Survivor Benefit Plan Update: Participants in the Uniformed Services Survivor Benefit Plan for retired military members now have a new milestone to mark on their calendars.
Effective October 1, 2008, SBP participants who reach 70 years of age and have made 360 payments (30 years), will no longer have to pay premiums for continued SBP coverage and will be placed in "Paid-up SBP" status.
Paid-up SBP provisions were mandated by the National Defense Authorization Act for fiscal 1999. The law also established a paid-up status, also beginning on October 1, 2008, for participants in the Retired Serviceman's Family Protection Plan once they reach 70 years of age.
The law establishing Paid-up SBP does not allow for refunds of premiums paid before October 1, 2008, even though a retiree may have reached age 70 and made 360 or more premium payments.
DFAS is currently developing changes to the military retiree pay systems that will monitor the number of SBP premiums paid and the age of the participant. The system updates are targeted for a May 2008 completion date. At that time, SBP participants who will be eligible for Paid-up SBP status on October 1, 2008, or will meet eligibility within a short time of the implementation date, will be notified by mail of their impending paid-up status.
Those military retirees who become eligible for Paid-up SBP status after the initial group will be notified of their SBP status on their December 2008 annual Retiree Account Statements that will note the number of premiums paid to date. Each RAS issued after December 2008, whether annually or as a result of a pay change, will include the Paid-up SBP premium "counter," based on DFAS records, to help retirees monitor their eligibility status.
What is Paid-Up SBP?
Paid-Up SBP refers to a provision of the Survivor Benefit Plan law passed in October 1998, and which is due to take effect 1 Oct. 2008, in which qualified members will no longer be required to pay SBP premiums once they satisfy certain age and premium payment requirements.
Who is eligible to have their SBP premiums stopped?
Any retiree who is 70 or older, and whose retired pay has been reduced for SBP premiums for at least 360 months.
Is a retiree who has paid SBP premiums for 360 months or more but has not reached 70 eligible to have
No. To qualify for the paid-up SBP, a retiree must satisfy both requirements of the law. The retiree must be 70 or older and made SBP premium payments for at least 360 months.
When does Paid-Up SBP begin?
The paid-up SBP does not take effect until 1 Oct. 2008. The first retired pay payment affected will be the payment dated 1 Nov. 2008. For more information: visit the DFAS website at http://www.dfas.mil/retired pay.html or call 1-800-321-1080. DFAS will continue to provide updates as more information becomes available.
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