IN THE CASE OF:	  

		BOARD DATE:	  15 October 2009

		DOCKET NUMBER:  AR20090006521 


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 termination of the payment in the amount of $48.36 that is being deducted from his monthly retirement annuity for the Reserve Component Survivor Benefit Program (RCSBP). 

2.  The applicant states, in effect, that he was not properly counseled in 1991 when he reached 20 years of qualifying service for nonregular retirement from the California Army National Guard (CAARNG)  He states he did not understand what RCSBP was nor did he understand the cost for participation in the program.  In addition, if he had been properly informed he would not have signed up for the RCSBP.  He states he received his first Retiree Account Statement, dated
2 January 2009, and the RCSBP cost was deducted from his retirement pay.

3.  The applicant provides in support of his application copies of his Retiree Account Summary and a letter to the Defense Finance and Accounting Service (DFAS).

CONSIDERATION OF EVIDENCE:

1.  The applicant was born on 14 December 1947.  He enlisted in the CAARNG on 25 February 1970 and served continuously until his honorable transfer to the U.S. Army Reserve Control Group (Retired Reserve) on 31 December 2008.  He retired in the rank and grade of first sergeant/pay grade E-8.  He was issued an NGB Form 22E (Report of Separation and Record of Service) which shows his total service for pay was 38 years, 10 months, and 6 days. 

2.  The applicant's official military personnel file (OMPF) on the interactive Personnel Electronic Records Management System (iPERMS) shows that on 29 November 1990, the State of California, Office of the Adjutant General notified the applicant by memorandum that he had completed the required years of service and that he would be eligible retired pay upon application at age 60.

3.  His iPERMS file also contains a DD Form 1883 (Survivor Benefit Plan Election Certificate), dated 10 January 1991.  The applicant elected Option C (Immediate Coverage) in Section II (Marital, Dependency, and Election Status) for a natural person with insurable interest.  He stated he was not married and he did not have dependent children.  He named Sharron A_______, a cousin, as his person with insurable interest.  He further stated that his election of coverage was the only election he had made under the Survivor Benefit Plan.  

4.  The front side of the DD Form 1883 warns, “IMPORTANT:  The decision you make with respect to participation in the survivor Benefit Plan is a permanent irrevocable decision.  Please consider you decision and its effect very carefully.”  The reverse side of the DD Form 1883 explains the costs of all the options, including the natural interest person option.

5.  As evidence to support his request, the applicant provided two copies of his DFAS-CL Form 7220 (Retiree Account Statement).  The first statement, dated 1 January 2009, shows that he elected RCSBP coverage for a Natural Interest Person.  His retiree pay statement shows the SBP cost as $119.70 and the RCSBP cost as an additional $48.36 for a total RCSBP cost of $168.06.  In a separate letter to DFAS, Military Retirement Pay the applicant requested termination of the Natural Interest Person SBP coverage.  The second retiree statement, dated 1 May 2009, shows that DFAS did approve his request and the Natural Interest Person SBP coverage stopped.  However, the RCSBP associated cost of $48.36 was not. 

6.  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 to include persons of insurable interest should the Reservist die before reaching age 60.  Three options are available:  

	a. Option A allows a Reservist to decline enrollment upon notification of retirement eligibility and allows the Reservist to elect coverage at age 60; 

	b. Option B allows a Reservist to elect to provide an annuity beginning on the 60th anniversary of their birth should they die before age 60 or on the day after the date of death should they die after their 60th birthday; and;

	c. Option C allows a Reservist to elect to provide an annuity immediately upon their death whether before or after age 60.  

7.  Public Law 95-397 further provides that once a member elects either Options B or C in any category of coverage, that election is irrevocable.  Option B and C participants do not make a new SBP election at age 60.  They cannot cancel SBP participation or change options they had in RCSBP for it automatically rolls into SBP coverage.  If death does not occur before age 60, the RCSBP costs for options B and C are deducted from the member’s retired pay.  If RCSBP Option B or C is elected, there is a Reservist Portion cost added to the basic cost of the SBP to cover the additional benefit and assured protection should the member have died prior to age 60.

8.  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.  A participant shall make any such termination by written request to discontinue participation in the SBP to the Secretary concerned.  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.

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends that the $48.36 payment that is being deducted from his monthly retirement annuity for the RCSBP costs should be terminated.  He contends that he did not understand the cost of RCSBP due to improper counseling by members of the CAARNG upon receipt of his twenty-year retirement eligibility letter in 1991.

2.  At the request of the applicant, DFAS stopped deducting the cost of SBP for his named person of insurable interest.  However, DFAS continued to deduct the cost of the Reserve Component portion of the SBP.  The Reserve Component cost of the SBP accounts for the annuity cost if the applicant had died prior to his 60th birthday as he elected Option C (Immediate Coverage) on his DD Form 1883 that he submitted on 10 January 1991.  RCSBP premium benefits would have been immediately payable to his named person of natural interest.  

3.  The premium for the Reserve Component portion of the RCSBP is a debt the applicant incurred when he elected Option C.  As such, his named person of natural interest would have received the SBP premium with the cost share of the Reserve Component portion of the SBP deducted from the SBP benefit.  As the named beneficiary would have incurred the cost share of the Reserve Component portion of the SBP, so does the applicant incur the same Reserve Component deductions from his retirement pay. 

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

___X___  ___X____  ___X____  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The evidence presented does not demonstrate the existence of a probable error or injustice.  Therefore, the Board determined that the overall merits of this case are insufficient as a basis for correction of the records of the individual concerned.




      _______ _   X_______   ___
               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)                                         AR20090006521



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ABCMR Record of Proceedings (cont)                                         AR20090006521



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