Military Divorce Minefields – Part 2 – Division of Retired Pay

Let’s continue where I left off last week.

Ooh, here is the nasty one.  This is the topic that causes the most spiteful disagreement.  In no other area have I witnessed the level of argument and emotion as I have with the division of retired pay.

 

Adding to the confusion on both sides, though, is the fact that every state treats division of pay differently. Puerto Rico, for example, does not divide military retirement at all.  Indiana requires the service member to be eligible for retired pay (twenty qualifying years) at the time of divorce before they will consider division.  North Carolina requires expert testimony on the value of the pension.  Maine does not allow for the computation of Cost of Living Allowances (COLAs) when awarding part of retired pay to a former spouse.  Some states are “shall divide” states while others are “may divide” states.  Anything you may have heard about a one-size-fits-all formula for dividing retired pay is false.

 

The Uniformed Services Former Spouses’ Protection Act allows for this sort of division during a divorce. Except for one recent modification, it gives very few rules on how the division is to occur.  For example, it sometimes allows for up to fifty percent of retired pay (after certain deductions) to be directly deposited into the former spouse’s bank account by the member’s pay center (the Defense Finance and Accounting Service for the Army, Navy, and Air Force, for example) but says nothing about courts requiring a higher amount from the service member (meaning the member would still be liable for paying any remainder out-of-pocket).

 

Let me describe how the division of pay happens.  First, we need to figure out what is called Disposable Retired Pay (DRP).  This is gross retirement pay minus any VA disability offsets, survivor benefit premiums, taxes, and any other money owed to the government.  DRP is what the pay center will divide (regardless of what courts may say) up to fifty percent and deposit in the former spouse’s account.

 

But wait!  It’s not that simple.  DFAS (and the other pay centers) will not always make things so easy for the service member.  There is a little understood rule (often called the “10/10 rule”) which requires ten years of the marriage to overlap a minimum of ten years of the member’s military service.  Contrary to what is often cited by barracks lawyers, there is no automatic eligibility for a portion of the member’s retirement after ten years of marriage.  It is still up to the state courts to decide if division of pay will happen at all.  If it does occur and the former spouse meets the 10/10 rule then the pay center will direct deposit up to fifty percent of the member’s disposable retired pay into the former spouse’s account.  The former spouse will need to file DD Form 2293 and a court-certified copy of the court order with the pay center for this to happen.  If the 10/10 rule is not met and a division occurs, the member is responsible for paying out-of-pocket.

 

I digressed a bit with that last paragraph.  Let’s get back to how the amount of pay the former spouse will receive is computed.  We’ve gone over how to reach the disposable retired pay amount.  The amount paid can either be a flat dollar amount of a percentage of disposable retired pay.  If the flat amount is elected, it will not change over time.  This means COLAs have no effect.  They will, however, be included if the percentage method is used.  So, you’ve computed disposable retired pay. Now what?

 

What happens next is going to vary based on a number of factors.  If the member is still serving, the MPDO has to state the member’s rights under the Servicemembers Civil Relief Act have been honored.  There is also the question of the “marital fraction” part of the computation.

 

Now we’re getting into a lot of confusing territory.  What the heck is a marital fraction?  This isn’t math class.  No, it’s more like abstract algebra.  Don’t be scared.  Dive into the pool and start kicking.  Eventually your head will break water and some semblance of sense will come to you.

 

I said earlier that each state does division of retired pay differently.  Keep that in mind with everything I am about to describe.  I am only giving a basic idea of things.  Your experience may vary.

 

The basic description of the marital fraction is this: what portion of retired pay was earned during the time the service member was married to the former spouse.  Here is the basic formula.

 

Marital Asset (Former Spouse’s portion) = [DRP x (marital service time ÷ total service time) ] X Court Ordered Percentage

 

Marital service time is the overlap of the marriage with the member’s military service.  For reservists, it would be the number of retirement points earned during the marital overlap.  Here is the same formula modified for reservists.

 

Marital Asset (Former Spouse’s portion) = [DRP x (marital service retirement points ÷ total retirement points)] X Court Ordered Percentage

 

Let me add some numbers to this equation so it will make a little more sense.  Let’s assume the disposable retired pay is $2,000, the member has 5,000 retirement points and earned 3,500 of those points while married to the former spouse.  The court awarded fifty percent of the marital fraction to the former spouse. We will call the marital fraction (or marital asset) M in this equation.

 

M = [$2,000 x (3,500 ÷ 5,000)] x 50%

 

Now think back to your seventh-grade algebra class and recall the order of operations.  First, we solve what is in parentheses so we’re dividing 3,500 by five thousand.  We get this.

 

M = [$2,000 x (0.7)] x 50%

 

Now we solve what is in the brackets.  We multiply $2,000 by 0.7.  We end up with this.

 

M = [$1,400] x 50%

 

We’re almost there.  Now we multiply $1,400 by fifty percent.  The former spouse’s portion of retired pay is $700 per month or 35% of the service member’s disposable retired pay.

 

M = $700

 

$700 ÷ $2,000 = 35%

 

Did that make sense?  I hope so.  I’m about to do something evil.  States used to have a great deal of flexibility in determining what the marital fraction was.  They could even decide whether to based the division of pay on the rank and points at the time of divorce or on the rank and points at the time the member began to receive retired pay.  A change in the law, effective 23 December 2016, changed all of this.  When retired pay is divided by a divorce decree, QDRO (erroneously), or MPDO and the member is still serving, the variables composing the marital fraction are now set for all states and territories.  The change does not affect those who divorce after the member is no longer serving (meaning the member is either in the Retired Reserve or is receiving retired pay).

 

For those people to whom the law change does apply, the marital asset is now based on the retirement points earned during the marriage and the pay grade and time in service the member had attained on the date of the divorce.  This is quite different from what I described earlier.  The previous example included total years of service and highest grade held.  Under these new rules, the pay grade and years of service could be significantly different especially if the member serves several additional years and is promoted one or more times after the divorce.  The new formula would look like this.

 

M = DRP x [(MRP ÷ TRP) x (MPG x HPG)]

 

M is Marital Asset.

DRP is Disposable Retired Pay

MRP is Marriage Retirement Points (the total points earned during the marriage)

TRP is Total Retirement Points

MPG is Marriage Pay Grade (the rate of pay in effect on the date of divorce)

HPG is Highest Pay Grade (the rate of pay in effect when the member began to receive retired pay (assumes the possibility of promotions and additional years of service))

 

I’m going to borrow an example from one of the articles in the references section (http://www.increa.com/articles/division-2017NDAA-USFSPA-tutorial/NDAA-USFSPA-ContinuingEducation.pdf, if you’re interested) since it works very well.  The numbers below will not match the referenced article due to rounding.

 

We start off by calculating the total retired pay, $5,000 per month.  We know 4,700 retirement points were earned during the marriage and a total of 5,500 points were earned during the member’s career.  The retired pay based on the member’s rank, years of service, and the points earned during the marriage equates to $3,298 per month.  The court has awarded 50% of the marital fraction to the former spouse.  Here is how the formula appears with these numbers plugged into it.

