IN THE CASE OF:
BOARD DATE: 19 July 2012
DOCKET NUMBER: AR20110024007
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 waiver of the collection of retroactive Survivor Benefit Plan (SBP) premiums from February 2007 until 28 January 2011.
2. The applicant states he was not properly counseled when he was informed of his retirement and the option of SBP. He was never informed that he would have to pay back premiums. All the processing was done over the phone in January 2011.
3. The applicant provides:
* A letter from his counsel to the U.S. Army Human Resources Command (HRC), Fort Knox, KY with enclosure
* His DD Form 214 (Certificate of Release or Discharge from Active Duty)
* A DD Form 215 (Correction to DD Form 214)
* A DD Form 2656 (Data for Payment of Retired Personnel)
CONSIDERATION OF EVIDENCE:
1. The applicant's record shows that following prior active duty service in the U.S. Navy, he enlisted in the U.S. Army Reserve on 20 February 1990. He was ordered to active duty on 21 January 2004 for a period not to exceed 545 days in support of Operation Enduring Freedom. He was retained on active duty for the purpose of completion of medical care and treatment.
2. A 19 January 2007 HRC memorandum approved the applicant's release from active duty (REFRAD). The memorandum indicates he was found to be unfit by reason of permanent physical disability by a Physical Evaluation Board (PEB) and he was to be REFRAD under the provisions of Army Regulation 635-40 (Physical Evaluation for Retention, Retirement, or Separation), paragraph
4-24b(5) and 8-9a(3) not later than 19 February 2007. The memorandum further states:
a. Soldier has accumulated more than 20 years of qualifying service for retirement and has been issued an Eligibility for Retired Pay at Age 60 memorandum and will not be discharged.
b. the narrative reason for separation on the DD Form 214 will be "Disability-Other."
c. the following statement will be entered in item 18 (Remarks) of the
DD Form 214: "The Soldier has been separated by reason of physical disability and has selected Reserve Retirement in Lieu of Severance; No Severance Pay is Authorized."
3. On 21 May 2010, the Deputy Assistant Secretary of the Army (Review Boards) (DASA (RB)) approved the recommendation of the Department of Defense Physical Disability Board of Review (PDBR) to recharacterize the applicant's separation as a disability retirement with a combined disability rating of 40 percent (%) effective the date of his medical separation for disability with Reserve retirement. The DASA (RB) directed that all Department of the Army records of the applicant be corrected accordingly no later than 120 days from the date of this memorandum by:
a. Adjusting pay and allowances accordingly. Pay and allowance adjustment will provide payment of permanent retired pay at 40% effective the date of his original medical separation for disability.
b. Affording the individual the opportunity to elect SBP and medical TRICARE retiree options.
4. On 6 January 2011, a U.S. Army Physical Disability Agency (USAPDA) memorandum notified the applicant that as a result of a decision by the DASA (RB):
a. His original separation order had been revoked and an order permanently retiring him had been published and made retroactive to the day he separated with disability severance pay. A DD Form 215 would be issued correcting his DD Form 214.
b. The Defense Finance and Accounting Service (DAFS) would provide him with permanent retired pay and allowances effective the date of his original disability separation and recoup any severance pay previously paid.
c. He was advised he should immediately contact the nearest Retirement Services Officer (RSO) for assistance in completing the DD Form 2656 to activate his retirement account. The RSO would also provide him retirement and SBP counseling.
5. His DD Form 214, as amended by a DD Form 215, dated 12 January 2011, shows he was retired due to permanent disability. He completed 3 years and
27 days of net active service during the period covered by the DD Form 214 and 5 years, 7 months, and 13 days of prior active service.
6. The applicant provided an 18 January 2011 DD Form 2656 showing he elected SBP coverage for spouse and children based on his full gross pay.
7. The applicant provides a copy of a letter from his counsel to HRC relating that:
a. The applicant was retroactively retired with a 40% permanent disability rating by the PDRB on 21 May 2010
b. HRC submitted a bill to the applicant in the amount of $4,182.15.
(Apparently he is being asked to pay SBP premiums from February 2007 (when he was REFRAD) to January 2011 (when he was retired due to permanent disability).
c. While it makes sense for the applicant to pay premiums for SBP coverage it seems inequitable to charge him for a service to which his family never had access.
d. For the families of retirees who pass on after retirement, the SBP is a way of preserving some form of annuity for the survivors. However, in this case, the retiree never passed away and his family never had this coverage available to them from the time he was erroneously separated from active duty in 2007 until the moment he was retroactively retired by Board action in 2010.
e. In this case the retiree was erroneously denied coverage under SBP due to errors in the processing of his PEB case; now that the errors have been corrected, it seems inequitable to charge him for a benefit that his family never received.
8. 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. An election must be made prior to the effective date of retirement.
DISCUSSION AND CONCLUSIONS:
1. The available evidence shows the applicant was REFRAD effective
9 February 2007. On 6 January 2011 he was notified that his REFRAD was revoked and an order was issued to show he was permanently retired retroactive to his original separation date.
2. While the applicant's equity argument is not totally without merit, the fact remains that SBP is not a delayed-entry type program for a retiree. The retiree is either a participant or not a participant. If he/she participates, coverage and premiums begin effective the date of retirement. These premiums partially fund the program itself.
3. Had the applicant been fully and properly counseled on SBP when the PDBR changed his separation to a disability retirement his choice would have been to either participate and pay back premiums, or decline to participate with his spouse's concurrence. Relief or reconsideration may be appropriate if the applicant desires to decline to participate in the SBP with his spouses concurrence. However, it would not be appropriate to put the applicant in a better position than similarly-situated retirees who were properly advised regarding SBP by absolving him of his responsibility to pay SBP back premiums they are still required to 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 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) AR20110000971
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ABCMR Record of Proceedings (cont) AR20110024007
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