IN THE CASE OF:  	  

		BOARD DATE:  19 February 2015	  

		DOCKET NUMBER:  AR20140007817 


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, in effect, reversal of the Defense Finance and Accounting Service (DFAS) decision denying him discontinuation of enrollment in the Survivor Benefit Plan (SBP) and cancellation of his SBP debt that resulted from non-payment of SBP premiums since his retirement in 2010. 

2.  The applicant states, in effect, that he has not received a single penny of Military Disability Retired Pay from the Army since he was retired from the Army due to disability.  Since he elected to receive his disability compensation from the Department of Veterans Affairs (VA) and is now covered by the VA insurance plan, he does not understand why he cannot terminate SBP coverage and have his debt cancelled for SBP unpaid premiums.

3.  The applicant states that he and his wife wholeheartedly agreed to all of the terms of the SBP.  The SBP counselor explained every aspect of the plan.  He was advised that the SBP premiums would be deducted from his Military Disability Retired Pay every month.  Nevertheless, upon completion of his transition leave he realized that 3 months of SBP premiums had not been paid.  He presumed there was a delay in processing and that everything would be settled in a matter of time.

4.  After a year, his SBP premium debt surpassed $2,000.  So, he sought the advice of a VA benefits counselor who told him the VA could not address the matter because it was a military issue.  He asked the counselor if his SBP premiums could be deducted from his VA pension, but he was told they could not because his claims were still pending.
5.  The applicant states that he is totally confused and the resources for retired veterans are limited due to the remoteness of his location on the island of American Samoa.  He finally made contact with a retired military personnel veteran who gave him some advice.  He wrote several letters to DFAS requesting a waiver of the debt and disenrollment from the SBP, but he was unsuccessful.  On 6 January 2014, DFAS finally informed him that since he had retired 39 months prior, his window for withdrawal had already closed.

6.  The applicant provides:

* self-authored statement
* 20-Year Letter
* Temporary Disability Retirement List (TDRL) orders
* 2 DD Forms 2656 (Data for Payment of Retired Personnel)
* DD Form 214 (Certificate of Release or Discharge from Active Duty)
* DD Form 383A (Certificate of Retirement)
* Permanent Disability Retirement List (PDRL) orders
* Letter to DFAS
* Letter from DFAS
* DFAS-CL 7220/148 (Retiree Account Statement (RAS))
* DFAS-CL 1741/142 (DFAS SBP/Retired Serviceman's Family Protection Plan (RSFPP) Premium Bill)

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.  The applicant enlisted in the U.S. Army Reserve on 18 September 1989.  He served through a series of reenlistments and extensions and he attained the rank/grade of sergeant first class (SFC)/E-7.  


3.  On 22 October 2009, the Deputy Director, Personnel Actions and Service, U.S. Army Human Resources Command, notified the applicant that he had completed the required years of qualifying service and was eligible for retired pay on application at age 60.  He further advised the applicant about his entitlement to participate in the Reserve Component SBP (RCSBP) and listed the options available to the applicant regarding SBP enrollment and declination.

4.  On 23 July 2010, he was considered by a physical evaluation board (PEB).  The PEB rated his disabilities at 70 percent and recommended his placement on the TDRL.  He concurred with the PEB's findings and recommendation. 

5.  On 12 August 2010, the applicant completed a DD Form 2656 wherein he elected SBP coverage for spouse and children based on his full gross pay. 

6.  He retired on 24 September 2010 and he was placed on the TDRL in his retired rank/grade of SFC/E-7 on 25 September 2010.  The DD Form 214 issued to the applicant at the time shows his address after separation would be his home of record on the island of Pago Pago, American Samoa.

7.  He was considered by a TDRL PEB in October 2012.  The TDRL PEB recommended his permanent retirement with an 80 percent disability rating.  Accordingly, he was removed from the TDRL on 22 October 2012 and placed on the PDRL the next day.  

