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The Military Survivor Benefit Plan

This file discusses the Military Survivor Benefit Plan (SBP).

Payments will not be made to the non-member spouse of retired pay as property, maintenance or child supprot unless retired pay is being paid to the member. If the member does not live to retirement, there will never be any retired pay and if the member dies after retirement, retired pay ceases. Period!

There is no provision for a separate account for the non-member spouse. Because the retired pay is frequently the most significant asset of the marriage, it is vitally important to deal with the issue of the death of the member, and consider the means of protecting the interest of the non-member spouse.

Various methods are available to cover this contingency, including a commercial life insurance policy or an annuity, or the government sponsored plan called the Survivor Benefit Plan (SBP). Determining the best alternative is not an easy task. There are emotional concerns and the dollars and cents issue of whether or not the SBP is the most cost effective alternative. Wholly apart from the issue of divorce, informed observers disagree as to whether or not commercial products provide more economical coverage.

While an active duty judge advocate I briefed hundreds of personnel and spouses on the SBP program, ad found much confusion. With the issue of divorce added to the equation, it is vital that both the member and non-member have a working knowledge of the alternatives before a decision is made.

If it is concluded that the SBP is the best alternative, it is necessary to have a basic understanding of the features of the SBP. Former Spouse coverage under the Survivor Benefit Plan is a complex topic because the statutory provisions are intricate and sometimes illogical, and there are numerous decisions of the Comptroller General dealing with former spouse SBP. The subject is further complicated because the government has yet to publish a current regulation on the plan. This file will only provide a primer on the subject and a starting point for further and inquiry. Every rule, contingency and possibility are not covered.

The Essentials

The Survivor Benefit Plan is a plan whereby payments are made to a named beneficiary after the member's death. The plan, which is partially funded by the government, is paid for by monthly deductions from the retired pay of the member. Participation in the SBP is available to active duty, reserve and national guard personnel. The rules on the latter two are somewhat more complex and will not be addressed here.

If a member is married upon retirement, written spousal consent is required if the member is to elect less than full coverage. In other words, full coverage will be forced absent spousal consent to the contrary.

When a married active duty member accrues twenty years of service, spouse coverage is automatic . Other than this, there is no pre-retirement survivor annuity. (Spouses are covered by a Department of Veterans's Affairs benefit called Dependency and Indemnity Compensation.) So, even if a former spouse is properly awarded a portion of the retirement and former spouse SBP coverage, there is exposure until the member has twenty years of service.

The amount of the premium is dependent upon the identity of the beneficiary and the percentage of the retired pay that will be paid to the beneficiary. In the typical case of an active duty member and a spouse or former spouse beneficiary, the premium will be 6.5% of the "base amount". The dollar coverage is 55% of the same "base amount". The maximum base amount is the member's gross retired pay. In this case, the premium would be 6.5% of the member's gross retired pay.

Coverage is available for "spouse only", "spouse and child(ren)", "child(ren) only", "former spouse only", "former spouse and child(ren" and a person with an insurable interest. In cases of children coverage with a spouse or former spouse, the children are only contingent beneficiary in the event there is no eligible spouse or former spouse beneficiary.

It is important that the member know that it is not possible to split coverage between a former spouse and a subsequent spouse. There may be only one spouse or former spouse beneficiary. This is true even though the former spouse's share in the survivor annuity is less than the full amount.

One feature of the SBP is the reduction of the payments when a recipient reaches age 62. To greatly oversimplify, as explained above the amount of the annuity is 55% of the "base amount". Under the current two-tier system, the amount of the annuity will be reduced to 35% of the base amount when the annuitant reaches 62. This reduction was formerly referred to as the "Social Security Offset". This reduction may be avoided by the payment of a significant, increased premium.

The former spouse should also know that, if the former spouse remarries before the age of 55, coverage is suspended. This is based on statute and is irrespective of the fact that payments to the former spouse of a portion of the retired pay as property would continue after remarriage. If the subsequent marriage is terminated by death or divorce, coverage is resumed.The member's decision to elect in or out of the coverage is made at the time of retirement, and is generally irrevocable. This inflexibility is one of the significant disadvantages of the plan. So, for example, if the member did not elect to participate in the plan at the time of retirement, absent a so-called "Open Season", there is nothing that can be done to enroll a former spouse in the plan at the time of divorce.

The "Open Season"

From time to time Congress amends the SBP, presumably to make it more attractive and to encourage participation. When this happens, they authorize an open season to permit those who did not participate to elect in and those who did not elect maximum coverage to increase the coverage The most recent open season ran April 1, 1992 - March 31, 1993.

One reason for the open season was to make available participation in the new "Supplemental SBP" option. As mentioned above, payments at age 62 will be reduced from 55% of the base amount to 35%.

