BOARD DATE:	  15 November 2012

		DOCKET NUMBER:  AR20120007559 


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, the daughter of a deceased former service member (FSM), requests, in effect, payment of the FSM's Survivor Benefit Plan (SBP) annuity.

2.  The applicant states she was supposed to be listed as the "daughter" not the "spouse" of the FSM, who died on 31 March 2011.  This error has resulted in denial of her SBP person of natural insurable interest annuity claim.  On 
1 October 1991, she was designated as FSM's natural insurable interest.  However, a temporary hold was placed on the SBP premiums in 2007 because of an error which was never corrected by the military.  The FSM and her mother were divorced in 1989, and her mother died in 1992.  There have been many attempts to correct clerical errors on behalf of the FSM; however, the military never followed up on the requested corrections.  

3.  The applicant provides:

* 6 retiree account statements
* 2 DD Forms 214 (Armed Forces of the United States Report of Transfer or Discharge)
* Certification for the dissolution of marriage, dated 6 June 1989
* Certificate of Birth, dated 10 October 1968
* Notification of eligibility for retired pay at age 60, dated 10 July 1991
* DD From 1883 (SBP Election Certificate), dated 1 October 1991
* Notice of receipt of DD Form 1883, dated 13 October 1991
* Certificate of Death, dated 24 June 1992
* Retirement Orders Number P-11-306999, dated 2 November 2000
* Certificate of Retirement, dated 21 November 2000
* Copy of retiree military identification card (ID card)
* Letter, dated 11 December 2006
* DD Form 149 (Application for Correction of Military Record), dated 
8 January 2007
* Letter from the FSM, dated 26 January 2007
* Certificate of Death, dated 31 March 2011
* Letter, from the Defense Finance and Accounting Service (DFAS), dated 20 April 2011
* 3 letters from the applicant
* Fiduciary's Probate Certificate, dated 9 May 2011
* Letter from the U.S. Army Human Resources Command (HRC), dated 
17 May 2011
* Letter from DFAS, dated 22 August 2011

CONSIDERATION OF EVIDENCE:

1.  After having had previous enlisted service, the FSM enlisted in the U.S. Army Reserve (USAR) 11 January 1977.  The highest rank/grade he attained was First Sergeant (1SG)/E-8.

2.  The applicant provided a certificate of birth showing she was born on 
10 October 1968 and listing the FSM as her father.

3.  She provided a certification for the dissolution of marriage which shows her mother and the FSM were divorced on 6 June 1989.

4.  She provided the FSM's notification of eligibility for retired pay at age 60, dated 10 July 1991.  This letter states the FSM was entitled to participate in the Reserve Component (RC) SBP, and that the RCSBP would enable him to provide an annuity for his spouse and other eligible beneficiaries.

5.  She provided the FSM's DD Form 1883, dated 1 October 1991, wherein he elected RCSBP coverage for a natural insurable interest, based on his full amount of retired pay, under Option C (Immediate Coverage).  He further listed the applicant's name, social security number, relationship (daughter), and address as the person he wanted to receive the annuity who had an insurable interest in him. 

6.  She provided a Department of the Army Reserve Personnel Form 289, dated 13 October 1991, showing the USAR Personnel Center received his completed DD Form 1883 on 13 October 1991.

7.  She provided a copy of her mother's certificate of death, which shows her mother died on 24 June 1992.  The death certificate listed the applicant as the informant.

8.  She provided a copy of the FSM's retiree ID card, certificate of retirement, and retirement Orders Number P-11-3069000, issued by the USAR Personnel Command, on 1 November 2000.  These orders show the FSM was placed on the retired list in the rank/grade of 1SG/E-8, on 21 November 2000, his 60th birthday.

9.  On 11 December 2006, by letter to DFAS, the FSM requested immediate termination of his SBP and natural insurable interest coverage.  He stated: 

	a.  "At the time of my retirement I had no beneficiaries.  I was divorced…and my ex-wife died in 1992.  I was required to supply her death certificate when I applied for my retirement pension [and]…I have been paying survivor [premiums] since my pension began in 2000.  Also, my daughter…was mistakenly listed as my wife."

	b.  "Because of all this confusion, I would like to know what happens to the SBP and NIP coverage I have paid into for the last six years.  Does my daughter receive it upon my passing or is it returned to me?"

	c.  in effect, he requested guidance so he could better understand the "dispensation of [his] past payments (approximately $24,000.00) into the SBP." 

10.  On 1 January 2007, the FSM submitted a DD Form 149 to the ABCMR, wherein he stated, in effect:

	a.  he had been paying for SBP and natural insurable interest premiums since 2000, approximately $24,000.00, but had not requested the coverage.  He wanted to know what happens to this money and whether or not he could expect a rebate.  At the time of his retirement he had no dependents.  He was divorced and his ex-wife died in 1992.  He was required to supply his ex-wife's death certificate when he applied for his retirement pension.  His daughter was mistakenly listed as his wife.  

	b.  when he received his first retirement check he called DFAS and was told that SBP and natural insurable interest were required for the first two years.  He went along with it because he did not know his daughter was listed as his wife.