8.  The VA subsequently awarded him a 100 percent disability rating for his mental/physical condition. 

9.  The applicant provides a letter addressed to DFAS, dated 17 April 2013, wherein he requested a waiver to discontinue enrollment in the SBP and cancellation of the outstanding debt in the amount of $2,162.55 he incurred as a result of unpaid SBP premiums.  This letter was rendered 2 years, 6 months, and 25 days (30 months and 25 days) after the applicant's retirement date.  The DFAS response to this request is not available for review.

10.  On 21 October 2013, he submitted a DD Form 2656-2 (SBP Termination Request) wherein he requested to discontinue participation in the SBP and his spouse concurred with his request.  This document was rendered and notarized 3 years and 24 days (less than 36 months and 24 days) after the applicant's retirement date.

11.  The applicant's RAS for the period ending 3 December 2013 shows he was enrolled in the SBP with coverage for spouse and child(ren) and a monthly premium of $201.76.
12.  On 6 January 2014, by letter, DFAS notified him that as stated on his DD Form 2656, he only had a 1-year window to withdraw from the SBP, starting with the 25th month through the 36th month after his first eligibility to receive retired pay.  Since he had been retired for 39 months, he was no longer eligible to withdraw.

13.  The applicant provides the SBP/RSFPP Premium Bill that he received from DFAS for the month of April 2014.  This document shows that as of 28 April 2014, he had incurred a debt for unpaid SBP premiums in the amount of $4,782.07 and the interest charge on the remaining balance due was at an annual percentage rate of six percent.

14.  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. An election, once made, was irrevocable except in certain circumstances.  This law also provides that every member having a spouse and/or child(ren), who retired/transfers to the retired list on or after that date, is automatically covered under the SBP at the maximum rate unless he/she elected otherwise before retirement or transfer to the retired list.

15.  According to the official DFAS website (dfas.mil), there are other methods of paying for SBP coverage and the member elects the method that is most convenient for them: deductions from retired pay, deductions from VA pay, direct remittance, or paid up status (retirees who reached 70 years of age and have paid 360 monthly payments).

	a.  The normal method of paying for SBP coverage is by an automatic deduction from a retiree’s retirement pay.  However, if a member has been ruled severely disabled by the VA and his/her VA compensation exceeds his/her retired pay, the member does not receive retired pay from DFAS.  As a result, DFAS cannot automatically deduct SBP premiums from the member's monthly pay.  In this case, the best way to pay for SBP coverage is to have payments deducted from the member's VA compensation and forwarded to DFAS Retired and Annuitant Pay by the VA.

	b.  Direct remittance is only for those retired members who do not receive retired pay from DFAS or who do not receive enough retired pay to pay for SBP premiums.  Direct remittance members who choose not to have their SBP payments deducted from their VA pay must remit SBP premium payments directly to DFAS.  Any delinquent amounts carried over into a new billing month will accrue an interest fee calculated at 6 percent Annual Percentage Yield.

16.  Department of Defense (DOD) Financial Management Regulation, Volume 7b, Chapter 45, paragraph 4507 covers delinquent SBP premiums.  It states interest at the rate of 6 percent compounded annually is levied against delinquent SBP premiums.  Upon the death of a retiree, any delinquency, plus interest, is collected from the annuitant’s benefits before payment of any annuity.

17.  Public Law 96-402, enacted 9 October 1980 but effective 1 December 1980, established a withdrawal clause for members rated totally disabled by the VA.