 

M = ($5,000 x [(4,700 ÷ 5,500) x ($3,298 ÷ $5,000)] ) x 50%

 

When we divide 4,700 by 5,500, we get .8545 (or 85.45%).  Dividing $3,298 by $5,000 equals .6596 (or 65.96%).  The equation now looks like this.

 

M = ($5,000 x [(85.45%) x (65.96%)] ) x 50%

 

The next step is to multiply the two percentages in parentheses.  This gives us 56.36%.  Now the equation looks like this.

 

M = ($5,000 x 56.36% ) x 50%

 

It’s getting simpler now.  Multiply the total monthly retirement by 56.36%.  We get $2,818.14.  This is the marital fraction of the member’s retired pay.

 

M = $2,818.14 x 50%

 

The former spouse receives fifty percent of the marital fraction.  That amount is below.

 

M = $1,409

 

This is a considerable difference over the formula I showed earlier.  If we used the previous equation, the amount of pay the former spouse would have received would have been $2,136 per month.  One argument in favor of the new rule is the promotion(s) and additional years of service did not happen during the time of the marriage and therefore should not be included when dividing retired pay.  An argument against the new rule, sometimes called the “marital foundation theory,” states that the final pay grade and years of service was built on the joint efforts of the service member and former spouse during the marriage.  You can find articles supporting both of these standpoints in the references section below.

 

That’s it for now.  Next week I will cover medical and on-post benefits.

Thanks for joining me today and, of course, thank you for your service.

D.J.


References
: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov


Military Divorce Minefields – Part 1 – Military vs Civilian Plans

I know writing this week’s article is going to be difficult.  I might even regret doing it.  Who knows?  It’s a touchy subject and I know full well that no matter what I do I will make someone mad at me (or, at least, at what I say).  I’m going to write it anyway.  The information needs to be put out there.  Deep breath.  “Damn the torpedoes.  Full speed ahead.”

 

Let’s talk about divorces in the military.  How do they affect service members, former spouses, their families, their money, and their benefits?  I am going to leave the more personal bits out of the discussion and talk mainly about pay, benefits, and survivorship.

 

We are going to get into some legal territory here. Let me say up front that I am not a lawyer or even a paralegal.  I do have a great deal of experience in this area from a retirement services perspective, though, and I will give examples of items with which I have dealt.  Let’s call this an “experienced layman’s point-of-view” supplemented by a great deal of research.  You can find several of the sites I visited in the references section below.

 

I certainly cannot go into all the different circumstances which could arise during a military divorce.  I will hit some of the most important highlights and describe them as best I can.  If I do get anything blatantly wrong, I welcome constructive criticism and correction.

 

Differences Between Military and Civilian Retirement Plans

 

First, let’s define what military retirement is not.  For civilian lawyers who are not regularly involved with military divorces, this is easily the most difficult to comprehend.  Civilian retirement plans are managed under a law called the Employee Retirement Income Security Act (or ERISA, for short).  ERISA defines the participation rules, funding, and vesting requirements for most pension plans in private industry.  Civilian lawyers are often very comfortable with how ERISA functions.  The problem here is military retirement does not operate in any way like an ERISA plan.

 

Just how different can civilian and military pension be, you may ask?  Well, here are several questions I was asked about a National Guardsman’s pension from a family law lawyer familiar with ERISA.

  1. What is the current balance of the member’s pension fund?
  2. What is the member’s contribution to the fund?
  3. What is the buy-out (or “lump-sum”) value of the fund?
  4. What portion of the fund was acquired during the marital period and what portion was vested on the date of divorce?
  5. Who is the asset manager of the pension fund?

 

See what I mean?  Even someone with a rudimentary understanding of military retirements can see that none of these questions can be answered satisfactorily.  The differences are just too great.  For example, while there is such a thing as the Military Retirement Fund on a macro level, there is no personal account for each service member.  There is no buy-out or lump-sum option (at least before the Blended Retirement System came to be and even then it would be difficult to calculate while the member is still serving).

 

The military pension, simply put, is a defined-benefit plan.  This means the member receives a certain standard amount or percentage of pay for each year of service.  Vesting, the point at which the benefit is definitely yours and cannot (usually) be taken away, is twenty years of qualifying service.  The same cliff vesting requirement holds true for most of the other benefits involved in military retirement, such as Tricare coverage and use of on-post facilities.

 

This all-or-nothing approach to pension eligibility is called “cliff vesting” and can be difficult for civilian attorneys to understand at first.  They are much more comfortable with the three to five-year vesting requirements of ERISA plans. Now throw in the unique nature of being a reserve retiree and you can practically see that lawyer’s head explode.  I recommend wrapping their heads in duct tape before telling them you’re a reservist so – when their heads do explode – you’ll at least have all the pieces in one place.

 

Now let’s take a quick look at how a division of pay and benefits would be accomplished.  Unless the terms of division are laid out in the divorce decree itself, division of assets usually occurs by way of a document called a Qualified Domestic Relations Order (or QDRO – often pronounced Quah-Dro, for short).  A QDRO works for most divisible assets but isn’t necessarily best for military pensions.  Since military retirements are not “qualified plans” like IRAs and 401(k)s, but are statutory programs (meaning created and managed exclusively by federal law), it is best to use a Military Pension Division Order (MPDO).  I will include sample language for an MPDO in the references section of this article.

 

Here is an interesting sidebar I have seen repeatedly over the years.  On several occasions, I have read divorce decrees which ordered the service member to keep Servicemembers Group Life Insurance (SGLI) policies on themselves with the ex-spouse as the beneficiary.  The decree even mandated the member to keep this policy after leaving service.  There is some good news for the member, though.  A Supreme Court decision from 1981 (Ridgway v. Ridgway, 454 U.S. 46 (1981)) declared courts cannot enforce orders requiring SGLI coverage.

That’s all for this week.  Next week I will cover a touchy subject, the division of retired pay in a divorce.  Join me for that.

Thanks for joining me today and, of course, thank you for your service.

D.J.


References
: ·

 

MILITARY PAY CENTERS

Air Force
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0875
Phone: 1-888-332-7411
Fax Coversheet:   https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Army
DFAS-Indianapolis Center
Attn.: Garnishments Section
8899 East 56th Street
Indianapolis, IN 46249-0865
Phone: 1-888-332-7411
Fax Coversheet: https://corpweb1.dfas.mil/civpaywf/coversheet
Fax: 866-401-5849
*Utilizing coversheet  expedites processing time*

Commanding Officer (SES)
Coast Guard Pay and Personnel Center

444 Southeast Quincy Street
Topeka, KS 66683-3591
Phone: 785-339-2200
Fax: 785-339-3780
US Coast Guard Website (https://www.uscg.mil/ppc/)
E-mail: PPC-DG-CustomerCare@uscg.mil

Marine Corps
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLTC
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3614; DSN: 580-7011
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.USMC-SPECIAL-PROCESSING@MAIL.MIL

National Oceanic and Atmospheric Administration (NOAA)
NOAA Commissioned Personnel Center
1315 East-West Highway, Rm. 12100
Silver Spring, MD 20910-3282

Navy
DFAS-Cleveland Center
Attn.: DFAS-CL/JFLAGB
1240 East 9th Street
Cleveland, OH 44199-2005
Phone: 888-332-7411
Fax: 216-367-3666; DSN: 580-7603
E-mail: DFAS.CLEVELAND-OH.JFL.MBX.CCL-CATCH-62-CLE@MAIL.MIL

Public Health Service
U.S. Public Health Service
Division of Commissioned Corps Personnel and Readiness
Commissioned Corps Compensation
1101 Wootton Parkway, Plaza Level, Suite 100
Rockville, MD  20852
Phone: 240-276-8799
Fax:  240-276-8817
E-Mail: CompensationBranch@psc.hhs.gov


Bonus Episode 006 – Tricare East Update

There is an important change coming up for those of you in the former Tricare North region. Please see the quote below from an update flier I received today.

