BOARD DATE: 28 October 2014
DOCKET NUMBER: AR20140002702
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 correction of his military records to show he properly terminated his Reserve Component Survivor Benefit Plan (RCSBP) coverage for a natural interest person (NIP) effective 1 November 2012.
2. The applicant states, in effect:
a. He wants reimbursement for the SBP.
b. He requested termination of the SBP NIP coverage before he received his first payment for retired pay. His niece is the NIP he elected as his SBP beneficiary in 1995. He sent four letters to the Defense Finance and Accounting Service (DFAS) beginning in October 2012 requesting termination. Premiums were taken out except in January 2013.
c. The SBP NIP coverage was finally terminated in May 2013 per his request, but not until after paying 6 months of premiums.
3. The applicant provides:
* five letters to DFAS
* seven Retiree Account Statements
CONSIDERATION OF EVIDENCE:
1. The applicant was born on 14 October 1952. Having prior service in the U.S. Naval Reserve, U.S. Navy, and Army National Guard, he was appointed as a second lieutenant in the U.S. Army Reserve on 18 May 1985.
2. On 2 October 1995, he was issued his notification of eligibility for retired pay at age 60.
3. On 13 November 1995, he completed a DD Form 1883 (SBP Election Certificate) electing RCSBP coverage for his niece as a natural person with insurable interest, full retired pay, option C immediate coverage.
4. He was promoted to lieutenant colonel on 21 December 2006. He was retired and placed on the Retired List effective 14 October 2012.
5. DFAS records show he sent letters requesting cancellation of his NIP coverage on 31 October 2012 and 1 November 2012.
6. On 6 February 2013, DFAS responded to his correspondence and advised him that he needed to send a letter stating he wanted to terminate the NIP coverage in order to terminate the NIP coverage. He was advised that the RC add-on cost would remain after the NIP coverage was terminated.
7. He provided retiree account statements that show he paid SBP coverage for NIP in November 2012, February 2013, March 2013, April 2013, and May 2013.
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 dependents.
9. 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, or (C) elect that a beneficiary receive an annuity immediately upon their death if before age 60. 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 the RCSBP and RCSBP coverage automatically rolls into SBP coverage.
10. 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 the Secretary concerned to discontinue participation in the SBP. 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.
DISCUSSION AND CONCLUSIONS:
1. The evidence of record shows the applicant elected RCSBP coverage for his niece, a person with insurable interest in December 1995.
2. The law provides that an RCSBP/SBP election for an insurable interest beneficiary may be terminated at any time without the concurrence of the beneficiary.
3. The applicant sent a letter to DFAS on 31 October 2012 requesting to terminate his SBP NIP coverage.
4. It appears DFAS terminated his SBP NIP coverage in May 2013.
5. Based on the foregoing, it would be equitable to correct his records to show he made a proper written request to terminate his SBP NIP coverage on 31 October 2012 and that it was received and processed by the appropriate office in a timely manner to be effective 1 November 2012. Although he will no longer be charged SBP NIP premiums, the applicant is advised that he will continue to be charged RCSBP NIP premiums. These premiums pay for the protection afforded his niece from his December 1995 election through his termination of that election, 17 years later.
BOARD VOTE:
___X_____ ___X_____ __X__ GRANT FULL RELIEF
________ ________ ________ GRANT PARTIAL RELIEF
________ ________ ________ GRANT FORMAL HEARING
________ ________ ________ DENY APPLICATION
BOARD DETERMINATION/RECOMMENDATION:
The Board determined the evidence presented Is 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:
a. showing he made a proper written request to terminate his SBP NIP coverage on 31 October 2012 and that it was received and processed by the appropriate office in a timely manner to be effective 1 November 2012 and
b. adjusting his retired pay accordingly.
___________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.
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