IN THE CASE OF:	  

		BOARD DATE:	        6 January 2009

		DOCKET NUMBER:  AR20080016008 


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 DD Form 2656-2 (Survivor Benefit Plan (SBP) Termination Request) dated 1 August 2005 be accepted as the correct and official date he requested to terminate coverage and that all SBP and Reserve Component SBP (RCSBP) costs and overcharges as listed on his November 2005 and September 2007 Retiree Account Statements be refunded.

2.  The applicant states that he submitted other DA Forms 2656-2 prior to his retirement to terminate coverage but they were rejected and did not become part of his official records.  He adds that he was never married and that his SBP and RCSBP were for his mother, not a spouse.  He also adds that he was double charged for SBP and again for RCSBP as separate items.

3.  The applicant provides the following additional documentary evidence in support of his request:

	a.  DD Form 2656-2, dated 1 August 2005;

	b.  DFAS-CL Form 7220/148 (Retiree Account Statement), dated 16 November 2005 and 28 September 2007;

	c.  Letter, dated 4 December 2005, to the Defense Finance and Accounting Service (DFAS)-Cleveland Center; and


	d.  Orders P11-591292, dated 15 November 2005, issued by the U.S. Army Human Resources Command (HRC), St. Louis, Missouri.

CONSIDERATION OF EVIDENCE:

1.  The applicant's records show he was born on 24 August 1945 and enlisted in the Kentucky Army National Guard (KYARNG) on 8 June 1963.  He entered active duty for training (ADT) on 7 June 1964, completed basic combat and advanced individual training, and was awarded military occupational specialty (MOS) 716.10 (Personnel Clerk).  His records also show he executed a series of reenlistments and/or extensions in the KYARNG and the U.S. Army Reserve (USAR).  He was promoted to master sergeant (MSG) on 19 December 1990 and to sergeant major (SGM) on 1 December 2001 (however, his record is void of his SGM promotion orders).

2.  On 31 August 1984, the National Guard Bureau, Falls Church, Virginia, 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 an unknown date in 1984, 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 mother, unknown age, unknown date of birth), option C.  The front side of the DD Form 1883 states, “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 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 2 December 2001, the applicant was ordered to active duty in support of Operation Enduring Freedom.  However, he was released from active duty on 7 December 2001 and transferred to the USAR Control Group (Individual Mobilization Augmentee). 

5.  On 26 February 2002, the applicant was further reassigned to the USAR Control Group (Reinforcement).

6.  On 27 November 2002, HRC-St. Louis published Orders C-11-230571 releasing the applicant from the USAR Control Group (Reinforcement) and reassigning him to the Retired Reserve by reason of maximum authorized years of service.

7.  On 1 August 2005, the applicant attempted to terminate his participation in the SBP by completing a DD Form 2656-2 (Survivor Benefit Plan (SBP) Termination Request).  Because this form is used to request termination under a specific provision of the law, it appears that DFAS did not accept it as a request for termination of the applicant’s natural person with insurable interest coverage.

8.  On 24 August 2005, the applicant turned 60.

9.  On 15 November 2005, HRC-St. Louis, Missouri, published Orders            P11-591292 placing the applicant on the Retired List effective 1 September 2005 in the rank of MSG.

10.  The applicant's Retiree Account Statement, dated 16 November 2005, shows he paid a total of $486.46 in SBP costs based on his $2,436.00 of gross pay.  However, this same statement also shows that effective 1 December 2005, his new gross pay would become $1,218.00 and that his new SBP cost would become $243 ($121.80 in SBP cost and $121.43 in RCSBP cost).  

11.  The applicant's Retiree Account Statement, dated 28 September 2007, shows the amount of $238.64 in SBP costs for the period covered.  However, this statement also shows that his new SBP cost would be zero, apparently as a result of discontinued participation in the SBP.

12.  Public Law 92-425, the SBP, enacted 21 September 1972, provided that military members 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.

13.  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.  

14.  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.

15.  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."

16.  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 natural person with insurable interest coverage except if the participant terminating natural person with insurable interest 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 elected to participate in the RCSBP on an unknown date in 1984 for a natural person with insurable interest coverage (his mother).  The applicant's record is void of the DD Form 1883; however, this form should have warned him to consider his decision and its effect very carefully and should have also provided him information concerning the costs of the coverage.

2.  The applicant could have made a written request to terminate his natural person with insurable interest SBP coverage at any time after October 1994.  The available evidence shows he made his first attempt to terminate the coverage when he completed a DD Form 2656-2 on 1 August 2005.  However, because the form is used specifically for a termination of the SBP under another provision of the law, it appears that DFAS did not accept it as a request for termination of his natural person with insurable interest.  

3.  This form is used when a participant in the SBP elects to discontinue participation during the 25th through the 36th months after commencement of retired pay.  The applicant retired on 1 September 2005.  As shown on his Retiree Account Statement, dated 28 September 2007, it appears that DFAS used the same DD Form 2656-2 to discontinue the applicant's SBP participation.

4.  There is no specific form to be used when requesting termination of SBP for a natural person with insurable interest coverage.  Any clear written request should be acceptable.  Therefore, the applicant's 1 August 2005 DD Form 2656-2 is accepted as sufficient to show he properly requested termination of SBP for natural person with insurable interest.

5.  The applicant is advised that the Reserve Components premium add-on will be deducted from his retired pay for life for the protection his mother received had he died before reaching age 60.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

___X____  ___X____  ___X____  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

1.  The Board determined that the evidence presented was sufficient to warrant a recommendation for partial relief.  As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by showing he made a proper written request to terminate his natural person with 
insurable interest SBP coverage on 1 August 2005; that it was received and 

processed by the appropriate office in a timely manner to be effective 1 September 2005; and that he be reimbursed any monies due as a result of this correction.

2.  The board further determined that the evidence presented is insufficient to warrant a portion of the requested relief.  As a result, the Board recommends denial of so much of the application that pertains to refunding RCSBP costs.



															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)                                         AR20080016008



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ABCMR Record of Proceedings (cont)                                         AR20080016008



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