WHO MAY BE IMPACTED BY THIS CHANGE?

Soldiers, families, and retirees previously covered by Health Net Federal Services in the TRICARE NORTH Region, who are now covered by Humana Military under the new combined TRICARE EAST Region, and are paying for the following coverages:

  • TRICARE Reserve Select (TRS)
  • TRICARE Retired Reserve (TRR)
  • TRICARE Young Adult (TYA)

IMPORTANT: Effective January 1, 2018, due to the contractor change from Health Net Federal Services (HNFS) to Humana Military, all Soldiers and Retirees formally in the TRICARE North Region, paying their premiums/fees by auto-payment from a banking account using Recurrent Credit Card (RCC) or Electronic Funds Transfer (EFT) to Health Net Federal Services MUST set up a NEW auto-payment with Humana Military. By law, the contractors cannot exchange credit card or banking information. Even if you already have auto-payment from your bank account to Health Net Federal Services, you MUST re-establish a NEW payment with Humana Military.

* This does NOT affect Soldiers or retirees in the South Region or who currently have an Allotment (PRIME ONLY) set up with DFAS. These allotments were transferred and do not have to be re-establish to a new allotment.

IF IN DOUBT, please check the Humana Military website at www.humanamilitary.com/provider-east (which will change to www.tricare-east.com in the near future) or call to verify at: (800) 444-5445.

This notice is important not only for keeping Tricare coverage. It is also critical in order to prevent having to re-enroll to keep coverage. Re-enrolling requires paying two months of premiums up front. Let’s help people prevent having to do this. Please pass this information on to others you think should know about it.

By the way, the contact number I originally gave in the YouTube episode is incorrect. The correct number is shown in this article and on the corrected flier.

Thanks for joining me today and, of course, thank you for your service.

D.J.

References:
Tricare East Region Update


What is the Gray Area?

Let’s start off with a little easier topic.  This week’s topic is, “What is the Gray Area?”  You’ve heard me say in the past a gray area retiree, reserve retiree, retiree awaiting pay, things like that. Well, this week I’m going to explain just what is.

 

Now, for an active-duty retiree, someone with the required amount of service, when they retire they get

retired pay and all the benefits that go with retirement right away.  We reservists are on a slightly different plan. When we retire, if we are under age sixty, we go into what is called the “gray area.” The official term is being put in the Retired Reserve but that’s a lot of syllables so we say gray area.

 

The reason we say that is it is kind of a gray area. You’re retired but you’re not. In in a really official, technical category all that has happened is you’ve been transferred into another component in the Army Reserve.  They call it a control group.  You’re in a different status but you’re still in the military, not fully retired.

 

The Retired Reserve is essentially a holding cell, a waiting room, waiting for you to reach the age at which you can receive your pension, but that is not without benefit.  There are several benefits to being in the Retired Reserve.  One of them is, since you still have a military status, then you are still accruing longevity of service.  Anyone familiar with the military pay scale knows that the longer you’re in service, the more money you make up to a certain point per pay grade. The farther along that scale you go and as your length of service increases, the more money you make. So when you are in the Retired Reserve you still gain longevity for pay purposes.  You also still maintain the cost-of-living increases that go along with still being in the military.  If you’re discharged completely, you would not get those cost-of-living increases. Your pay will be based on the pay scale in effect when you separate.  Those two little things are actually quite big when it comes to the money that goes in your pocket once you hit the right age.

 

What about other benefits there are, things beside just the cash that make being a military retiree so unique?  Well, let me go through a quick list of what some of those are.  For those interested you can find in the notes a chart that I’ve made. I actually borrowed it word for word and just reformatted from the Human Resources Command website just for full disclosure. I didn’t write this myself but there are some provisos, some slight changes I’ll make verbally as we go along because this isn’t entirely accurate.  It technically is but there are a few exceptions, to some of the things here. Let’s just go along so on some of these hits some of the major topics and see what we can make of it.

 

Let’s take a look at the first and most obvious sign of being a gray area retiree,  your military ID card.  You no longer have a common access card (or CAC).  You have a teslin – or paper-based and laminated – card.  For people in the gray area, that card is pink in color.  There is a separate card for their dependents – spouses and children –This card is tan.

 

That is the most obvious time of being a gray area entirely and actually it’s the key to everything else.  If you do not have a Retired Reserve ID card then please go and get one.  In fact, I’ll post in the notes a link to a site locator for DEERS at ID card sites. If you don’t have an ID, card make use of this and find the closest ID card facility to you.  In fact, in the future, I will do an article on the types of ID cards and how you can get the proper one for yourself as well as the documents you would need to do so.

 

Now before I go into the rest let me talk about the other type of ID card.  Once you’ve actually hit age sixt,y once you actually start receiving your retired pay, you actually are eligible for a different type of ID card.  This one is blue and has a few key differences over the pink card.  The most important one is on the back.  There’s a section that says, “Medical,” with two sub-clauses.  The first says, “Direct,” which means on-post medical care and the other says, “Civilian,” which means civilian providers who accept Tricare.  Both of those will say, “Yes,” on them.  This means you were Tricare eligible and your blue ID card is actually your Tricare health insurance card, as well. Your dependents will also have new cards with the same statement on the back.  This is the primary difference other than color from the Retired Reserve card.  For Retired Reserve ID cards for Tricare eligibility, it says, “no.”

 

Like I said, the ID card is the key to unlock all of the other benefits I’m going to describe.  Let’s go through a few of those.  Obviously, the most important, for people who have military installations in their states, is access to those installations.  There are a lot of facilities and benefits that can be utilized if you can just get on post and your ID card is the way to get on post.  That proves that you are eligible to make use of everything there and if you are not in uniform, which you wouldn’t be if you’re retired, then obviously when you are in these facilities and trying to make use of them you’ll be asked to show your ID card.  This is the most common and most easily understood by those of us who make use of commissaries and post exchanges.  If you’re in civilian clothes, they ask to see your ID card and after that it’s just another transaction.  You’re good to go.

 

So we have military installations and all of those goodies, that’s the most obvious benefit of post access but there’s a lot more than simply the PX (or BX if your Air Force) and the commissaries.  There’s also theaters, shoppettes, recreational facilities, bowling alleys, libraries, other little stores, things of that nature.  All of these are going to want to see your ID card before you come inside or when you’re actually making a purchase.  You’re going to need to present those cards in order to prove you’re eligible to make use of those facilities.

