IN THE CASE OF:	  

		BOARD DATE:	  3 July 2012

		DOCKET NUMBER:  AR20110024257 


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 his Survivor Benefit Plan (SBP) coverage be terminated and all monies plus interest be refunded.

2.  He states the Defense Finance and Accounting Service (DFAS) stated they would make a date of birth and name change only on his Retiree Account Statement (RAS).  He maintains that DFAS added his 10 year old daughter to SBP causing him to incur a detrimental financial hardship debt of $14,030.53.  He explains when he retired in 1994, he elected to decline SBP coverage.  However, DFAS used his DD Form “1183” (i.e., a DD Form 1883, SBP Election Certificate) dated 26 September 1979, to start premium payments.  He offers he remarried in December 1988, retired in 1994, and declined SBP.  

3.  He provides the following:

* DFAS Administrative Report, dated 10 March 2011
* Self-authored letter, dated 7 December 2011
* Applicant's letter to DFAS, dated 10 May 2010
* DFAS letter to applicant dated 21 October 2010
* RAS, dated 24 April 2010
* DD Form 1883, dated 26 September 1979
* Applicant's Appeal of Initial Determination with enclosures, dated 4 May 2011
* Applicant's "Time Line"
* Congressional correspondence, dated 19 January 2011
* DFAS Memorandum, Subject:  Incomplete Waiver Package, dated 29 July 2011
* Spouse sworn statement, dated 1 December 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, 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 9 February 1977, as a U.S. Army Reserve Soldier, he received his notification of eligibility for retired pay at age 60 (his 20-year letter).  

3.  On 26 September 1979, he completed a DD Form 1883 indicating that he was not married, but had children.  He elected full immediate coverage for children only.  The DD Form 1883 stated "IMPORTANT:  The decision you make with respect to participation in the Survivor Benefit Plan is a permanent irrevocable decision.  Please consider your decision and its effect very carefully."  He listed his two adopted children with dates of birth of 1 March 1966 and 16 March 1967 as his beneficiaries.

4.  On 31 August 1994, he was retired for attaining the maximum allowable age. His date of birth was listed as 7 August 1934.

5.  His RAS, dated 24 April 2010, shows his SBP coverage was listed as "Child Only" at a cost for Reserve Component (RC) SBP of $1.53.  The child's date of birth was listed as 16 March 1967.  The statement said he had paid 188 months toward his 360 months of paid up RCSBP coverage.  It further stated that since he had already reached age 70, once he paid 360 months toward his coverage, his costs would be terminated, but his coverage would remain active.

6.  On 10 May 2010, he requested DFAS delete the child with the date of birth listed as 16 March 1967 and add his new child with the date of birth of 
13 October 2000.  

7.  On 21 October 2010, DFAS explained that an adjustment to his RCSBP portion of his retired pay account was made based on his youngest child’s birth certificate.  The adjustment in his coverage was changed from "No Beneficiary Child" to "Child" based on the full base amount of $1,277.68 with an effective date of 19 May 2010.  As a result of the adjustment, his monthly RCSBP cost was changed from $1.53 to $128.15.  

8.  On 30 December 2010, DFAS notified the applicant that an adjustment was made to his RCSBP from 1 November 2000 through 31 May 2010 in the amount of $14,030.53. 

9.  On 8 February 2011, the applicant submitted a DD Form 2789 (Waiver/Remission of Indebtedness Application) with supporting documents to DFAS requesting remittance of his debt.  He also included a letter to his senator in which he requested that his daughter be removed from his RCSBP.  In his letter he explained that he was given the wrong information by a DFAS representative who instructed him to send a request along with a birth certificate to have his dependent’s name changed on his RCSBP.  He added that at no time did the DFAS representative advise him or even mention his monthly RCSBP premiums would change from $1.53 to $128.00.  He reiterated his request to cancel his RCSBP, refund all money, and waive the $14,030.53 debt.

