IN THE CASE OF:	  

		BOARD DATE:	  22 September 2011

		DOCKET NUMBER:  AR20110002077 


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, in effect, her military records be corrected to show she terminated her Reserve Component Survivor Benefit Plan (RCSBP)  coverage for a natural interest person (NIP) on 7 August 1997. 

2.  The applicant states:

* The Defense Finance and Accounting Service (DFAS) admitted they made an error
* When she got her first check at age 60 she could not afford a large deduction for RCSBP so she requested that it be stopped and it did stop
* She did not suspect an error
* At that time she had been a nun for 15 years  

3.  In a letter, dated 23 February 2009, she states:

* She wrote a letter to DFAS [in 2008] regarding her daughter's qualification to be "Natural Interested Person" at age 44 on her SBP
* When her daughter was 33, she removed her because she misread an Army publication regarding age removal
* At that time she was paying $29 a month for her daughter
* In her 2008 letter to DFAS she did not ask them to put her daughter back on her records/RCSBP, she just needed information clarified
* DFAS put her daughter back on assuming that was what she wanted and raised the fee to $226.45 in 1997 and up to $295.84 in 2008, thus creating a debt of $34,238.08
4.  In a letter she wrote to President Obama, dated 25 January 2010, she states:

	a.  she wrote a letter to DFAS in 1997 because she read an article and it appeared her daughter should not be on her records as a beneficiary of her SBP due to her age at the time (33 years old).  DFAS sent her no forms or letters, they just removed her daughter from her SBP account and refunded money they had withheld.  She figured she had done what was necessary to terminate her daughter's eligibility for benefits.

	b.  in 2008 her daughter thought she could be her NIP on her SBP.  Not remembering her previous correspondence in 1997, she sent DFAS a letter and inquired and all "hell" broke loose.  DFAS admitted they made a mistake removing her daughter from her record in 1997 but they felt she should have known.  She does not carry around a manual with the "do's and don'ts" of the SBP.

	c.  DFAS sent her a letter in September 2008 informing her she owed $34,238.08 and she had to pay it within 30 days.  She does not have this kind of money and she doesn't make enough to pay taxes.   

	d.  she was an Ursuline Sister of Paola, KS, from 1982 to 1997 and at the same time in the Kansas Army National Guard.  Sisters do not keep any stipends they make, they only budget for their basic needs and all monies earned are returned to the Motherhouse for community needs, thus no savings for her. 

	e. No one in their right mind or at least informed mind would have a NIP on their account as DFAS withholds $295 a month and your survivor receives no more than a person you've paid $32 a month for, which is $3,474.67.  She has paid nearly $4500 and no one is listed as her survivor.  None of this makes sense to her.

5.  In a letter, dated 13 May 2010, she states:

* She completed 20 1/2 years in the Armed Forces
* She continued with her drill status in the Kansas Army National Guard through July 1985 
* She was notified of the debt in September 2008

6.  The applicant provides:

* Two applications
* RCSBP documentation
* Letters, dated 13 May 2010, 25 January 2010, and 23 February 2009
* DFAS letters, dated 12 December 2008 and 24 September 2008
* Letters of reference
* Newspaper articles
* Her letter, dated 7 August 1997, to DFAS
* DD Form 2656 (Data for Payment of Retired Personnel)
* DD Form 1883 (SBP Election Certificate)  

CONSIDERATION OF EVIDENCE:

1.  She was born on 23 July 1937.  Having prior active service in the U.S. Marine Corps from 1955 to 1964, she enlisted in the Army National Guard on 23 July 1973.  

2.  On 15 August 1985, she completed a DD Form 1883 electing RCSBP coverage for her daughter as a person with insurable interest, option C, full retired pay.  

3.  On 7 August 1997, she wrote to DFAS and indicated she made an incorrect SBP selection and asked if she could change the election.  

4.  A letter, dated 12 December 2008, from DFAS states:

   a.  on 15 August 1985, she elected NIP coverage under the RCSBP for her daughter.  

   b.  in August 1997, DFAS received correspondence from the applicant asking if she could change her election.  The correspondence did not constitute a request to terminate her SBP NIP coverage; however, DFAS erroneously terminated her coverage in September 1997 and issued a payment of $214.06 to her.  This payment represented the SBP portion of the RCSBP premium deducted from her retired pay in August 1997.
   
   c.  DFAS reinstated her SBP NIP coverage effective 1 August 1997 and established a debt of $34,238.08 on her retired pay account. 	   

	d.  the applicant's RCSBP election has been corrected to show she elected coverage for her daughter, and that she did not withdraw her participation in the RCSBP, resulting in an RCSBP premium debt of $34,238.08.

	e.  she cannot change the beneficiary under the RCSBP to her grandson.

	f.  she must pay 360 months of RCSBP premiums before she will be paid-up under the provisions of the RCSBP.  
5.  Public Law 92-425, enacted 21 September 1972, established the SBP.  The SBP 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.

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 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, or (C) elect that a beneficiary receive an annuity immediately upon their death if before age 60.  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, and RCSBP coverage automatically rolls into SBP coverage.

7.  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.

DISCUSSION AND CONCLUSIONS:

1.  The evidence of record shows in August 1985 the applicant elected RCSBP coverage for her daughter, a person with insurable interest.  

2.  The law provides that an RCSBP/SBP election for an insurable interest beneficiary may be terminated at any time without the concurrence of the beneficiary.

3.  The applicant sent a letter to DFAS on 7 August 1997 and asked if she could change her SBP election.  The correspondence did not constitute a request to terminate her SBP NIP coverage; however, DFAS erroneously terminated her coverage in September 1997.  



4.  It appears in 2008 the applicant sent another letter to DFAS inquiring about NIP coverage for her daughter.  As a result of this letter, DFAS reinstated her SBP NIP coverage effective 1 August 1997 and established a debt of $34,238.08 on her retired pay account.   

5.  By her own admission, the applicant could not afford the SBP premium in 1997 and it was her intention to cancel her SBP NIP coverage at that time.  Therefore, it would be equitable to correct her records to show she made a proper written request to terminate her SBP NIP coverage on 7 August 1997 and that it was received and processed by the appropriate office in a timely manner to be effective 1 September 1997.  

BOARD VOTE:

____X___  ____X___  ____X___  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:

	a.   showing that she made a proper, written request to terminate her SBP NIP coverage on 7 August 1997 and that it was received and processed by the appropriate office in a timely manner to be effective 1 September 1997; and 

	b.  having DFAS audit her account and make appropriate adjustments.



      _______ _   __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)                                         AR20110002077





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ABCMR Record of Proceedings (cont)                                         AR20110002077



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