 

Now let’s get into some other things. I mentioned medical facilities.  Well, if you are a reserve retiree, then in most cases you are not able to use the medical facilities unless you’ve been subject to a retiree recall and put on an active duty status.  During the time you’re in that status, you yourself would have access to medical facilities but your spouses and dependents would not.  That obviously would change once you are age sixty and Tricare eligible.  Then you can all make use of medical facilities.

 

Now let me mention one thing with this chart that I’m going to post.  The next thing on this list is Tricare and the chart says, “not eligible,” for gray area retirees.  There is a version of Tricare called Tricare Retired Reserve which is eligible, which is available for purchase.  It is quite expensive.  The reason for this is simply that Tricare itself is a heavily subsidized benefit for those of us who actually pay for it, but the Tricare Retired Reserve version is not subsidized.  You pay the full price of that benefit.  For a single member, the Tricare Retired Reserve rate is a little over $400 per month.  I don’t have the numbers right in front of me but I have talked about them in the past.  For a family, the monthly rate is a little over $1,000 per month.  Those premiums are only in effect while you’re in the gray area.  Once you hit age sixty, there are no premiums unless you choose a different version Tricare which is premium-based.  Some people choose to use Tricare and some choose to go with health care from other sources, health insurance from other sources, I should say.  That’s your prerogative; that’s your choice.

 

Another thing available to reservists in the gray area, believe it or not, is the Tricare Retiree Dental Program.  You are eligible to purchase that.  Those premiums are different based on your location.  I’m not going to give any examples of it right now.  If you’d like information on that just go to TRDP.org.  You can find the premiums for your area.  That’s also available for purchase when you are receiving retired pay.  Also, please remember, based on my YouTube episode, “Tricare Updates for 2018,” that next year TRDP is going away.  The Tricare Retiree Dental Program will not exist in 2019.  What will replace it is the Federal Employee Dental and Vision Insurance Program  (FEDVIP).  That will be something in which you can start enrolling in November of this year and make use of it starting in 2019. Your status in the DEERS database –the ID card database – needs to be updated to reflect your eligibility for either Tricare or the dental program.

 

Let’s move on to some other goodies.  One of the biggest benefits that I have pointed out to people when they are going into the Retired Reserve and when they are signing up for their retired pay is the use of military lodging facilities.  This is a huge savings to the wallet when you are traveling across the country.  I’ve had to go to various places in my career and have chosen many times to stay on post because of the significant cost difference.  In fact, on several occasions just in my area, I was put on temporary travel orders and the cost to stay in a hotel on the economy was about $120 per night but I was able to stay in a room on post for about $24 per night and sometimes less.  That in itself is an enormous savings and you can use that while you’re serving, when you’re in the Retired Reserve, and when you’re receiving the retired pay.  Again, all you have to do is show your ID card and you’re good to go.

 

A little utilized benefit, one that requires a great deal of flexibility, is space-A travel.  Space-A means space available.  This means that you could, if there is space on that flight, hop onto any military flight going to almost any destination and either have a quick vacation or sightsee.  With space-A, it’s exactly what it says; if there’s space available and if they’re accepting passengers.  So if you’re going to use this, the recommendation is to have a very flexible time frame

 

Here’s another interesting little thing you may have heard of, SATO (or Carlson Wagonlit).  This is a military-contracted travel agency.  They can help you set up trips, as well.  You can use it just about anywhere and again you just need your ID card.  You can use them to book travel, book hotels, flights, rental cars, all of that.  You just have to give them a call.  Rather than give all kinds of conflicting information I would say just hop on your browser of choice and search for Carlson Wagonlit and you can find.

 

Now we’re getting into some deep stuff here, some of the more morbid things that people don’t like to think about but we need to keep in mind; survivor assistance, casualty assistance, things of that nature.  That’s actually where people like me come in or survivor assistance.  If the person was gray area or a retiree receiving pay then the assistance from survivor benefit counselors and employees of survivor outreach services are available to you.  All you have to do is ask.  In fact, specifically with the survivor outreach services people, they are not allowed to reach out and make contact with survivors.  They have to be contacted first but that is where people like me, a retirement services officer, can bridge the gap.  I can act reach out to survivors and offer services as they’re available and more often than not those services are happily accepted.

 

Here we’ll get into a happier note there are a great many programs out there for families and children that fall under the Family Services umbrella.  This could be anything from child and youth development programs, leadership camps, all kinds of fun activities for children.  There’s a wide array of programs out there.  There is a great deal available to the families, not just fun stuff but also emergency assistance.  There are veterans assistance programs so if you had a short-term emergency, we could find ways to step in and assist.  Resume services, survivor outreach actually fell under family programs in my area, and personal financial counsellors that I’ve described in the past are also available.  Strangely enough, funeral honors program fell under family programs (in my area, at least.  That was odd).  That’s just some of the services available from family programs so if you search for military family programs online you’ll finding a long list of very interesting little tidbits that are available to you.

 

Now we go back to the darker topics, life insurance.  You are not eligible for servicemen’s group life insurance after you leave service.  You’ve got to be in actively drilling or actively serving status in order to have SGLI. That includes people in the individual Ready Reserve; by the way.  You are not considered to be in the Ready Reserve, an actively drilling status, so you are not eligible for SGLI when you’re in that status.  You have to come out, perform military duty, pay the premiums, and, if you choose, go back into an IRR status, but that coverage will maintain for at least the month for which you pay the premium. If you’re coming in and out every month, you still have coverage the whole time.

 

When you leave service, within 120 days, your SGLI coverage will lapse and, if you choose, you can convert that prevents that coverage to a veterans group life insurance policy.  Personal opinion forthcoming. Warning!  Warning!  I would not recommend going with veterans group life insurance (or VGLI) for one simple reason.  It is extremely expensive.  If you choose the maximum $400,000 in coverage then every five years effectively the premium doubles.  Let’s go all the way to the extreme.  If you are seventy-five years old, the monthly premium for VGLI is $1,840 per month and you can certainly find better rates elsewhere.  For the younger crowd, it is slightly better than $1,800 but it very quickly becomes excessive so you can easily find other insurance out there at a much better rate.

 

The last one that I’m going to cover and not even really in detail is Veterans Administration benefits.  Reservists are a funny crowd as far as the VA is concerned.  They (the VA) are in their mindset active-duty centric.  They’re used to dealing with people who were active duty.  They’re not used to reservists even though we actually outnumber the active duty folks.  Some reservists are eligible for VA benefits, compensation for disabilities, some medical care on a limited basis, home loans, educational assistance, things of that nature.  Reservists do have limited VA benefits it but it varies widely from individual to individual.  It’s completely based on your type of service.  If you were just a drilling National Guardsman your whole career then you would have some educational assistance, a GI bill of some sort, be eligible for a home loan, and, if you are retirement eligible then you could be eligible for things like a be a VA-paid marker for a grave site.

 

If you have had active duty experience particularly if it’s deployments, mobilizations, or active duty over a hundred eighty days and not for training purposes, then you could have a much wider set of the VA benefits.  Again, it varies wildly from person to person.  It would be best to contact a VA rep or a veteran services officer – actually that’s who I’d recommend moreso, a veteran services officer in your area – and they can explain what’s available to you.