18.  Title 10, U.S. Code, section 1452(g), Discontinuation of Participation by Participants Whose Surviving Spouses Will Be Entitled to Dependency and Indemnity Compensation, paragraph 1 (Discontinuation) states:  

	a.  Sub-paragraph (A) (Conditions): Notwithstanding any other provision of this subchapter but subject to paragraphs (2) and (3), a person who has elected to participate in the Plan and who is suffering from a service-connected disability rated by the Secretary of Veterans Affairs as totally disabling and has suffered from such disability while so rated for a continuous period of 10 or more years (or, if so rated for a lesser period, has suffered from such disability while so rated for a continuous period of not less than 5 years from the date of such person’s last discharge or release from active duty) may discontinue participation in the Plan by submitting to the Secretary concerned a request to discontinue participation in the Plan.  

	b.  Sub-paragraph (B) (Effective date): Participation in the Plan of a person who submits a request under subparagraph (A) shall be discontinued effective on the first day of the first month following the month in which the request under subparagraph (A) is received by the Secretary concerned.  Effective on such date, the Secretary concerned shall discontinue the reduction being made in such person’s retired pay on account of participation in the Plan or, in the case of a person who has been required to make deposits in the Treasury on account of participation in the Plan, such person may discontinue making such deposits effective on such date.  

	c.  Sub-paragraph (C) (Form for request for discontinuation): Any request under this paragraph to discontinue participation in the Plan shall be in such form and shall contain such information as the Secretary concerned may require by regulation.





DISCUSSION AND CONCLUSIONS:

1.  Upon retirement on 24 September 2010, the applicant returned to his home of record on the island of Pago Pago, American Samoa.  In conjunction with the applicant's retirement, he elected spouse and child(ren) SBP coverage based upon his full gross pay.  

2.  He also opted to suspend his retired pay in order to receive VA compensation as the monthly pay, since it was greater than his retired pay.  Because he elected enrollment in the SBP, a direct remittance account was established so he could easily mail his SBP premiums.  He did not pay SBP premiums and despite his non-payment, his spouse still had the benefit of SBP coverage.  

3.  On 17 April 2013, during the 31st month following his retirement, he sent a letter to DFAS requesting to terminate his SBP election and to be granted either a full or partial waiver for payment of his unpaid SBP premiums.  The DFAS response to his request is not available for review; however, it is not unreasonable to presume that DFAS advised the applicant to submit a DD Form 2656-2 in order to complete this action.

4.  On 21 October 2013, during the 37th month following his retirement, he submitted a notarized DD Form 2656-2 wherein he requested to discontinue participation in the SBP and his spouse concurred with his request.

5.  In view of the fact that the applicant resides in a remote area with limited veterans resources and the fact that he initiated his request in the 31st month following his retirement, it would be in the interest of justice and equity to correct his record to show he requested termination of his participation in the SBP within the specified window of 25 to 36 months following the date of his retirement and that the request was granted.  Therefore, it would be appropriate to correct the record to show his participation in the SBP was terminated effective 23 September 2013.

6.  However, since he received SBP coverage for his spouse, but never paid for it; his debt is valid.  He should not be allowed to gain from a military benefit without paying for it.  Forgiving his debt is unjust to the thousands of veterans who receive the same SBP coverage at the same cost but faithfully pay their premiums on time.  The interest on delinquent amounts is set by law and DOD at 6 percent.  A change to the law is not within the purview of this Board.  

7.  Although there is a provision for termination of SBP participation for VA rated 100 percent disabled retirees, it is not applicable until the fifth year of being rated as such, so the applicant is not eligible for termination under that provision.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

____X___  ____X___  ____X___ GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

1.  The Board determined that the evidence presented was sufficient to warrant a recommendation for partial relief.  As a result, the Board recommends that all Department of the Army records of the individual concerned be corrected to by: 

	a.  showing his DD Form 2656-2 was received and processed on 23 September 2013;

	b.  terminating his participation in the SBP effective 23 September 2013; and

	c.  cancelling the portion his debt for unpaid SBP premiums incurred on or after 24 September 2013.

2.  The Board further determined that the evidence presented is insufficient to warrant a portion of the requested relief.  As a result, the Board recommends denial of so much of the application that pertains to cancelling the portion of his debt incurred for unpaid SBP premiums for the period of 24 September 2010 through 23 September 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)                                         AR20140007817



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ABCMR Record of Proceedings (cont)                                         AR20140007817



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