10.  On 19 January 2011, DFAS responded to the Senator's inquiry on behalf of the applicant.  

   a.  DFAS stated a review of the applicant's RCSBP election reflected that he elected for immediate, child only, RCSBP annuity option on 29 September 1979. Upon the applicant's retirement on 7 August 1994, his current youngest child was no longer eligible for an RCSBP annuity due to age.  However, since his child was eligible to receive the SBP annuity if the applicant had died prior to his 60th birthday, he had to pay an additional amount for the immediate survivor annuity option called the Reserve Component cost factor.   

	b.  DFAS stated that on 19 May 2010 the applicant notified DFAS that he wanted to add his daughter as his RCSBP beneficiary.  DFAS stated the information the applicant was provided by their Customer Care representative regarding the changing of RCSBP costs in a prior telephone conversation was incorrect.  Since the applicant held a previous RCSBP child only election, any future child of his was automatically covered as his SBP beneficiary.  The applicant was paying only the Reserve Component cost factor, not RCSBP premiums from his date of retirement until May 2010.  However, his premiums should have started on
1 November 2000, the first of the month following the newest child's birth.  Therefore, he incurred a debt of $14,030.53 for unpaid RCSBP premiums.

11.  On 10 March 2011, DFAS informed the applicant that his request for waiver consideration of a $14,030.53 indebtedness resulting from the overpayment of retired pay due to non-deduction of RCSBP premiums during the period 
1 November 2000 through 31 May 2010 was denied.  DFAS reiterated the information contained in their reply to the Senator, as cited above.  Additionally, DFAS stated an administrative error or mistake on the part of the Government in making an erroneous payment was a factor for consideration in determining whether waiver was appropriate.  However, the fact that an erroneous payment was solely the result of administrative error or mistake on the part of the Government was not, in and of itself, a sufficient basis for granting a waiver.  

12.  On 4 May 2011, the applicant appealed the DFAS initial determination of his SBP debt.  He provided the same documents and argument as previously provided to his Senator and to the ABCMR.  

13.  He provided a statement from his wife dated 1 December 2011 indicating that she was aware that if the applicant preceded her and her daughter in death, they will not receive the SBP payment.  She also stated that at no time did she or the applicant want to add their daughter to his SBP.  She said he declined SBP in 1994 when he retired.  She offered that she was also retired Army and had their daughter on her SBP election.

14.  Public Law 92-425, the SBP, enacted 21 September 1972, 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.  Changes in SBP options are not authorized except in specific instances as authorized by law.  The term "dependent child" means a person who is unmarried; is under 18 years of age or at least 18 but under 22 years of age and pursuing a full-time course of study in a high school, college, or comparable recognized educational institution; is incapable of self support because of a mental or physical incapacity existing before the person's 18th birthday; or is the child of a person to whom the SBP applies, including an adopted child, a step or foster child, or a recognized natural child who lived with that person in a regular parent-child relationship.  

15.  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; (C) elect that a beneficiary receive an annuity immediately upon their death if before age 60.  If death does not occur before age 60, the RCSBP costs for options B and C are deducted from the member’s retired pay.  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 – it automatically rolls 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 had the member died prior to age 60.

16.  Information obtained from the website concerning SBP states that a child  acquired after retirement is automatically covered if child coverage was taken at retirement.  No change in costs will occur unless costs were suspended because all other children became ineligible.  If child costs were suspended, costs will be recomputed using the current ages of the member and youngest child.
http://www.military.com/benefits/survivor-benefits/sbp-child-coverage-cost-and-benefits.html

DISCUSSION AND CONCLUSIONS:

1.  Evidence of record shows in a letter dated 10 May 2010, the applicant requested his child born on 13 October 2000 be added as his RCSBP/SBP beneficiary.  DFAS added the child as his RCSBP beneficiary and based on the addition, he incurred a debt of $14,030.53 for unpaid RCSBP/SBP premiums.  The fact that he now argues he was misinformed by a DFAS representative is not sufficient justification to terminate his RCSBP/SBP coverage.  The applicant’s failure to notify DFAS in a timely manner of his daughter’s birth prevented DFAS from making timely deductions for the added SBP cost.    

2.  It is unfortunate that he was given erroneous information when he inquired about updating his beneficiary information, but that erroneous information was not the cause of the debt.  The debt began to accrue upon his daughter’s birth.  There are numerous sources of information contained on the website concerning SBP and in Army Echoes.  Additionally, he could have sought information on the RCSBP/SBP by contacting a Retirement Services Officer at the nearest military installation.  Further, had the applicant died between the time his child was born and the addition of his child on his RCSBP/SBP (10 years) she would have been covered and she would have received an annuity.  The applicant does not qualify for a statutorily-mandated basis for termination of SBP, and has failed to demonstrate the debt constitutes an error or injustice.


3.  In view of the foregoing, there is no basis for granting his 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)                                         AR20110024257



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ABCMR Record of Proceedings (cont)                                         AR20110024257



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