 

This last item I’m going to hit just in kind of a glossing over manner.  State benefits, every state has its own set of service member benefits of one type or another.  In fact, what I’d like to know from you, the audience, is would you be interested in episodes that pick a certain state and describe all of these service member benefits for that state?  Would that be of interest and of use to you?

 

Like I said, I did not go over everything on this chart. You can find it by looking in the notes.  There’s a great deal I didn’t cover and I think you’ll be surprised when you take a look at what’s here.  This is just what’s posted officially.  There’s a lot more out there.  For example, during Veterans Day and Memorial Day, a lot of civilian companies offer discounts to service members and to veterans.  Very often they want to see an ID card and / or a DD-214 or NGB 22. I would recommend of course the ID card.  It’s a lot easier to carry around and it doesn’t have personal information splattered all over it.

 

In fact, let me throw that out there real quick.  If you have an ID card that has your social security number on it or the social security number of your sponsor, use the site locator I’m going to put in the notes.  Make an appointment with an ID card facility and get a new card.  The new cards have a Department of Defense ID number on them instead of the social security number so if it gets lost or if a copy is made then you don’t have as much of your personal information floating around out there as temptation to identity thieves. I will repeat if have a card with an SSN on it, go get a new card now.

 

I believe that’s quite enough for this week.  As always, if you have questions or comments please post them in the comments section of this article so I have a good indication of how many people are actually paying attention out there.  That’s always cool.  If you think this information is useful and would benefit other people, please hit share and send this to them so those people can make use of this information as well. I always enjoy comments from you.  I’ve had several just today, in fact.  That was a nice experience, as well.  Thank you for being part of this audience, thank you for your activity, thank you for your continued interest, and, of course, thank you for your service.  Have a great day.

 

D.J.

 

References:
Benefits for Gray Area and Recipients of Retired Pay
Soldier for Life Blog
RAPIDS Site Locator


Bonus Episode 005 – Senator Defends Reservists During Budget Debate

 

When I restarted this website and YouTube channel last year, I said I would avoid giving political opinions.  I hope to still keep that vow while still informing you of an interesting event from earlier today.

 

During the Senate budget debate this morning, a senator brought up some interesting facts unique to reservists.  That senator was Mrs. Joni Ernst, a retired National Guard officer.  I found a transcript of her speech on C-Span.com.  I will paste part of her comments below.  There were no paragraph breaks so I added breaks where they seemed most appropriate.

 

Mr. President, I rise today to urge Senate Democratic leadership to end their reckless government shutdown. It’s no secret that over the years I’ve made clear that I don’t like funding our government from one short-sided Band-Aid bill to another. We must establish a path forward to responsibly fund our government for the long term. It’s responsible and right thing to do for our military, for future generations, for our veterans, and for the American people. But rather than finding a long-term funding solution to ensure stability in our military, the Senate Democratic leadership has decided to shut down the government.

 

So what does that mean for our military? Well, for starters, critical defense projects have come to a halt. We can also see delays in maintenance of our critical aircraft, ships, our weapon systems at a time when our adversaries are becoming more aggressive and more advanced. And our service members who put their lives on the line every day for our country don’t know when they will receive a paycheck.

 

I have an advisor right now that is deployed to the Middle East. I received an e-mail from him this morning and he said it’s really hard for all of us here knowing that our government is shut down, but he said every day it’s the same for us here in Afghanistan. We will do what we need to do. God bless him for that. Iowa National Guardsmen are deployed overseas right now. One of my former units, the 248 aviation support battalion is spread out through the Middle East doing their mission while we struggle to find a way forward for them here in Washington, D. C.

 

Military schools have been canceled. I spoke to an active duty army officer this morning. She was scheduled for her pre-command course this weekend and her orders were canceled. She told me, I will not be able to go to that pre-command course before I deploy. She will head overseas not having had a vital course to instruct her on leadership in the military. The likelihood of her picking up that course again in the future, near zero — near zero.

 

Additionally, having served as a battalion commander in the Iowa National Guard during our last government shutdown, I can tell that you these shutdowns have a significant impact on our National Guardsmen. A shutdown prohibits our citizen soldiers from participating in drill and training exercises essential to our military readiness.

 

Our public affairs officer sent out this notice this morning from the Iowa National Guard. The headline, Iowa National Guard feels effect of federal government shutdown. Nearly 900 technicians furloughed. That’s in Iowa alone. Approximately 400 personnel sent home from weekend training. That’s just Iowa. 110,000 National Guardsmen were affected over this last weekend because of the shutdown. Now, should these men and women be called to defend our nation in the face of danger, it is critical that they are properly prepared and a government shutdown does not allow this.

 

During the time that the government shutdown goes on, we’re not able to maintain our equipment. That hurts our readiness. Our personnel can’t do their wellness and medical checks. That hurts our read aniness — readiness. Our military can’t get to their schools for advancement in their careers, that hurts our readiness. Once those orders to school has been canceled, you can’t just pick up on Tuesday, Wednesday, or Thursday and say, okay, I’m going to school now, there are only so many slots allocated. If you miss that training period, you may be waiting months, perhaps even years to pick up those schools in the National Guard.

 

During the shutdown our folks are furloughed. Depending on how long the government is shutdown, our citizen soldiers might not receive enough training days to be adequately prepared for duty. This could also mean that their time serving throughout the year might not be included in their total years of service, potentially further jeopardizing their benefits and pay. What a lot of folks here that haven’t served in the military or guard or active duty, what they don’t understand, in the reserve and guard you have to meet so many points in a year for that to be considered a good retirement year. If you fall a few days short of that, the entire year does not count towards your retirement. The entire year does not count towards your retirement.

 

It is very rare these days to have any politician who has military experience.  Even rarer is seeing a representative or senator who is knowledgeable about not just military affairs but details about reserve service, as well.  How often do you see someone stand up and mention specifics about reserve life, such as the difficulty of getting school slots or the basics of a retirement year?  Whatever you may think of the political parties, if you are a reservist then it is refreshing to see at least one elected official who has an understanding of your perspective.

 

If you would like to read the full transcript of Senator Ernst’s speech, you can find it at https://www.c-span.org/video/?440061-2/senate-votes-81-18-end-shutdown-leaders-reach-deal-daca-debate&vod&start=125.  There is also a YouTube video of her speech which can be viewed at https://youtu.be/tQKrK0kDZ2A.

 

D.J.


Staff Sergeant Angus Loses It All (The 6 and 8 Year Rules)

When does twenty-one years of active duty and reserve service – with more than fifty points for each year, by the way – not equal eligibility for reserve retirement?  If you completed your twentieth qualifying year prior to 25 April 2005, you might have learned the answer to this question.

 

Intrigued, yet?  Let me tell you about a man who learned this answer…to his great misfortune.

 

Staff Sergeant (SSG) Billy Angus was drafted into the Regular Army in March of 1968.  He extended his enlistment after three years and served for three more.  After a two-year break in service, he joined the National Guard.  He served in the Guard for four years before deciding in 1981 to enlist in the Regular Army again.  At this point, he had ten years of qualifying service for reserve retirement.

