RECORD OF PROCEEDINGS


      IN THE CASE OF:


      BOARD DATE:        2 February 2006
      DOCKET NUMBER:  AR20050004916


      I certify that hereinafter is recorded the true and complete record
of the proceedings of the Army Board for Correction of Military Records in
the case of the above-named individual.

|     |Mr. Carl W. S. Chun               |     |Director             |
|     |Mrs. Nancy L. Amos                |     |Analyst              |


      The following members, a quorum, were present:

|     |Ms. Yolanda Maldonado             |     |Chairperson          |
|     |Mr. Michael J. Flynn              |     |Member               |
|     |Mr.  Dennis J. Phillips           |     |Member               |

      The Board considered the following evidence:

      Exhibit A - Application for correction of military records.

      Exhibit B - Military Personnel Records (including advisory opinion,
if any).

THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests that she be allowed to keep the full Survivor
Benefit Plan (SBP) benefits at the 55 percent rate.

2.  The applicant states she and her deceased husband, a former service
member (FSM), were not properly briefed about the SBP.  They were not
briefed that she would not be able to receive both the SBP and Dependency
and Indemnity Compensation (DIC) at the same time.  Also, when they first
started the SBP payments, they were told she would receive 55 percent of
the FSM's retired pay for the rest of her life.  Some years after they
signed up for the SBP, they were told the annuity would be reduced when she
reached age 62.  They made their financial plans based on her receiving 55
percent of his retired pay for the rest of her life, and on her receiving
both the full SBP annuity and the full DIC for the rest of her life.

3.  The applicant provides the FSM's death certificate; their marriage
certificate; his DD Form 214 (Armed Forces of the United States Report of
Transfer or Discharge); and a DD Form 2656-7 (Verification for Survivor
Annuity).

CONSIDERATION OF EVIDENCE:

1.  The FSM and the applicant (born on 29 January 1936) married on 2
January 1953.  The FSM was inducted into the Army on 12 August 1953.

2.  On 24 June 1973, the FSM completed a DD Form 1883 (Survivor Benefit
Plan – Election Certificate) and elected not to participate in the SBP.  He
retired on 1 September 1973 for length of service.

3.  Records at the Defense Finance and Accounting Service show the FSM
enrolled in the SBP for spouse only coverage during the 1982 Open Season.

4.  The FSM died on 3 March 2005.

5.  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.

6.  Public Law 97-35, enacted 12 August 1981, established the second Open
Season from 1 October 1981 through 30 September 1982.

7.  Public Law 101-189, enacted 29 November 1989, established the
Supplemental SBP (SSBP) (effective 1 October 1991) with a one-year open
enrollment period to begin 1 October 1991.  The SSBP annuity (5, 10, 15 or
    20 percent of full retired pay) would be paid in addition to the
standard               35 percent-tier payment for surviving spouses age 62
and older.  Public Law  101-510, enacted 5 November 1990, delayed the
implementation of the open enrollment season and SSBP until 1 April 1992.

8.  Public Law 105-261, enacted 17 October 1998, established an Open Season
to be conducted 1 March 1999 through 29 February 2000.  Retirees could add
or increase SSBP.  The retiree must have paid monthly premiums starting on
the date of enrollment and a one-time, lump sum enrollment premium.
Extensive publicity was given in Army Echoes.  Issue 1, Volume XLIII of
Army Echoes (issued around January 1999) defined a few basic SBP terms, and
explained that SSBP allowed a member to increase a surviving spouse's after-
62 annuity from 35 percent to 40, 45, 50, or 55 percent of retired pay.

9.  The SBP Counselor Training Manual briefs that “The Subcommittee
believes that the government meets its obligation to survivors in part
through the provision of Social Security, to which it contributes as an
employer; and Social Security, therefore, is the foundation on which the
subcommittee recommends building a new program” (House Armed Services
Committee, Public Law 91-66, 1 October 1970, “Report of Special
Subcommittee on Survivor Benefits”).  The Manual states that the SBP
provides a survivor 55 percent of a participant’s military retired pay.
The after-62 benefit amount drops to 35 percent of the retired pay because
Social Security is meant to provide the additional coverage to bring the
survivor support level back up to the 55 percent level.  SSBP provides a
means to increase the after-62 benefit to 40, 45, 50, or 55 percent of the
retired pay.  It is not a government subsidy.

