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Jan 28, 2016




SURVIVOR BENEFIT PLAN (SBP) Presented by Dan McCullough USAF Academy Survivor Benefit Plan Counselor 333-2129. AVERAGE LIFE EXPECTANCY. Life expectancy in the USA Average is 78.0 years Males – 75.15 years Females – 80.97 years - PowerPoint PPT Presentation

  • SURVIVOR BENEFIT PLAN (SBP) Presented by Dan McCullough USAF Academy Survivor Benefit Plan Counselor 333-2129

  • AVERAGE LIFE EXPECTANCYLife expectancy in the USAAverage is 78.0 yearsMales 75.15 yearsFemales 80.97 yearsAverage number of years female spouses outlive male military retirees30% of female spouses - 15 years20% of female spouses - 29 years10% of female spouses - 34 years** Life expectancy averages taken from U.S. Census Bureau, International Data Base as of 7/16/2007

  • PURPOSE OF SBPRetired pay stops the date of the retirees death!Even if theres a surviving spouse/childrenSBP is the only way survivors can receive a portion of deceased members retired pay SBP provides surviving spouses with a continuing, inflation-protected, lifetime income

  • AUTOMATIC COVERAGE PROVISIONAll retirees must complete a DD Form 2656 before retirement dateProvides DFAS-CL data required to properly establish your retired pay accountFederal and state income tax Arrears of retired pay beneficiary(ies) Properly establishes SBP coverage

  • AUTOMATIC COVERAGE PROVISIONSpouse concurrence required on the DD Form 2656 when married member does not elect full spouse coverageDD Form 2656 must be completed, dated, and properly witnessed by SBP counselorIf DFAS-CL does not receive the DD Form 2656 with a valid SBP election (and spouse concurrence, if required) before retirement date, the law requires maximum SBP coverage be established (even for a single person!)

  • SBP BENEFICIARY CATEGORY OPTIONSEach retiring member must elect a category of SBP beneficiary: Spouse Child(ren) Spouse and Child(ren)Former Spouse Former Spouse and Child(ren)Insurable Interest Decline

  • LEVEL OF COVERAGE AVAILABLEEach retiring member must elect a level of coverage:By selecting a base amountBase amount determines the costCost also determined by category of beneficiary electedBase amount determines the annuity payableBase amount can be any $$ figure between $300 and the members full (gross) retired pay Cost-of-living adjustments (COLAs) are applied to the base amount at the same time and rate as retired pay increases

  • SPOUSE ONLY OPTIONA spouse, married to member on date of retirement, is immediately eligibleNo length of marriage requirementA member, who is not married on the date of retirement, may cover a future spouseMember must send written request to DFAS prior to 1st anniversary of first marriage after retiring and include a copy of the marriage certificate/license

  • SPOUSE ONLY OPTIONNew spouse becomes an eligible beneficiary the earlier of:1st anniversary of marriageUpon birth of a child if before the 1st anniversary of marriageException: Immediately if retired member remarries the spouse covered at retirement and member elects to resume spouse coverage

  • SPOUSE ONLY OPTIONSBP coverage and premiums are suspended if spouse loses eligibility:DeathDivorce (may change election to Former Spouse coverage following divorce)

  • SPOUSE ONLY OPTIONRemarriage options for members with suspended spouse SBP coverageMember must send written request to DFAS prior to first anniversary of marriage to:Resume prior level of coverage for new spouse, ORIncrease prior level of coverage for new spouse, Member must repay difference with interest before 1st anniversary of marriage ORDecline coverage for new spouse

  • SPOUSE ONLY OPTIONIf a member with suspended spouse coverage does NOTHING prior to the 1st anniversary of marriage:Coverage is automatically established by operation of law for new spouse on 1st anniversary of marriageFor the same level of coverage previously in effectIf DFAS is not promptly notified of marriage, debt of premiums will accrue

  • SPOUSE ONLY OPTIONProvides spouse an annuity of 55% of the elected base amount for life Remarriage before age 55 suspends annuityAnnuity can be reinstated if remarriage endsDue to death or divorceAnnuity continues if remarriage occurs at age 55 or olderAnnuity increases with retiree COLAs Annuity is taxable

  • CHILD ONLY OPTIONChildren are eligible until age 18 (22 if unmarried full-time students)Children disabled and incapable of self-support remain eligible for life or as long as disability causes them to be incapable of self-supportBe cautious if Social Security Disability benefits are involvedHowever, childs marriage at any age terminates childs eligibility