 

In 1992, after an additional eleven years of active duty service, SSG Angus allowed his enlistment to expire.  I do not know why he did not complete three more years of active duty service and qualify for a regular retirement.  He might have also been part of the downsizing in that year, but that is pure supposition on my part.  He believed he still would be eligible for reserve retirement at age sixty.

 

Much to SSG Angus’s surprise, when he applied for retired pay in 2008, he was informed that he was not eligible.  How could this be?  He had over twenty qualifying years, right?  Was the Army wrong?

 

The sad answer here is no, the Army was not wrong.  There was a law in place at the time which stated that in order to be eligible for reserve retirement the service member’s last eight years of service before achieving retirement eligibility must be in a reserve component.  Proving you’re eligible for reserve retirement requires having a notice of eligibility (AKA twenty-year letter).  This letter will not be issued until this legal requirement has been met.

 

Just to make this easier to understand, I’ll show his periods of service below.

 

 

Regular Army:      6 Years

National Guard:   4 Years

Regular Army:    11 Years

 

Total Qualifying Service: 21 Years

 

Like I said, the law at the time said his last eight years of service had to be in a reserve component.  His last eight years were in the Regular Army.  As a result, and despite his twenty-one years of service, SSG Angus was not eligible for any retirement benefits at all.

 

This little known legal requirement is simply called the eight-year rule by retirement services officers.  On 5 October 1994, the eight-year rule was replaced with its little brother, the six-year rule.  The requirement and effects are exactly the same except the service member only had to complete the last six years of service in a reserve component.

 

Here is an example of how these rules would work.  First, let’s look at the eight-year rule again.  Let’s assume SSG Angus served fourteen years in the Regular Army and then another six years in the National Guard.  He completes his twentieth year of qualifying service in 1992.

 

14 Years (Regular Army)

  6 Years (National Guard)

20 Years Total Service as of 1992

2 Years Still Required

 

In this example, SSG Angus would not receive a twenty-year letter because he has yet satisfied the eight-year rule.  He would need to serve two more years before he can be issued a notice of eligibility for retired pay.

 

Now let’s look at the exact same numbers but assume it is now 1995.

 

14 Years (Regular Army)

  6 Years (National Guard)

20 Years Total Service as of 1995

 

Now the twentieth qualifying has been completed while the six-year rule was in effect.  In this case, the service member would have been eligible for a twenty-year letter.

 

There is some good news for service members nowadays.  On 25 April 2005, the requirement for a certain number of years in a reserve component prior to receiving a twenty-year letter was lifted.  Everyone completing twenty qualifying years on or after this date will be issued a notice of eligibility regardless of how many reserve years they have.

 

This change was not retroactive.  The date on which a service member completes the twentieth qualifying year determines which rule to use.  Here they are as a simple list.

 

Before 5 October 1994:       8-Year Rule

Before 25 April 2005:           6-Year Rule

On or After 25 April 2005:   No minimum reserve requirement

 

There are still members who are currently serving who fall under these rules.  Chances are they have already qualified for a twenty-year letter by now but it is still best to be aware of these laws.  This next comment is for you retirement services officers out there.  Learn about these rules if you do not already know about them.  They are critical when counseling your people.  I will include links to the law and to useful presentations you can use while teaching them about these rules.

 

I would like to close by thanking all of you who have subscribed to this channel and to the podcast.  For you YouTubers out there, don’t forget you can subscribe to this channel by clicking on the RC Retirement icon on the bottom right of the screen.  This won’t work if you’re viewing this episode on a mobile device, though, only on a computer.

 

Please share this episode with people who you think can benefit from this information.  It is always best to be properly informed so one can make the right decisions.

 

Thanks for joining me today and, of course, thank you for your service.

 

D.J.

References:
10 U S  Code § 12731 – Age and service requirements
10 U.S. Code § 12732 – Entitlement to Retired Pay – Computation of Years of Service
6 and 8 Year Rules Presentation (PDF)
6 and 8 Year Rules Presentation (PPT)
SSG Angus’s Retirement Points Statement


Updating Survivor Benefit Elections (The Sad Story of SSG Walker)

Let me tell you about Staff Sergeant Jason Walker who can teach us all a lesson.  We can learn a great deal from his example.

 

Staff Sergeant Walker reached twenty years of qualifying service in the National Guard in 1998.  He was thirty-eight at the time.  He received a twenty-year letter a few months later.  Since he was single at the time, he chose to do nothing and let his Reserve Component Survivor Benefit Plan default to the “by law” election after ninety days.  In 1998, the default election was to defer a decision until age sixty (better known as Option A) when he would apply for his retired pay.

 

In 2009, SSG Walker, now a gray-area retiree, married forty-two-year-old Amy Strothers.  He registered his marriage certificate in the DEERS database and got his new bride a military ID card.  He also told her that she automatically would receive part of his pension if he passed away.

 

In 2016, while working on his roof, he fell off a ladder and fractured his spine.  He died in the hospital a few days later.  He was fifty-six years old.

 

Several months later, after the whirlwind inherent with the death of a loved one had passed, Mrs. Walker contacted me at my office.  After doing some research and asking some questions, I had to inform Mrs. Walker that there would be no survivor annuity for her.  Her only consolation would be Tricare coverage in 2020.

 

Do you see what happened here?  SSG Walker never updated his RCSBP election when he got married and he died before becoming eligible for retired pay.  The law prior to 2001 stated that reservists who did not make an election for RCSBP upon receiving a twenty-year letter would default to Option A.  This means no one gets anything if he dies.  He had one year from the date of his marriage to change his election to cover his wife.  This never occurred.

 

This is easily one of the sadder situations a retirement services officer can encounter.  We are a group that likes to say yes and do what we can to enable people rather than telling them there are limited options due to poor decisions or lack of action on someone’s part.  I was unable in this case to find anything else that could be done for Mrs. Walker.  The thought of Tricare in four years was of little comfort to me and I am sure even less for her.

 

Now we get to the moral of the story.  Rather than causing future harm on our loved ones, it is best if we make or update survivor benefit elections in a timely manner.  Believe it or not, it is a lot simpler than it looks.  As with so many things, especially paperwork, it is much scarier on its surface than it actually is. There was one time I had to talk a person through doing this over the phone.  He was another full-timer and I was so out of it with sickness I barely remember the conversation.  However, at the end, he still said, “That’s it?” and I responded that indeed that was all.

 

You can update a survivor benefit election using a DD Form 2656-6. I will put a link to it in the references below.  Using SSG Walker as a reference, here is a list of the questions he would have had to answer in order to add his wife to the plan.  Read it once (and get scared by it) and then think about how little effort it would actually take.

 

  1. Name
  2. SSN
  3. Date of Retirement
  4. Date of Birth
  5. Mailing Address
  6. Telephone Number
  7. Current Coverage
  8. Reason For the Change
  9. Requested Change
  10. Level of Coverage
  11. Spouse’s Name
  12. Spouse’s SSN
  13. Spouse’s Date of Birth
  14. Date of Marriage
  15. Signature
  16. Date Signed
  17. Name of Witness
  18. Witness’s Signature
  19. Date of Witness’s Signature
  20. Address of Witness
  21. Date of Expiration of Notary’s Commission (if applicable)

 

So we have a total of twenty-one questions here and the last one is only needed if the witness is not a certified survivor benefits counselor.  All that would be needed in addition to this information is the marriage certificate.