11.  On 26 January 2007, by letter to DFAS, the FSM stated he had recently received his retiree account statement for January 2007 and noticed his marital status was incorrectly listed as married.  He requested DFAS change his marital status to single.  He indicated he was divorced, his ex-wife had died in 1992, and that he had been required to supply her death certificate when he applied for his retirement pension.  In addition to his request, he asked why $28.55 was being deducted from his gross pay and how much SBP coverage cost.

12.  On 16 August 2007, the ABCMR sent a letter to the FSM regarding his 1 January 2007 application concerning the withholding of SBP premiums.  The letter stated his application was being returned to him without action because he had failed to exhaust his administrative remedies, and advised him to pose his request to DFAS.  

13.  The applicant submitted the FSM's certificate of death, which shows he died on 31 March 2011.  His death certificate listed his marital status as divorced and the applicant as the informant.

14.  On 20 April 2011, by letter to the applicant, a DFAS official expressed condolences for her father's death and directed her attention to possible benefits to which she may be entitled, specifically, a claim for unpaid compensation (the unpaid portion of the FSM's retirement pay or arrears of pay).  The letter further stated that no allotments were being deducted from his retirement pay.

15.  On 25 April 2011, by letter to HRC, the applicant stated: 

* She had enclosed the documents HRC requested in order to obtain the annuity the FSM placed in her name
* There was a typographical error in the letter HRC sent to her wherein she was referred to as both the FSM's daughter and spouse
* She clarified she was the FSM's daughter and only next of kin and  indicated her last name had been spelled incorrectly in HRC's letter
* She informed HRC that the FSM's DD Form 1883 designated her as the natural insurable interest and sole beneficiary of his SBP

16.  On 28 April 2011, by letter to DFAS, the applicant stated:

* She had enclosed the necessary documentation DFAS requested regarding the FSM's death
* She had been informed the last retirement payment would be made via direct deposit, and further payments would be terminated due to the FSM's death
* She understood she was not entitled to compensation regarding his retirement pay because she was not his dependent
* She was designated as his natural insurable interest SBP beneficiary on his DD Form 1883
* She was upset when DFAS stated no allotments were being deducted from his retirement pay because he paid into the RCSBP and SBP since 1990
* She indicated she had enclosed copies of his retiree account statements as proof of the RCSBP and SBP deductions

17.  She provided six copies of his retiree account statements.

	a.  The statement effective 22 November 2000 shows that SBP costs in the amount of $317.83 had been deducted and his federal withholding status was listed as married.

	b.  The statement effective 6 December 2005 shows he had deductions for natural insurable interest SBP coverage in the amount of $324.60, RCSBP in the amount of $38.21, and his federal withholding status was listed as married.

	c.  The statement effective 18 January 2007 shows he had deductions for natural insurable interest SBP coverage in the amount of $00.00, RCSBP in the amount of $28.55, and his federal withholding status was listed as married.

	d.  The statement effective 16 August 2010 shows he had deductions for natural insurable interest SBP coverage in the amount of $00.00, RCSBP in the amount of $27.48, and his federal withholding status was listed as married.

	e.  The statement effective 29 January 2011 shows he had deductions for natural insurable interest SBP coverage in the amount of $00.00, RCSBP in the amount of $27.48, and his federal withholding status was listed as married.

18.  She provided a Fiduciary's Probate Certificate, dated 9 May 2011, which shows she was appointed to act as the fiduciary of the FSM's estate for a period of one year.

19.  She provided a letter from HRC, dated 17 May 2011, wherein HRC referred to her as both the FSM's daughter and spouse.

20.  She provided a letter from DFAS, dated 22 August 2011, wherein DFAS referred to her application for the FSM's SBP annuity and stated:

	a.  They were providing a copy of the FSM's letter to DFAS, dated 11 December 2006, wherein the FSM requested immediate termination of his SBP and natural insurable interest coverage.
	b.  Under the Department of Defense Financial Regulations, Volume 7B, chapter 430702, a retiree may voluntarily terminate his natural insurable interest coverage.

	c.  Based on the documents DFAS received, the FSM's natural insurable interest coverage was terminated on 1 January 2007; therefore, her application requesting his SBP annuity was denied.