10.  The Fiscal Year 2005 National Defense Authorization Act enacted a
phased elimination of the two-tiered annuity computation for surviving
spouses under the SBP.  By 2008, the reduction in SBP payments to offset
Social Security payments commencing at age 62 will be eliminated.

11.  The Department of Veterans Affairs (DVA) booklet, Federal Benefits for
Veterans and Dependents, 2005 edition, states DIC payments may be available
for surviving spouses of deceased service members or veterans, who have not
remarried.  To be eligible, the deceased must have died from (1) a disease
or injury incurred or aggravated while on active duty or active duty for
training; (2) an injury incurred or aggravated in line of duty while on
inactive duty training; or (3) a disability compensable by the DVA.

12.  Title 10, U. S. Code, section 1450(c) requires an SBP offset for the
amount of DIC paid.  Section 1450(c)(1) states that if, upon the death of a
member participating in the SBP, the surviving spouse or former spouse is
also entitled to DIC, the surviving spouse or former spouse may be paid an
SBP annuity but only in the amount that the annuity otherwise payable would
exceed that compensation.

13.  Title 10, U. S. Code, section 1450(e)(1) provides that, if an SBP
annuity is not payable because the DIC payment is greater, then any amount
deducted from the retired pay of the deceased member shall be refunded to
the surviving spouse or former spouse.

14.  Title 10, U. S. Code, section 1450(k)(1) states that, if a surviving
spouse or former spouse (i.e., survivor) whose annuity has been adjusted
under subsection (c) subsequently loses entitlement to DIC because of
remarriage of that survivor, and if at the time of such remarriage the
surviving spouse or former spouse is 55 years of age or more, the amount of
the annuity of that survivor shall be readjusted, effective on the
effective date of such loss of DIC, to the amount of the annuity which
would be in effect with respect to that survivor if the adjustment under
subsection (c) had never been made.  Subsection 1450(k)(2) states a
surviving spouse or former spouse whose annuity is readjusted shall repay
any amount refunded by reason of the adjustment.

DISCUSSION AND CONCLUSIONS:

1.  Federal law requires an SBP offset for the amount of DIC paid.  The
Board cannot make any records correction that would enable the Department
of Veterans Affairs to circumvent this provision of law.

2.  The applicant provides no evidence to show her and the FSM were
improperly briefed when he enrolled in the SBP during the 1981 through 1982
Open Season concerning the percentage (55 percent versus 35 percent) of his
retired pay that she would receive as an SBP annuity.

3.  In addition, the applicant turned age 62 in January 1998.  If she and
the FSM did not realize prior to that time she would receive only 35
percent of his retired pay, they should have realized it when he received
his retiree account statements after January 1998.  The FSM would then have
had an opportunity to enroll in the SSBP during the 1 March 1999 through 29
February 2000 Open Season, which had been extensively publicized in Army
Echoes, a publication the FSM should have been receiving.

4.  If the applicant should lose her eligibility for DIC, she would regain
her eligibility for the SBP and, as of 2008, she would receive the full 55
percent of the FSM's retired pay.  In this case, she would be required to
repay any SBP refund she had received.

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF

________  ________  ________  GRANT PARTIAL RELIEF

________  ________  ________  GRANT FORMAL HEARING

__ym____  _mjf____  _djp____  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.




                                  __Yolanda Maldonado___
                                            CHAIRPERSON



                                    INDEX

|CASE ID                 |AR20050004916                           |
|SUFFIX                  |                                        |
|RECON                   |                                        |
|DATE BOARDED            |20060202                                |
|TYPE OF DISCHARGE       |                                        |
|DATE OF DISCHARGE       |                                        |
|DISCHARGE AUTHORITY     |                                        |
|DISCHARGE REASON        |                                        |
|BOARD DECISION          |DENY                                    |
|REVIEW AUTHORITY        |Mr. Chun                                |
|ISSUES         1.       |137.00                                  |
|2.                      |                                        |
|3.                      |                                        |
|4.                      |                                        |
|5.                      |                                        |
|6.                      |                                        |


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