 

I am not one to usually say anything positive about paperwork, however this would be an exception.  If you take a look at this form, it is quite versatile in its design.  You can make an SBP change due to divorce, death of a beneficiary, the birth of a child, marriage, or remarriage to an earlier spouse.  All you need to do is check the appropriate block and attach a supporting document.

 

That is all there is this week.  It’s a fairly simple topic and I hope this information has proven useful to you.  If you know of anyone else who can benefit from this article, pleases share it with them.  I also welcome any questions or comments you may have.  Please post them in the comments section below.

 

Once again, thank you for being a part of the audience today and thank you for your service.

 

D.J.

Refererences
DD Form 2656-6

 

Related YouTube Episodes:
SBP Episode Playlist


Eligible SBP Beneficiaries

The funny thing about holidays, especially if they fall on a Monday, is they tend to cause you to lose track of what day it is.  I am writing this on Wednesday night rather than my usual Monday night routine.  I completely forgot what day it was.

I will also confess I got distracted by a few comments from the YouTube channel.  I had some very interesting questions which caused me to do a lot of additional research into answers.  For all that, I do apologize.  The good news, particularly for those who consume the podcast or my written articles, is there will be no noticeable delay.  However, since I use these articles as talking points for the YouTube episodes, I’ll be posting that new chapter very late in the evening.

 

Now, let’s get on with today’s topic.  This is actually what I had planned to cover back on the day when I decided to do the medical retirement series.  See how the best laid plans can be changed by life?  😊

 

Today, I will cover the types of people who can be beneficiaries under the survivor benefit plan.  This will be a fairly straightforward and short article…I think.  We’ll see as I write.

 

When Elections Are Made

Both when you receive a twenty-year letter (the Reserve Component Survivor Benefit Plan) and when you apply for retired pay (the Survivor Benefit Plan), you make some sort of survivor benefit election.  Even making no choice at all, under current law, is making a choice.

 

So who is covered or can be covered by this plan?  Who will receive a lifelong annuity based on your retirement income (even if you don’t live to receive it yourself) if you die?

 

Beneficiary Choices

 

Spouse Only

Both versions of the SBP were designed primarily as a form of income protection for the spouses of service members.  Naturally, this makes them the most common choice as a beneficiary.  The spouse even has the option to object if you choose to decline SBP coverage.  If anything less than full coverage is selected, the spouse has to agree and have the election form notarized.

 

For the Reserve Component SBP, the cost for coverage is based on the difference between your age and your spouse’s age.  There is a complex table of values used to determine this cost and I won’t cover that here.  The cost usually is no higher than three and a half percent of retirement.  For the other SBP (the one that covers you when you start receiving your retired pay; let’s call it the Active Duty SBP), has a maximum cost of 6.5% of retired pay.

 

Spouse and Children

You can also choose to select your children – in addition to your spouse – beneficiaries for SBP (in case both you and your wife die).  This is very cheap coverage since the children will “age out” over time.  They are eligible to receive the annuity (divided equally among them) until they turn eighteen or, if they’re full-time students, until they turn twenty-two.  As a child ages out, the annuity is recomputed to pay an equal amount to those who are still eligible.

 

If you have selected this option, the difference in cost over what it would have cost to cover only your spouse is pennies.  I recall one time when a retiree asked me to compute the difference between the two premiums (covering his wife only or his spouse and children) and the difference was seven cents more to cover his children also.

 

Former Spouse (or Former Spouse and Children)

Sometimes a divorce decree will order a member to provide survivor benefits for an ex-spouse.  At other times, the service member voluntarily chooses to do this.  If either of these happens, there is a little bit of additional paperwork to make this happen, but it is quite simple.  The costs for this are the same as Spouse or Spouse and Children.

 

Children Only

As I said earlier, children can age out of eligibility for the SBP annuity, but you can choose to cover them instead of a spouse or choose them if they’re your only dependents.  The cost is slightly higher for this option but it is typically only a few dollars per month.  I believe ten dollars is the highest I’ve ever seen.

 

One thing to keep in mind is whether the child (or children) is (are) disabled to the point they are incapable of providing their own support.  If this is the case, the age limits I mentioned earlier do not apply.  There are some additional documentation requirements, as I’m sure you expected, like physicians’ statements and sometimes even court orders, but they’re not too difficult.

 

The only real burden is this.  SBP will not pay an annuity to a minor or to someone who is incapable of making sound decisions on their own.  For this reason, it’s a good idea to either appoint a guardian (with the proper documents, of course) or to establish a special needs trust.  I will post a link to an FAQ from findlaw.com which describes this kind of trust (this is not an endorsement of the site, just some good information.  Do your own research to find what meets your particular need).

 

The other thing to keep in mind if you’re choosing to cover a special needs child is the impact the income from the SBP annuity might have on any sort of state or federal assistance they may be receiving (another good question for a lawyer).  Many forms of welfare are income-dependent and SBP is considered a type of income.  Again, do the research and choose what is best for you and your child(ren).

 

Natural Interest Person (NIP) AKA Insurable Interest

A natural interest person (or, as I’ll call it, an insurable interest) is typically any other person who is either closely related to you (like a cousin, parent, or sibling) or who has a vested interest in your continued survival (like a business partner).  These people can be listed as SBP beneficiaries, as well.

 

There are two downsides to this sort of election.  First, the premiums are significantly higher.  The costs are a minimum of ten percent of your retirement up to a maximum of forty percent (depending on the difference between your age and the age of the person).  The other factor is the annuity is lower.  Instead of a flat fifty-five percent of your retirement being paid as the annuity, this sort of beneficiary receives an annuity based on the following formula.

 

(Retired pay – SBP premium) X 55% = Monthly Annuity

 

In other words, the cost of the premium is subtracted from your retirement and then the annuity is fifty-five percent of what is left.  It can actually work out that the annuity is less than the total premium you are paying.  Keep this in mind before making this type of election.

 

The good news, though, is you can choose to cancel an insurable interest election at any time.  This is quite different from any other beneficiary election because those are usually locked in unless you have a qualifying life event (like a divorce or the death of a beneficiary).

 

No Beneficiary

If you have no eligible dependents and do not wish to make an insurable interest election (based on what I just described), you can opt not to participate in the Survivor Benefit Plan.  If you have a change in your status, you can make an update to your decision within one year of the change.

 

Decline

Lastly and similar to the no beneficiary option, you can choose not to have SBP coverage at all.  If you’re married, as I said before, your spouse has to agree with this decision and the election form has to be notarized (you don’t need a notary if you choose full coverage for your spouse).

 

Well, that is it for SBP beneficiaries.  This didn’t turn out to be too horribly long after all.  Thank you for joining me.

 

Next week, I plan to cover changing SBP elections.  I believe this is a critical action on the part of the service member for a variety of reasons.  I’ll talk about why that is next week.

 

As always, I ask that you spread this information to people whom you think could benefit from it.  Let’s continue building this audience.  Thanks for joining me today and, of course, thank you for your service.

