DEPARTMENT OF THE NAVY
BOARD FOR CORRECTION OF NAVAL RECORDS

701 S, COURTHOUSE RD SUITE 100%
ARLINGTON VA 22204-2490

BAN
Docket No.NRO6955-13
28 January 2014

From: Chairman, Board for Correction of Naval Records

 

To: Secretary of the Navy

Subj:

Ref: (a) Title 10 U.S.c. 1552
Encl: (1) DD Form 149 w/attachments

(2) Survivor Benefit Plan Program Manager Navy Casualty
Assistance (PERS-13) Advisory Opinion memo of 12 Nov
2013

(3) State of California, County of San Diego, Marriage
Certificate of 29 Jul 1972 ;

(4) Superior Court of California, County of San Diego
Divorce Decree of 27 Feb 1998

(5) Defense Finance and Accounting Service, Retired and
Annuity Pay ltr of 19 May 2008

(6) Defense Finance and Accounting Service, Retired and
Annuitant Newsletter of Feb 2011

(7} Defense Finance and Accounting Service, Retired and
Annuity Pay ltr of 12 Nov 2013

(8) State of California, County of San Diego, Certificate

of Death in care of xD dtc am

(9) EE sponse to the Advisory
Opinion dtd Jaz

1. The Petitioner in this case is yy, former
spouse of SR (subject) , United States Navy,

{Ret) (Deceased) .

2. Pursuant to the provisions of reference (a) Petitioner filed
enclosure {1) with this Board requesting, in effect, that the
applicable naval record be corrected to show Subject submitted a
timely written request for conversion from spouse to former
spouse coverage under the Survivor Benefit Plan (SBP) electing

SE ti one year of their divorce.

3. The Board, consisting of Messrs. Zsalman, Ruskin and George,
Docket No.NROQ6955-13

reviewed Petitioner’s allegations of error and injustice on 27
January 2014 and, pursuant to its regulations, determined that
the corrective action indicated below should be taken on the
available evidence of record. Documentary material considered
by the Board consisted of the enclosures, naval records, and
applicable statutes, regulations and policies.

4. The Board, having reviewed all the facts of record
pertaining to Petitioner’s allegations of error and injustice,
finds as follows:

a. Before applying to this Board, Petitioner exhausted all
administrative remedies available under existing law and
regulations within the Department of the Navy.

  
 

  

 

eee scene: manent

b. In May 2013, Petitioner a _— my applied
deceased former spouse's

to BCNR re ing to correct her " |g
record to show that he elected former spouse

coverage within one year of his divorce, pursuant to a divorce
decree, enclosure (1).

ec. Subject married Petitioner on 29 July 1972, enclosure

(3).

d. On 1 September 1975, Subject transferred to the Retired
List. He was married at that time and elected maximum SBP
spouse category of coverage.*

e. On 27 February 1998, Subject and Petitioner were
divorced. Under the terms of their divorce decree, there
contained a former spouse provision regarding maintaining SBP
coverage at the full base amount for Petitioner, enclosure (4).
The divorce decree also noted that premiums would be paid for by
Subject but would be reported as income to Petitioner. In
essence, Petitioner was taxed on all SBP premium payments but is
unable to reap the benefit of said payments.

f. On 19 May 2008, Subject was notified by the Defense
Finance Accounting Service (DFAS) that effective 1 October 2008,
his SBP premiums would be automatically stopped since he met the
“paid-up” requirements.’ In addition, his SBP spouse annuity

1 Enclosure (2}, erroneously states Subject elected minimum SBP spouse
category of coverage.

? Under this law, premiums for the SBP and Retired Serviceman’s Family
Protection Plan (RSFPP) will be terminated effective 1 October 2008, for all
members who are at least 70 years old and have paid SBP or RSFPP premiums for

2
Docket No.NRO6955-13

coverage would remain in effect at no further cost, enclosure

(5).

g. Although Subject should have elected former spouse SBP
coverage pursuant to the divorce decree, within one year, he
failed to do so. Additionally, Petitioner also failed to deem
her election. to DFAS requesting former spouse SBP coverage
within one year of their divorce, as required by law.

