IN THE CASE OF:	  

		BOARD DATE:	  17 May 2012

		DOCKET NUMBER:  AR20110023565 


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 his Survivor Benefit Plan (SBP) coverage.

2.  The applicant states:

* Upon his divorce in 2001, he notified officials at the Defense Finance and Accounting Service (DFAS) that he was divorced and did not want to participate in the SBP
* When he applied for retired pay in January 2011, he and his new spouse elected not to participate in the SBP
* When he received his first Retiree Account Statement, he noticed that he was enrolled in the SBP and his first wife was listed as the beneficiary
* DFAS corrected the next pay statement by taking his first wife's name off but continued the SBP coverage
* He was unaware that he had only one year upon his remarriage to disenroll from the SBP
* He never requested reinstatement of the SBP for his new spouse
* He followed the rules and completed the proper forms; he should not have to be penalized for following the rules

3.  The applicant provides:

* Self-authored time-line of events
* An extract of a handbook for the Guard and the Reserve

* DD Form 2656 (Data for Payment of Retired Personnel)
* Retirement order
* Approval letter of retirement application
* Certificate of Retirement
* DFAS letter welcoming him to the Retired roll

CONSIDERATION OF EVIDENCE:

1.  The applicant was born on 11 April 1951.  

2.  He served in an enlisted status in the Regular Army, U.S. Army Reserve, and Army National Guard (ARNG) from 30 October 1969 top 28 August 1983.  He and his former spouse Suzanne were married on 12 February 1977.

3.  He was appointed as a Reserve warrant officer and executed an oath of office on 29 August 1983.  He served in a variety of stateside or overseas assignments and he attained the rank of chief warrant officer four (CW4).

4.  On 30 October 1996, the U.S. Army Human Resources Command issued the applicant a 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 would be eligible for retired pay upon application at age 60.

5.  On 13 July 1997, he completed a DD Form 1883 (Survivor Benefit Plan) wherein he indicated he was married to Suzanne and they had two dependents, Brxxxxx, born on 29 September 1980, and Shxxx, born on 27 June 1983.  He elected "spouse and children" Reserve Component SBP (RCSBP) coverage, based on the fill amount, Option B (elect 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).  His spouse at the time concurred with his election.  The form states, “IMPORTANT:  The decision you make with respect to participation in this Survivor Benefit Plan is a permanent irrevocable decision.  Please consider your decision and its effect very carefully.” 

6.  On 1 June 2001, he and Suzanne were divorced.  Their divorce decree is not available for review with this case.  

7.  On 12 August 2007, he married Patricia.  He states that he did not notify DFAS of his remarriage until a much later date (April 2011).


8.  On 10 January 2011, in connection with his upcoming retirement, he completed a DD Form 2656.  He indicated he was married to Patricia and had no eligible dependents under the SBP.  He elected not to participate in the SBP.  His spouse concurred with his election.

9.  He was placed on the Retired List in the rank of CW4 on 11 April 2011, his 60th birthday.  

10.  He submits a narrative related to the SBP/RCSBP.

11.  Public Law 95-397, enacted 30 September 1978, provided a way for Reserve Component 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.  Elections are made by category, not by name.  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

Once a member elects either option B or option 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 the RCSBP - the options automatically roll into SBP coverage.  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.

12.  Public Law 105-85, enacted 18 November 1997, established the option to terminate SBP participation.  Retirees have a 1-year period beginning on the second anniversary of the date on which their retired pay started to withdraw from SBP.  The spouse's concurrence is required.  No premiums will be refunded to those who opt to disenroll.  The effective date of termination is the first day of the first calendar month following the month in which the election is received by the Secretary concerned.


13.  DOD Financial Management Regulation, Volume 7, Chapter 54, dated April 2012, states in paragraph 5406 (Changes in Election and Coverage): Sub-paragraph 540601 (in the case of a later-acquired spouse and/or child), this election must be received within 1 year of the event.   Sub-paragraph 540601(b) states a member with spouse or spouse and child coverage loses the spouse beneficiary through death or divorce, the member may, upon remarriage, increase the level of coverage up to and including full retired pay, or elect not to resume spouse coverage.  If the member takes no action, spouse coverage will automatically resume upon the one-year anniversary of the remarriage.

DISCUSSION AND CONCLUSIONS:

1.  Subsequent to receiving his 20-year letter, the applicant submitted a DD Form 1883 wherein he elected enrollment in the RSCBP, spouse and child coverage, under Option B.  This means in the event he died before reaching age 60, his beneficiary would have been entitled to an annuity.  The form also warned him that he was making a permanent, irrevocable decision

2.  Once a member elects either option B or option 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.  Thus, the election he made in 2011 on the DD Form 2656 was invalid because he did not have the option to decline at that time.

3.  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.  This cost is the cost of coverage the applicant’s family enjoyed between the date he made the election in 1997 and the date he turned 60.  Had he died during this period, his beneficiary would have been entitled to the annuity.  

5.  Nevertheless, retirees have a 1-year period beginning on the second anniversary of the date on which their retired pay started to withdraw from SBP.  The spouse's concurrence is required.  No premiums will be refunded to those who opt to disenroll.  The request may be submitted directly to the Defense Finance and Accounting Service.  The applicant's withdrawal window will open in February 2013.  However, the RCSBP cost would continue indefinitely regardless of whether the member terminates coverage. 

6.  In view of the foregoing evidence, there is insufficient evidence to support granting him the requested relief.

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)                                         AR20110023565



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ABCMR Record of Proceedings (cont)                                         AR20110023565



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