Paycheck Chronicles

Survivor Benefit Plan and Remarriage

I receive a surprising number of emails from military widows and widowers who are receiving Survivor Benefit Plan (SBP) annuity payments, and don't know what will happen if they remarry.  Thankfully, the rules for this situation are clear and uncomplicated.  It's always nice when that happens.

If a SBP recipient remarries after age 55, there is no change to his or her benefits.

If a SBP recipient remarries prior to age 55, SBP payment stop.  They may be restarted if the subsequent marriage ends due to death, divorce, or annulment (pretty much any reason.)  A friend of mine falls into this category, and she has successfully had her benefits reinstated.

There is always some frustration about these rules, but this is the way that they have been for a very long time.  There are regularly various groups trying to have the rules changed.  I can not speculate whether any of these efforts will ever be successful.

There are also complicating factors with the SBP-Dependency and Indemnity Compensation (DIC) offset, but these do not change the general rules.

The SBP is a premium-based annuity, very similar to an insurance policy, designed to replace a portion of a military retirees income after their death.  The retiree pays premiums from their military retirement pay, and covered beneficiaries may receive up to 55% of retirement pay after the death of the service member.  This is important coverage because military retirement pay ends with the death of the retiree.

Some people dislike SBP because if the ways that it mimics insurance:  there is no payout of the covered spouse dies before the retiree (though SBP can be reinstated if the retiree remarries.)  Others are frustrated by the SBP-DIC offset mentioned above.

I contend that SBP is extremely affordable coverage that provides Cost-of-Living-Adjusted, lifetime income.  A similar commercial policy would cost substantially more, and would likely require medical qualification that could be problematic for many military retirees.

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