21.  She provided a letter she sent to her Member of Congress, dated 15 March 2012, wherein she stated, in effect:

* Her father passed away on 31 March 2011 and left her an SBP annuity
* The SBP annuity was initiated on 1 October 1991
* Many attempts were made to correct a typographical error in the FSM's records; however, the error was never resolved
* The typographical error in his records led to the denial of her SBP annuity claim
* Her parents were divorced in 1989 and he mother died in 1992
* Prior to the FSM's death he informed her that her deceased mother was to be the recipient of the SBP annuity, which was incorrect
* When a request for corrections was sent to the ABCMR on her father's behalf the ABCMR had her listed as the FSM's spouse and daughter
* The proof of this typographical error is listed on a document sent to her in 2011
* In 2006 the FSM placed a temporary hold on the SBP premiums being taken out of his military retirement pay
* He paid approximately $24,000.00 in SBP premiums from 2000 to 2006
* The FSM petitioned the ABCMR again in 2007 in an attempt to correct the errors in his record and reinstate the SBP annuity
* In the interim, SBP premiums were withheld from his pay until his death 
* There is no document on record specifically stating she was to be terminated as the person of insurable interest
* The military accepted a document indicating termination of coverage without requiring a legal witness
* The FSM did exactly as he was told by following protocol in order to correct the error in his record
* The military failed to fulfill their responsibility to him by providing misinformation and not following through on a legal matter
* The military should be held accountable for their mistake
* An official at HRC informed her, in April 2011, that she was entitled to full compensation and submitted her documents to DFAS
* An official at DFAS informed her, in August 2011, that her claim could not be processed until the error in her father's record was corrected

22.  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.  A person who is not married and does not have a dependent child upon becoming eligible to participate in the SBP may elect to provide an annuity to a person with an insurable interest in the member.  Premiums for insurable interest coverage are generally higher than for any other category of coverage.

23.  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; and (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.

24.  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 of a written request to discontinue participation in the SBP to the Secretary concerned.  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.

25.  Title 10, U.S. Code, section 1452c(1), states the retired pay of a person who has elected to provide an annuity to a person under section 1450(a)(4) (i.e., insurable interest coverage) shall be reduced as follows:  Subsection 1452c(1)(B):  in the case of a person providing a Reserve Component annuity, the reduction shall be by an amount prescribed under regulations of the Secretary of Defense.

26.  Office of the Assistant Secretary of Defense (Force Management Policy) memorandum, dated 17 March 1995, subject:  Sections 637 and 638 of the National Defense Authorization Act for Fiscal Year 1995, Public Law 103-337, October 5, 1994, provided that SBP premiums will no longer apply as of the effective date of termination of natural insurable interest coverage except if the participant terminating insurable interest coverage is a participant of a Reserve Component annuity.  In such case, the Reserve Component premium add-on will apply for life.

DISCUSSION AND CONCLUSIONS:

1.  There is no evidence in the FSM's military record to show the applicant was listed as the FSM's daughter and spouse.  However:

	a.  It appears, based on the FSM's retiree account statements, the FSM, upon completing the paperwork to receive his retirement pension, may have listed himself as married when he completed forms for his federal tax withholdings.  This is the only place he appears to be listed as married.

	b.  She received a letter from HRC referring to her as both his daughter and spouse.  However, there is no evidence to show this typographical error was based on an entry in the FSM's record listing her as spouse and daughter.  It appears this error was, instead, an error which could have been prevented by thoroughly proofreading the letter before it was mailed.

	c.  She was listed as the FSM's daughter and person of insurable interest on his DD From 1883; therefore, it is clear that she is his daughter and not his spouse.

2.  The FSM's retiree account statements show no allotment deductions from the FSM's retirement pay; however, there were deductions taken out for natural insurable interest SBP, prior to the FSM cancelling this coverage, and RCSBP coverage, which continued to be deducted from 2000 unit the FSM's death.

	a.  The FSM elected to participate in the RCSBP, under option C.  The RCSBP gives service members who qualified for reserve retirement but were not yet age 60 the option to provide an annuity to their beneficiary if they die before turning 60.  Service members who select option C, which is irrevocable, have elected for their beneficiary to receive an annuity immediately upon their death if they die before age 60.  However, if the service member does not die before turning age 60, the RCSBP costs for option C are deducted from the service member's retired pay until their death.  These RCSBP premiums pay for the protection provided had the FSM died prior to age 60.

	b.  Once a Reserve service member who elected to participate in the RCSBP, under option C, reaches age 60 their coverage changes from RCSBP coverage to SBP coverage and they begin paying the SBP premiums in addition to the RCSBP premiums.

	c.  Public law states natural insurable interest SBP coverage may be canceled by the retiree if the insurable interest beneficiary is not their former spouse.  The voluntary termination of natural insurable interest SBP coverage is accomplished when the retiree submits a written request to the Secretary of the Army.  Once SBP participation is discontinued the premiums paid for the earlier participation in the SBP are not refunded.

	d.  When a retired service member cancels natural insurable interest SBP coverage the SBP premiums will no longer apply as of the effective date of termination of natural insurable interest coverage.  However, if the retiree terminating the natural insurable interest coverage is a participant of a Reserve Component annuity, the RCSBP premium add-on will apply for life.

3.  The evidence of record shows the FSM requested termination of his natural insurable interest SBP coverage on 11 December 2006 and that coverage, as indicated in his retiree pay statement, was cancelled effective 1 January 2007.  This was not a temporary suspension of his SBP premiums as indicated by the applicant, but a full and complete termination of the natural insurable interest SBP coverage.  

4.  The FSM's retiree pay statements show that after the cancellation of his natural insurable interest SBP coverage he continued to pay only for the RCSBP premiums, as required by law.

5.  Therefore, based on the forging evidence, she is not entitled to 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)                                         AR20120007559





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ABCMR Record of Proceedings (cont)                                         AR20120007559



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