 of the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, October 5, 1994, Changed Provisions of the Uniformed Services Survivor Benefit Plan (SBP), dated 17 March 1995, provided that SBP premiums will no longer apply as of the effective date of termination of NIP [natural interest person] coverage except if the participant terminating NIP coverage is a participant of a Reserve Component annuity.  In such case, the Reserve Component premium add-on will apply for life.

DISCUSSION AND CONCLUSIONS:

1.  The applicant willingly elected to participate in the RCSBP in January 1993 for NIP coverage for his adult sister.  The DD Form 1883 warned him to consider his decision and its effect very carefully.  The form also provided him information concerning the costs of the coverage.  He was a LTC when he completed this form.  Therefore, there is no evidence of a procedural error or erroneous collection of SBP premiums.

2.  The applicant could have made a written request to terminate his SBP natural person with insurable interest coverage at any time.  Although the applicant may have contacted DFAS telephonically to inquire about SBP cancellation, there is no evidence in the available records and the applicant failed to provide any evidence that shows he requested to terminate the coverage in writing or that DFAS received and/or denied his request.

3.  There is no specific form to be used when requesting termination of SBP natural person with insurable interest coverage.  Any clear written request should be acceptable.  The applicant's DD Form 149, dated 1 May 2008, is therefore accepted as sufficient to show he properly requested termination of his SBP natural person with insurable interest coverage.  The date of his DD Form 149 shall serve as the termination date.

4.  The applicant is advised that despite this action by the Board, the Reserve Component premium add-on will be deducted from his retired pay for life.  This deduction is the cost of the SBP coverage or protection the applicant's natural person with insurable interest (sister) enjoyed from the date the applicant made an election.


BOARD VOTE:

__xxx___  __xxx___  __xxx___  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  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 showing that he made a proper, written request to terminate his SBP natural person with insurable interest coverage on 1 May 2008 and that it was received and processed by the appropriate office in a timely manner to be effective 1 June 2008.


															XXX
      ______________________
       	   CHAIRPERSON
      
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.

ABCMR Record of Proceedings (cont)                                         AR20080008539



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ABCMR Record of Proceedings (cont)                                         AR20080008539



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