IN THE CASE OF:	  

		BOARD DATE:	  29 March 2012

		DOCKET NUMBER:  AR20110016959 


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 records to reflect his wife as the sole beneficiary of his Survivor Benefit Plan (SBP) coverage.

2.  The applicant states his unit administrator (UA) in the Pennsylvania Army National Guard (ARNG) advised him to elect Reserve Component (RC) SBP (RCSBP) for "child only."  The UA indicated he would be able to update his SBP to "spouse only" when he reached age 60 which seemed logical at the time.  The information was incorrect.  Not only is he not allowed to update this election, but he has to pay for RCSBP child coverage for his children even though they are now ineligible due to their ages.  He erroneously elected RCSBP under option B due to bad counseling from his UA and asks the Board to approve the election change based on his full retirement pay.

3.  The applicant provides:

* marriage certificate
* DD Form 1883 (SBP Election Certificate), dated 3 January 1995
* DD Form 2656 (Data for Payment of Retired Personnel), dated 4 October 2007
* Defense Finance and Accounting Service (DFAS)-Cleveland (CL) Form 7220/148 (Retiree Account Statement), dated 2 December 2010
* letter to DFAS, dated 21 January 2011
* letter from DFAS, dated 22 March 2011



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, and 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.  The applicant's record shows he was born on 21 July 1949.

3.  Following active duty service from 1969 to 1971, he appears to have enlisted in the ARNG and served through multiple reenlistments or extensions.  He attained the rank/grade of first sergeant (1SG)/E-8.

4.  On 21 October 1972, the applicant married his spouse Susan.

5.  On 20 December 1994, the Pennsylvania ARNG issued the applicant his Notification of Eligibility for Retired Pay at Age 60 (20-year letter).  This letter notified him that he had completed the required years of service and he would be eligible for retired pay upon application at age 60.

6.  On 3 January 1995, he completed a DD Form 1883 wherein he indicated he was married and he had dependent children.  He listed his son Shawn, born on 7 December 1977, and his daughter Stacy, born on 9 September 1981, as his dependents.  He further elected option B, "child-only" coverage, full amount, under the RCSBP.  Option B states, "I elect to provide an annuity beginning on the 60th anniversary of my birth should I die on that date or the day after date of death should I die on or after my 60th birthday."  His spouse concurred with his election and placed her signature in the appropriate block.

7.  On 4 October 2007, he completed a DD Form 2656 and elected SBP coverage for his spouse based on the full gross pay without supplemental SBP.  He indicated he did not have any dependent children.  It is unclear if this form was forwarded to DFAS.

8.  He was placed on the Retired List in the rank/grade of 1SG/E-8 on 21 July 2009, his 60th birthday.

9.  He provides a DFAS-CL Form 7220/148, dated 2 December 2010.  This statement shows his RCSBP coverage type as "child only."

10.  On 21 January 2011, he wrote to DFAS and asked that his RCSBP coverage be corrected from "child-only" to "spouse-only" coverage.  He stated:

	a.  His UA advised him to elect RCSBP for "child only" when he received his 20-year letter.  The UA indicated he would be able to update his RCSBP to "spouse only" when he reached age 60 because his children would not be eligible.  He and his wife signed the DD Form 1883 on 3 January 1995 agreeing to this decision.

	b.  On 4 October 2007, he requested RCSBP for his spouse for the full amount since his children were no longer eligible due to their ages.

	c.  On 1 August 2009, he received his first retirement check and noticed the SBP election was still showing "child only."

	d.  On 20 August 2009, he and his spouse met with the Retirement Services Officer (RSO) at Carlisle Barracks, PA, to request a correction.  The correction was completed and faxed to the DFAS Retirement Pay Center in Cleveland, OH.

	e.  When he received his pay statement and 2010 Internal Revenue Service Form 1099R (Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, Individual Retirement Accounts, Insurance Contracts, etc.), he realized the SBP election was still "child only."

11.  On 22 March 2011, he received a letter from DFAS.  The letter stated:

	a.  He and his spouse declined coverage at the time of his retirement; therefore, he is unable to add his spouse to his SBP at the current time.  Although his children are no longer eligible, he must still pay the SBP cost because he elected to have his children covered in case he died before reaching age 60.

	b.  Occasionally an open season enrollment period is offered to retirees to allow them to enroll in SBP.  When one is available, it will be posted in his retiree newsletter and on the DFAS website.  If he would like to terminate the RCSBP cost, he could complete and return a DD Form 2656 between the second and third year of his retirement.

12.  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.  An election, once made, was irrevocable except in certain circumstances.  Since its creation, it has been subjected to a number of substantial legislative changes.

13.  Public Law 95-397, enacted 30 September 1978, provided a way for RC members who qualified for Reserve retirement, but were not yet age 60 and eligible to participate in the SBP, to provide an annuity for their survivors should they die before reaching age 60.  Three options were available:

* option A – elect to decline enrollment and choose at age 60 whether to start SBP participation
* option 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
* option C – elect that a beneficiary receive an annuity immediately upon their death if before age 60

14.  Once a member elects either option 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; the options automatically roll into SBP coverage.

15.  The National Defense Authorization Act for Fiscal Year 2005 established an open season for enrollment to be conducted from 1 October 2005 through 30 September 2006.  The retiree must pay monthly premiums starting on the date of enrollment and a buy-in premium covering all the costs that would have been paid for the election if it had been made at the first opportunity to do so.  Extensive publicity was given in Army Echoes.

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends that his records should be corrected to reflect his spouse as the sole beneficiary of his SBP coverage.

2.  The evidence of record shows the applicant submitted a DD Form 1883 on 3 January 1995 following receipt of his 20-year letter wherein he elected to participate in the RCSBP "child-only" coverage in the presence of an RSO counselor.  His spouse concurred with this election.

3.  On 4 October 2007, he completed a DD Form 2656 electing spouse coverage.  Although it is unclear if he submitted this form to DFAS, it would have been invalid in any case.  Since the applicant elected option B, "child-only" coverage, at the time he received his 20-year letter, he did not have the option to change this election at age 60 unless there had been an open season.  There was no open season in effect at the time he completed the DD Form 2656.

4.  However, it appears he was not counseled properly.

	a.  His election of option B in 1993 indicates he understood he had the option to change his election at age 60.  After all, he and his spouse who concurred with him at the time, knew their children would be ineligible to receive benefits well before he turned age 60.

	b.  Additionally, prior to reaching age 60 and in connection with his retired pay application, he completed a DD Form 2656 wherein he elected "spouse-only" coverage.  After his retirement, he continued to communicate with DFAS regarding his desire to have "spouse-only" coverage.

5.  It is clear that the applicant's intent was to have SBP coverage for his spouse and children and he may have been improperly counseled.  As such and as a matter of equity, his records should be corrected to show he elected "spouse and children" RCSBP, option B, upon receipt of his 20-year letter in 1993.

6.  It is noted here that as a result of this correction, the applicant will be responsible for the higher premium rate for "spouse and children" coverage and although the children have aged off, he remains responsible for payment of a portion of the cost for children coverage to account for their coverage from 1993 (the date he made the election) until July 2009 (the date he turned 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 the evidence presented is 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 electing "spouse and children" RCSBP coverage, option B, on 3 January 1995
* directing DFAS to audit the applicant's records and reimburse or collect payment of any monies due as a result of these corrections

2.  The Board further determined 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 correcting his records to show "spouse-only" coverage.



      ____________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)                                         AR20110016959



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ABCMR Record of Proceedings (cont)                                         AR20110016959



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