  • CHILD ONLY OPTIONCovers all members children while they are eligibleCannot designate a particular child(ren) to receive the annuityChild cost based on ages of member and youngest childChild coverage and cost suspended when last child loses eligibility

  • CHILD ONLY OPTIONFuture child(ren) (natural, adopted, step, grand) are automatically covered if child coverage electedFuture child(ren) covered on date of acquisitionNo change in cost if member is currently paying premiums for child coverageIf premiums had been suspended because last child lost eligibility, new child costs recomputed based upon current ages of member and new youngest child Member must notify DFAS-CL in writing with a copy of the new childs birth certificate

  • CHILD ONLY OPTIONMember who has no eligible children at retirement may cover a future childMember must send written request to DFAS within one year of acquiring the first eligible child and include copy of childs birth certificateChild becomes covered on date of receipt of the election request by DFAS-CLCosts begin 1st day of the following month

  • CHILD ONLY OPTIONProvides eligible child(ren) an annuity of 55% of the elected base amount Only one annuity is payableAll eligible children receive equal shares of the annuity (when over age 18)Annuity paid to adult guardian on behalf of a minor childDont consider electing child only coverage as replacement income for spouse because it cant be changed to spouse coverage when last child loses eligibility

  • SPOUSE & CHILD OPTIONSpouse is the primary beneficiarySpouse receives annuity until death or remarriage prior to age 55Annuity reinstated if remarriage terminatesEligible children are contingent beneficiariesReceive equal shares of the annuity if spouse dies or remarries prior to age 55Provides maximum family coverage

  • FORMER SPOUSE OPTIONOnly one former spouse may be coveredExcludes current spouse (cant split the annuity)Can suspend premiums if former spouse remarries prior to age 55Must furnish copy of former spouses remarriage certificate Does not terminate former spouses eligibility Just suspends former spouses eligibility to receive the annuity while remarriedPremiums reinstated if remarriage ends

  • FORMER SPOUSE OPTIONBoth DD Form 2656 and DD Form 2656-1 must be completed prior to retiringCopy of complete divorce decree (including property settlement, if applicable) must be attached

  • FORMER SPOUSE & CHILD OPTIONFormer Spouse is the primary beneficiaryFormer Spouse receives annuity until death or remarriage prior to age 55Annuity reinstated if remarriage terminatesEligible children are contingent beneficiariesOnly children from marriage to this former spouse are eligibleExcludes children of any other marriageReceive equal shares of the annuity if former spouse dies or remarries prior to age 55

  • INSURABLE INTEREST OPTIONUnmarried members with no or only one dependent child may elect this optionIf one dependent child, cannot bypass the dependent child and elect insurable interest coverage for someone elseCan elect for one dependent child in lieu of child only coverage, allowing child to receive life-long payment regardless of age, martial or student statusCost much more expensive than child only coverage

  • INSURABLE INTEREST OPTIONCan elect coverage for a person with a financial interest in the continued life of the memberCan be a relative or non-relativeIf related closer than cousin, no proof of financial interest neededOthers must prove financial interest connectionExamples: Beneficiary of life insurance policy, business partner, joint property owner, etc.

  • INSURABLE INTEREST OPTIONLifetime coverage for beneficiaryNot terminated by marriage, student status, or ageBeneficiary receives 55 % of retired pay after SBP costs are deducted Member may terminate coverage at any timeCant name another insurable interest beneficiary Member may change to coverage for new spouse and/or childMust submit election change request to DFAS-CL within one year of acquiring new spouse and/or child


  • INSURABLE INTEREST OPTIONInsurable Interest election will be vitiated (voided) if:Member retires for disability, andMember dies within one year of retiring, andCause of death is related to the disability for which the member is retiredIf election is voided, premiums paid will be refunded to the SBP beneficiaryException: An annuity is payable if the SBP beneficiary is a dependent holding a valid military dependent ID card with the member as the sponsor on the members date of death

  • DECLINE COVERAGERetired pay STOPS when retiree diesNo payments made to anyone unless member is enrolled in SBPSBP beneficiary excluded at retirement can not arbitrarily be covered in the futureIf member has an eligible spouse at retirement and declines spouse coverage, cannot cover that spouse or a later acquired spouseIf member has an eligible child at retirement and declines child coverage, cannot cover that child or a later acquired child

  • SPOUSE PREMIUMSCost is 6.5 percent of the base amount you elect; orIf base amount is lower than $1,575, cost is 2.5 percent of the first $735, plus 10 percent of the base amount in excess of $735 If

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