 

D.J.

References:
https://www.dfas.mil/retiredmilitary/provide/sbp/coverage.html

https://www.dfas.mil/retiredmilitary/provide/sbp/educate.html

Department of Defense Instruction 1332.42 – 20090623 – Survivor Annuity Program Administration

Special Needs Trusts FAQs (Findlaw.com)

 

Related YouTube Episodes:

SBP Episode Playlist

 


Tricare Changes in 2018

Like any new year, there are a lot of changes coming for us all.  While I know we could have a great deal of fun identifying them all, I’ll keep the list short and only talk about one thing: Tricare.

 

Right away we know this can get complicated and there will be a lot of terms which sound alike   Brace yourselves.  I’ll do my best to make this easy.  If you would like to double check what I’m about to describe or just want more information, I’m going to include a LOT of references from the Tricare website.  Don’t be overwhelmed by the number of them.  Like anything, take them one bite at a time and they will be understandable.  Hopefully, my summary of these topics will help, as well.

 

For anyone who may not know, Tricare is the health care program for military members and their families.  There is a separate purchase option for dental coverage called Tricare Dental (there is also a retiree version called the Tricare Retiree Dental Program).  There are several different versions of Tricare available to service members.  Which type is used is often based on the member’s duty status and personal choice.

Continue reading


The Physical Disability Board of Review

Welcome to the last article in my medical retirement series.  I will post additional information in the future, of course, but this is the end of the official series.  Congratulations on making it to this point.

 

Finally, you’re at the end of it all.  The medical board are over.  You have a rating…or you don’t.  Either way, you’ve been separated from service as a result of your disabilities.  There’s one problem, though.  You either did not have enough of a disability rating to be medically retired or you think your rating should have been higher.

 

What do you do?  Well, there is an option for you.  There is a group of people called the Physical Disability Board of Review whose sole purpose is to examine cases submitted by people in your situation.  This obviously is not something you should do simply for grievances sake, but only if you think there are legitimate reasons to appeal.

 

Who can apply for consideration by this board?

 

Each branch of service has their own version of this review board.  I have posted some information about the some of those versions in the references below.  This is by no means all of what you can find about these boards and how to use them.  I advise using what I have posted as a starting point and doing a little homework of your own.

 

In the Army, there are two such boards with separate missions.  The Army Physical Disability Review Board (APDR) examines the results of previous medical boards.  It is for people who were separated or retired without pay for disabilities within the last fifteen years.

 

The APDR does not require a request form (some of the other services want a DD Form 294) in order to start a review.  Whichever way you go to request a board, be sure to include your full name, SSN, contact information, and what you think the result of the previous board should have been.  Write a good story.  You’re trying to sell your point of view.  Don’t just say something like, “I got blowed up and it hurt.”

 

Side note:  Yes, I have actually seen board requests with narratives like what I wrote above.  Some are even worse, like simply listing “foot patrol” as the reason for all of their ailments.  If writing is not your particular strong point, I recommend recording yourself telling someone the story of how you were injured and then transcribing exactly what you said.  I have used this technique successfully with service members in the past.

 

Back to it.  Once you have written the letter (or filled out the form), you should also include any evidence you think the board needs to consider.  This will often be the same documents you provided for the previous medical board.

 

The other board the Army has is called the Army Disability Rating Review Board (ADRRB).  This board only reviews those cases which are seeking a higher rating for disability pay purposes (military, not VA).

 

Except for having modified the opening sentence to make it more understandable, here is a quote from the board’s website about who is eligible to apply.

 

If you have a disability retirement order and seek a higher disability percentage, you may apply if the reason is:

  • Your original retirement order was based on fraud or a mistake of law;
  • You were not granted a full and fair hearing when you made a timely demand for such a hearing; or
  • You have substantial new evidence which, by due diligence, could not have been presented before the retirement decision and which would have warranted a higher percentage of disability.

Source: http://arba.army.pentagon.mil/disability-appeals.html

 

In English, this means you have a good reason to believe you were not properly rated during the medical board or you have new information which was unavailable at the time of the board.  This is not the place to present new problems you may have.  You should only send documentation about the injuries you claimed during the board (unless there are disabilities you would have claimed at the time but you did not have records to support the claim).

 

Once you have completed requesting the review and assembling the packet to go with it, you should send the packet up for consideration.  Federal law has directed the Air Force to be the lead agency for all of these types of reviews so you should send your packet to the address below.

 

SAF/MRBR

Attn: PDBR Intake Unit

550 C Street West, Suite 41

Randolph AFB, TX 78150-4743

 

The actual medical evaluation of your case is a joint venture, not just the Air Force so don’t worry about an unfair review of your request.  The Air Force simply has overall responsibility for tracking and reporting disability review cases.

 

There is far too much detail to make a simple explanation of the procedures of these boards possible.  I’m only trying to make you aware of the options available to you.  I recommend talking to a retirement services officer or legal counsel for more information about the board itself and how to make it work for you.  Every branch of service has a specialized group of lawyers available for this purpose.

 

Has this article helped you better understand your rights and options regarding medical evaluations and retirements?  I certainly hope so.  If there are questions looming in your mind then please put them in the comments section below and I will find an answer for you.

 

Don’t forget to forward this article to others who may find this information beneficial.  Understanding your rights and benefits is the whole point of this site after all.  I am sure your buddies will appreciate your willingness to share with them.

 

As always, thanks for joining me today and being part of this audience.  Lastly, but not the least, of course, thank you for your service.  Have a great day.

 

D.J.

 

 

References:
Physical Disability Board of Review (PDBR) (DODLive.mil)
Coast Guard Board for Correction of Military Records (BCMR)
Disability Appeals (Army)
Disability Review Board (Navy)
Physical Disability Board of Review FAQ (Health.mil)
Physical Disability Board of Review FAQ (afpc.af.mil)
DOD Instruction 6040.44 (dated 4 December 2017) – Physical Disability Board of Review (PDBR)
Physical Disability Board of Review Charter
DD Form 294 – Application for a Review by the Physical Disability Board of Review


Related YouTube Episodes
:
Help, I Need My Records. Where is My DD 214?
Should I Take Drill Pay or VA Compensation?
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO
“But My PEBLO said…”  The Truth About Concurrent Retired and Disability Pay
Continuation on Active Duty and Continuation on Active Reserve


Related Podcast Episodes
:
Help, I Need My Records. Where is My DD 214?
Should I Take Drill Pay or VA Compensation?
Change of Plans: New Series on Medical Retirement
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
Interview With a PEBLO
“But My PEBLO said…”  The Truth About Concurrent Retired and Disability Pay
Continuation on Active Duty and Continuation on Active Reserve


Related Articles
:
Help, I Need My Records. Where is My DD 214?
Should I Take Drill Pay or VA Compensation?
I’m Medically Unfit for Retention. Now What?
Beware the IDES of Medical Boards…?
“Jackpot! I’ve Been Offered a HUGE Severance Payment.”  DJ says, “Don’t Take It.”
“But My PEBLO said…”  The Truth About Concurrent Retired and Disability Pay
Continuation on Active Duty and Continuation on Active Reserve