IN THE CASE OF:	

		BOARD DATE:	    21 August 2014

		DOCKET NUMBER:  AR20140013176 


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 records to show he elected enrollment in the Reserve Component Survivor Benefit Plan (RCSBP) under Option A (Defer Coverage) instead of Option C (Immediate Coverage). 

2.  The applicant states when he received his 20-year letter in 1999, he was not counseled on how to fill out the DD Form 1883 (SBP Election Certificate).  He is single and if he had known it would be 40 percent of his base pay, he would have elected Option A. 

3.  The applicant provides:

* Statement from a retirement noncommissioned officer (NCO)
* DD Form 1883 

CONSIDERATION OF EVIDENCE:

1.  The applicant was born on XX February 1955. 

2.  Having had prior service in the U.S. Marine Corps, the applicant enlisted in the Kentucky Army National Guard (KYARNG) on 21 May 1993.  He served through multiple extensions or reenlistments and he attained the rank/grade of specialist (SPC)/E-4. 

3.  On 21 June 1999, the KYARNG issued the applicant a Notification of Eligibility for Retired Pay at Age 60 (20-Year Letter).  This letter notified him that he had completed the required years of service and would be eligible for retired pay, upon application, at age 60.  This letter further informed him:

By law, you have only 90 calendar days from the date you receive this letter to submit your Survivor Benefit Plan Election Certificate (DD Form 1883).  If you do not submit your election within 90 calendar days, you will not be allowed to obtain survivor benefit coverage until you apply for retired pay at age 60.  If you do not elect coverage, should you die before age 60, there will be no benefits for your survivors.  More detailed information concerning participation in the RCSBP and a blank DD Form 1883 were enclosed. 

4.  On 10 September 1999, he completed a DD Form 1883 wherein he indicated he was not married and had no dependent children.  He elected "natural person with insurable interest" RCSBP coverage, based on the full amount, Option C (Immediate Coverage).  He listed his brother as his beneficiary.  The DD Form 1883 states:

* Important:  The decision you make with respect to participation in this SBP is a permanent irrevocable decision.  Please consider your decision and its effect very carefully
* If the retiree does not elect Option B or C at this time, and should die before age 60, the survivors will not receive benefits under Public Law   95-397
* the back page of this form explained the monthly cost for each category  

5.  He was transferred to the Retired Reserve on 20 May 2003.  

6.  He will turn 60 years of age in February 2015.  

7.  He provides a statement from a retirement NCO.  She states the applicant came to see her regarding his application for retired pay.  He then learned that his insurable interest election would be 40 percent of his base pay.  He is single and never married.  He was not counseled on how these benefits worked, especially in 1999.  If he had known, he would have elected Option A. 

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. An election, once made, was irrevocable except in certain circumstances.  Since its creation, it has been subjected to a number of substantial legislative changes.

9.  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

10.  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.

11.  A member must elect maximum (full) coverage when electing insurable interest coverage (the base amount has to be the member's gross retired pay).  SBP costs for insurable interest coverage are considerably higher than the other SBP beneficiary categories.  Costs are 10 percent of the member's gross retired pay plus an additional five percent for each full five years the beneficiary is younger than the retiree; however, total costs cannot exceed 40 percent of the retired pay.

12.  Since 5 October 1994, insurable interest coverage for a beneficiary who is not a former spouse may be arbitrarily discontinued and voluntarily terminated at any time by making a signed written 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.  A member cannot name another insurable interest beneficiary. 

13.  Effective 17 October 2006, a member may name another insurable interest beneficiary within 180 days following the death of the previous beneficiary by submitting a written request to DFAS.  Such an election would become effective the first day of the month following the date DFAS receives the request.  The insurable interest coverage will be vitiated (voided) if the member dies before the end of the two-year period beginning on the effective date of the election.  All premiums paid on the new insurable interest beneficiary's behalf will be refunded in a lump-sum payment to the person who would have been the beneficiary had the member lived the required two years. 

14.  Army Regulation 15-185 (ABCMR), the regulation under which this Board operates, states in paragraph 2-5 that the ABCMR will not consider an application until the applicant has exhausted all administrative remedies to correct the alleged error or injustice.

DISCUSSION AND CONCLUSIONS:

1.  When the applicant received his 20-year letter, he submitted a DD Form 1883 wherein he elected enrollment in the RSCBP insurable interest coverage under Option C.  This means in the event he died before reaching age 60, his beneficiary would have been entitled to an annuity.  The options were clear.  The decision to participate in or disenroll from the RCSBP/SBP is a personal decision.  He made a choice.  Had he died before age 60, his beneficiary would have been entitled to the annuity.  Further, the costs for insurable interest coverage were outlined on the reverse of the DD Form 1883.

2.  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.  

3.  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 he made the election in 1999 and the date he will turn 60.  Again, had he died during this period, his beneficiary would have been entitled to the annuity.  

4.  His 20-year letter explained the options he had.  The DD Form 1883 clearly informed him he was making an irrevocable and permanent election and advised him of the cost of that election.  He chose to participate in the RCSBP for insurable interest under Option C.  He should not be allowed to now change his mind, some 15 years after he made this election, and essentially receive free coverage that he enjoyed and that all Soldiers with a similar election have to pay for.  It is not equitable to others.  He should not be entitled to a change of his election from Option C to Option A. 



5.  However, the option to terminate his insurable interest coverage remains available to him.  Since he is not age 60 yet and has not been placed on the Retired List, he has not yet exhausted his administrative remedies in requesting termination of the coverage.  Requests to terminate insurable interest may be addressed by the member directly to DFAS at any time without a Board decision.  
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)                                         AR20140013176



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ABCMR Record of Proceedings (cont)                                         AR20140013176



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