IN THE CASE OF:	  

		BOARD DATE:	  2 July 2014

		DOCKET NUMBER:  AR20130019803 


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 her participation in the Reserve Component Survivor Benefit Plan (RCSBP) for "insurable interest." 

2.  The applicant states she was not aware and she did not know that insurable interest coverage for her brother would cost 40 percent of her base pay.  She was not and she is not now married. 

3.  The applicant provides:

* Letter from a staff sergeant (SSG)
* Notification of Eligibility for Retired Pay at Age 60 (20-Year Letter)
* Army National Guard (ARNG) Retirement Points History Statement
* Orders transferring her to the Retired Reserve
* DD Form 1883 (SBP Election Certificate)

CONSIDERATION OF EVIDENCE:

1.  The applicant's records show she was born in August 1954.  She will reach 60 years of age in August 2014.  

2.  She enlisted in the ARNG on 22 November 1982.  She served through multiple extensions in a variety of assignments and she attained the rank/grade of master sergeant (MSG)/E-8. 

3.  On 19 December 2002, she was issued a Notification of Eligibility for Retired Pay at Age 60. 

4.  On 18 January 2003, she completed a DD Form 1883.  She indicated she was not married and she had no dependent children.  She elected RCSBP coverage for "insurable interest," Option C (immediate coverage), based on the full amount.  She named her brother Robbie as the person who had insurable interest in her.  The "Monthly Cost and Annuity" section of the DD Form 1883 states: 

Natural Insurable Interest: Cost of coverage is 10 percent of full retired pay, plus an additional 5 percent of full retired pay for each full five years that your age exceeds that of the natural interest person.  The total cost may not exceed 40 percent of retired pay. 

5.  She authenticated the DD Form 1883 with her signature and acknowledged her understanding of the section that states "the decision you make with respect to participation in the SBP is permanent irrevocable decision.  Please consider your decision and its effects very carefully." 

6.  She was discharged from the ARNG on 21 November 2005 and she was transferred to the Retired Reserve. 

7.  She provides a statement from SSG DD from the Kentucky ARNG who states the applicant came to her office to complete a DD Form 2656 (Data for Payment of Retired Personnel).  She (SSG DD) noticed the applicant had previously completed a DD Form 1883 and elected an insurable interest.  The unit that handled her DD Form 1883 did not give her information on how to fill out the form.  The applicant was unaware that this cost would be 40 percent of her base pay. 

8.  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
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.  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.

9.  Since 5 October 1994, insurable interest coverage for a beneficiary who is not a former spouse may be voluntarily terminated at any time by making a signed written request via DD Form 2656-2 (SBP Termination Request) to do so that identifies a member by name and social security number.  Requests to terminate insurable interest may be addressed to the Defense Finance and Accounting Service (DFAS) at any time. 

DISCUSSION AND CONCLUSIONS:

1.  When the applicant received her 20-year letter, she submitted a DD Form 1883 wherein she elected enrollment in the RSCBP, insurable interest coverage, under Option C.  The election certificate warned her that the decision she makes with respect to participation in the SBP is permanent irrevocable decision and asked her to consider her decision and its effects very carefully.  Moreover, the same election certificate clearly spells out the cost for each option, including the insurable interest election.  

2.  The decision to participate in or disenroll from the RCSBP/SBP is a personal decision.  She made that choice.  This means in the event she died before reaching age 60, her beneficiary (insurable interest) would be entitled to an annuity.  The options were clear. 

3.  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.  

4.  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 enjoyed between the date she made the election in January 2003 and the date she would turn 60.  

5.  However, insurable interest coverage for a beneficiary who is not a former spouse may be voluntarily terminated at any time by making a signed written request.  Requests to terminate insurable interest may be addressed to DFAS at any time. There is no evidence she communicated her intent to terminate this coverage to DFAS.  

6.  Therefore, the applicant's current application to this Board, dated 25 October 2013, is accepted as sufficient to show she properly requested termination of SBP for a natural person with insurable interest.  The applicant is advised that the Reserve Components premium add-on will be deducted from her retired pay for life for the protection her brother received had she died before reaching age 60.

BOARD VOTE:

___x____  ____x___  ____x___  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

The Board determined that the evidence presented was sufficient to warrant a recommendation for relief.  As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected by showing she made a proper written request to terminate her natural person with insurable interest SBP coverage on 25 October 2013 and that it was received and processed by the appropriate office in a timely manner to be effective 1 November 2013.



      _______ _   _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)                                         AR20130019803



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ABCMR Record of Proceedings (cont)                                         AR20130019803



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