h. Subject never remarried, but continued to pay SBP
premiums in the spouse category of coverage. However, in April
2011, Subject, in an effort to keep his records current at DFAS,
submitted a copy of his divorce decree from 1998, enclosure (6).
At that time, DFAS, responded to Subject on 12 November 2013,
enclosure (7), stating that he was entitled to a refund of SBP.
premiums from the date of his divorce to present. However, due
to the Barring Act, DFAS would only refund him six-years worth
of SBP premiums that he had already paid in the amount of
approximately $18,945.55.

i. On 25 February 2013, Subject died.

j. Enclosure (2), recommended that no relief be granted,
stating “SBP participants with spouse coverage who become
divorced and desire to maintain their former spouses as their
beneficiaries must specifically elect such coverage within one
year after the date of the divorce”, which was never done by
either Subject or Petitioner. Furthermore, the advisory opinion
states that Subject accepted the refund a SBP premiums, knowing
that his SBP coverage for spousal coverage would be terminated.

k. Petitioner received a copy of the unfavorable adviso
opinion and responded, that “in good faith, neither ee
nor I were aware that a change of spouse form DD 2656-1 was to
be filed”. She also stated that in July 2009, Subject told her
that he was “paid-up” with SBP premiums and told her the amount
of SBP that she would be receiving. Finally, she also claims
that in 2011, Subject showed a marked change in his personality
and thought process, indicating that he was getting senile when
he accepted the SBP refund from DFAS, and that he was not fully
aware of the implications, enclosure (9). Petitioner is aware
that she would be subject to payment of premiums that were
refunded to the Subject.

360 or more months (30 years). This is commonly referred to as “paid-up”
SEP.
Docket No.NRO06955-13
CONCLUSION:

Upon review and consideration of all the evidence in the record,
the Board concludes that Petitioner's request warrants favorable
action. The Board found that the following factors militated in
favor of relief: That their divorce decree stated that Subject
would be required to provide SBP pension for his former spouse,
in accordance with the court order. Although the Board
recognized that Petitioner, at that time, did not submit a
deemed election within one year from the date of divorce as
required by law, the Board believed Petitioner had a reasonable
expectation that Subject requested his former spouse election
for SBP coverage since Petitioner included the premium payments
as taxable income. The Board also understood and carefully
considered the comments made in enclosure (2). However,
balancing the factors that militate in favor of relief against
those that militate against, the Board finds that, as an
exception to policy, Petitioner’s request should be granted
favorable action.

RECOMMENDATION ;

That Subject’s naval record be corrected, where appropriate, to
show that:

a. Subject executed a written request for conversion from
“spouse” to “former spouse” SBP coverage, at the same level of
coverage as previously elected, naming QE a:
the sole beneficiary. The request was received by cognizant
authority and became effective 28 February 1998, the day
following the date of divorce.

b. The request was in compliance with a court order.

c. Subject died on Sap

d. All SBP costs that would have been deducted from Subject’s
retired pay will be deducted from Petitioner's benefits. No
annuity will be paid to Petitioner until all unpaid costs have been
reimbursed. No waiver of unpaid costs will be granted.

e. That a copy of the Report of Proceedings, be filed in
the Petitioner's naval record.

4, Pursuant to Section 6(c) of the revised Procedures of the
Board for Correction of Naval Records (32 Code of Federal
Regulations, Section 723.6({c)) it is certified that quorum was
Docket No.NR0O6955-13

present at the Board’s review and deliberations, and that the
foregoing is a true and complete record of the Board's
proceedings in the above entitled matter.

ROBERT D. ZSALMAN Pusu J MONTGQME

Recorder Acting Recorder

5. The foregoing action of the Board is submitted for your
review and action.

Ie D, SO

ROBERT. D. 42SALMAN
Acting Executive Director

Reviewed and approved: ek 4 ist

ROBERT L. WOODS

Assistant General Counsel -
(Manpower and Reserve Affairs)
1000 Navy Pentagon, Rim 4D548
Washington, DC 20350-1000