The Supplemental Plan provides for coverage after age 62 of 40% - 55% of the base amount. Since it is not government subsidized as is the basic plan, it is quite expensive. The premium for this supplemental amount depends on the amount of supplemental coverage and the age of the retiree at the time of the election. For example, if the retiree is 55 years old at the time of the election of the Supplemental coverage, the total premium to provide full 55% coverage before and after age 62 is 15.18% of the base amount. Note that this means that the premium for increasing the post-62 coverage from 35% to 55% is 8.68% (15.18% less the normal 6.5%).

Assume that the member wanted to provide an annuity of 55% of gross retired pay, and the gross retired pay is $2000 per month. The basic 55%/35% monthly premium is $130 (2000 X .065). The total premium for 55%/55% coverage would be $303.60 (2000 X .1518).

Another reason for the open season was to allow retirees who declined to participate at retirement to enroll, and to allow those who elected less than the maximum to increase coverage.

These retirees had to pay an additional premium for late enrollment that depended on the number of years that had passed since the member retired.

Former spouses should not rely solely on the possibility that there will be another open season in order to protect the former spouse's interest if the member did not elect coverage upon retirement.

Former Spouse Coverage

A spouse loses eligibility as an SBP beneficiary upon divorce by operation of law, regardless of any language in the order to the contrary. Those orders that do mention SBP frequently normally do so in language that says: "{Retiree} elected to cover {spouse} in the SBP, and such coverage shall continue after the divorce. {Retiree} shall do nothing to cancel the coverage or otherwise remove {spouse} as a named beneficiary." It is obvious that, since coverage is terminated by operation of law at the time of the divorce, this language is totally ineffective to cover the former spouse.

The Department of Defense Authorization Act of 1984 (1) amended the SBP provisions to authorize coverage for certain former spouses and to add protection for the former spouse in cases where a court ordered that coverage be established. There is no provision in the SBP which makes former spouse coverage an automatic benefit.

The only means by which the divorced spouse may receive a survivorship annuity is if "former spouse coverage" is elected. In the 1985 DoD Authorization Act, language was added to permit a court to order that the member provide former spouse coverage. (3)

A court order cannot, by itself, be used to institute coverage. A signed election request must be submitted by the service member, or, in some cases, the former spouse, before coverage can be established.

Former spouse coverage may be based either upon a voluntary action by the member or by reason of a court order. When coverage is incident to a divorce decree, and the member then fails or refuses to make the required election, that member shall be deemed to have made such an election if the service finance center receives a written request from the former spouse asking that the election be made. (4)

Time Standards

When the coverage is incident to a court order, the member must make his request "within one year after the date of the decree of divorce, dissolution or annulment." (5) If the coverage is being requested by the former spouse, it must be made "within one year of the date of the court order or filing thereof." (6) A recent decision of the Comptroller General (7) has clarified to some degree these two tests. In essence, if the original decree stated that the former spouse was to be the beneficiary, and neither the member nor the former spouse took the necessary steps to reinstate the coverage for the former spouse within the one year window, then a subsequent court order cannot start the one year over again

Therefore if these deadlines are not met, it will be impossible to ever provide coverage for the former spouse. There are many couples (and attorneys) who erroneously believe the former spouse is covered because the member never terminated the coverage and premiums are still being deducted (because the service is unaware that the couple are divorced). In such cases, when the finance center learns of the divorce, if former spouse coverage has not been effected, the deduction of premiums is terminated and a refund is made to the member of premiums withheld after the date of the divorce. I am continually involved in malpractice cases in which the former spouse is suing her attorney for not ensuring that the proper steps were taken to institute coverage.

For the member to change coverage from "spouse" to "former spouse" it is necessary to send the servicing finance center the prescribed form which may be obtained from the center.

If the former spouse does not want to rely on the member to take this action, (and I recommend that she not) then she may submit a request that an election be "deemed" to have been made by the member. There is no official format for such a request.
It is important to know that sending the order to the pay center to apply for direct payment under the Former Spouses' Act is not effective service for implementation of former spouse SBP.


In military divorces, the fact that payments to the former spouse will terminate upon the death of the member must be addressed. If the government-sponsored plan is chosen to deal with this issue, there are many pitfalls for the practitioner. This article has discussed the general principles surrounding the SBP and some of the rules for insuring that proper steps are taken to carry out the intention of the parties or the order of the court.


1. Public Law 98-94, September 24, 1983
2. Public Law 99-661, November 16, 1986
3. 10 U.S.C. 1450(f)(3)
4. 10 U.S.C. 1448(b)(3)(A)
5. 10 U.S.C. 1450(f)(3)(B)
6. Comp. Gen. B-244101, August 3, 1992

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