IN THE CASE OF:	  

		BOARD DATE:  17 January 2012
	
		DOCKET NUMBER:  AR20110010160 


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 correction of his military records to show his monthly cost for the Reserve Component Survivor Benefit Plan (RCSBP) has been terminated.  He further requests that all premiums he has paid be refunded.

2.  The applicant states, in effect, he was single at the time he originally elected natural person with insurable interest (NIP) coverage and is still single, without any dependents.  He contends that no one counseled him about RCSBP.  At the time of his request for retired pay, he tried to elect not to participate in the SBP.

3.  The applicant provides copies of his Retiree Account Statement and DD Form 214 (Armed Forces of the United States Report of Transfer or Discharge).

CONSIDERATION OF EVIDENCE:

1.  Title 10, U.S. Code, section 1552(b), provides that applications for correction of military records must be filed within 3 years after discovery of the alleged error or injustice.  This provision of law also allows the Army Board for Correction of Military Records (ABCMR) to excuse an applicant’s failure to timely file within the 3-year statute of limitations if the ABCMR determines it would be in the interest of justice to do so.  While it appears the applicant did not file within the time frame provided in the statute of limitations, the ABCMR has elected to conduct a substantive review of this case and, only to the extent relief, if any, is granted, has determined it is in the interest of justice to excuse the applicant’s failure to timely file.  In all other respects, there are insufficient bases to waive the statute of limitations for timely filing.
2.  On 15 February 1992, the U.S. Army Reserve Personnel Center sent the applicant notification of his eligibility for retired pay at age 60.  This notification also informed him that he had 90 days in which to submit his SBP election certificate.

3.  On 31 May 1992, the applicant signed his SBP election certificate electing NIP coverage under option C, based on his full amount of retired pay.

4.  On 26 October 1995, the U.S. Army Reserve Personnel Center sent the applicant a letter advising him of the provisions of Public Law 103-337, section 638 allowing SBP participants to discontinue NIP coverage.

5.  On 6 May 2003, the applicant submitted a DD Form 2656 (Data for Payment of Retired Personnel).  He indicated that he did not desire to participate in the SBP.

6.  On 15 June 2003, the applicant attained age 60.

7.  On 29 July 2003, the applicant submitted a hand-written statement requesting termination of his earlier NIP election.  He indicated in his statement that he was single and had no dependent children.

8.  The applicant's Retiree Account Statement, effective 2 December 2009, shows SBP NIP coverage and that his retired pay is being reduced $29.60 per month for RCSBP premiums.

9.  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.

10.  Department of Defense Financial Management Regulation (DODFMR), Volume 7B, Chapter 54:

	a.  Paragraph 5410 (Premiums):  The cost of providing RCSBP coverage under the immediate or deferred annuity option is not subsidized by the Government but is shared by members and beneficiaries who potentially will benefit from the coverage. The cost to the retiree is in the form of an additional deduction from his or her retired pay beyond the standard SBP cost.  The RCSBP, unlike SBP, requires a reduction in the survivor annuity.  That deduction begins when the survivor begins to receive an annuity which is reduced due to RCSBP coverage.  The premium increases at the same time and by the same percentage that retired pay increases by cost-of-living adjustments.  The RCSBP participant who voluntarily terminates coverage for a natural person with an insurable interest (not a former spouse) will pay the Reserve add-on premium for the lifetime of the participant unless he takes such action to terminate prior to reaching 60 years of age.

	b.  Paragraph 5413 provides that for participants who terminate NIP coverage prior to reaching 60 years of age, the add-on premium is prorated based on the number of months the participant had coverage.

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends that his military records should be corrected to show his monthly premium for RCSBP has been terminated.  He further requests that all previously-paid premiums be refunded.

2.  On 6 May 2003, while still age 59 the applicant submitted a DD Form 2656 requesting, in effect, to opt out of his earlier election of a NIP SBP coverage.  However, this was not the proper procedure to terminate NIP coverage.  On 29 July 2003, he submitted an acceptable statement requesting to terminate NIP coverage.  These two requests indicate that the applicant did not understand the proper procedures for terminating NIP coverage, supporting his contention that he had not been thoroughly counseled in this regard.

3.  The applicant's subsequent Retiree Account Statements clearly show his NIP coverage has been stopped, however, after age 60.  Accordingly, he is by law, required to pay the RCSBP add-on cost for the remainder of his lifetime.

4.  While there is no error in the applicant's case, had he been properly informed about the procedures for terminating NIP coverage, it is more likely than not he would have submitted an acceptable request on 6 May 2003, before his 60th birthday.

5.  As a matter of equity the applicant's records should be changed to show that on 6 May 2003 he made a proper and acceptable request to terminate his NIP coverage and that such request was accepted and processed.


6.  Furthermore, recommendation is that his retired pay account should be audited and his RCSBP cost be prorated in accordance with the provisions of DODFMR, paragraph 5413 and this correction.

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:

	a.  showing that on 6 May 2003 the applicant made a proper and acceptable request to terminate his NIP SBP coverage, and that such request was accepted and processed prior to his 60th birthday; and

	b.  auditing his retired pay account and prorating his RCSBP cost in accordance with the provisions of the DODFMR.

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 stopping RCSBP cost deductions and refunding all previous deductions for RCSBP costs.



      _______ _  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)                                         AR20110010160



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ABCMR Record of Proceedings (cont)                                         AR20110010160



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