Capt Hank
01-28-2005, 16:17
** Nelson, Corzine Introduce SBP Bill
Sen. Bill Nelson (D-FL) and Sen. Jon Corzine (D-NJ) introduced a new joint bill this week to address two remaining major Survivor Benefit Plan (SBP) inequities.
S. 185, the Military Retiree Survivor Equity Act, would end the deduction of VA survivor benefits (paid when the member’s death is caused by a service-connected condition) from the survivor’s SBP annuity. It also would move up the 2008 effective date of 30-year paid-up SBP coverage, which now imposes undue financial penalties on “Greatest Generation” SBP enrollees, to a 2005 implementation.
Senators Chuck Hagel (R-NE), Richard Durbin (D-IL) and Mark Dayton (D-MN) joined Nelson and Corzine as original cosponsors in this bipartisan effort.
“At a time when we’re asking for great sacrifices from the volunteer service members who protect and defend this nation, it’s more important than ever to uphold the commitments we’ve made to them,” Sen. Nelson said.
Survivors of members who die of service-connected causes are entitled to Dependency and Indemnity Compensation (DIC) ($993 per month for a survivor without children) from the VA. The surviving spouse’s SBP annuity is reduced by the DIC amount. A pro-rated share of SBP premiums is refunded to the widow upon the member’s death, but with no interest. MOAA believes strongly that, if military service caused a retired member’s death, the VA indemnity compensation should be added to the SBP benefit the retiree paid for, not substituted for it. No survivors of civilian retirees who are also disabled military veterans and die of a military-service-connected cause must forfeit their purchased survivor benefits to receive DIC.
For members killed on active duty since November 24, 2003, a surviving spouse with children can avoid the dollar-for-dollar offset by assigning SBP to the children. But that forces the spouse to give up any SBP claim after the children attain their majority – leaving the spouse with only $993 a month from the VA. There are about 53,000 survivors affected by the DIC offset.
The FY 1999 Defense Authorization Act authorized retired SBP enrollees who have attained age 70 and paid SBP premiums for at least 30 years to stop paying premiums, while retaining SBP coverage. But Congress delayed the effective date to Oct. 1, 2008 to save money. Members who retired after 1978 only have to pay 30 years, but tens of thousands of “Greatest Generation” retirees who signed up for SBP as early as 1972 will have to pay premiums for up to 36 years. And they paid higher SBP premiums for almost two decades before premiums were reduced in 1990. By October of this year, a 1972 retiree already will have paid almost 20% more premiums than a 1978 retiree will ever have to pay.
You can do two things now to help correct these SBP inequities:
Visit MOAA’s Web site at http://capwiz.com/moaa/issues/bills/?bill=6872756 to urge your senators to cosponsor S. 185. Just enter your ZIP code in the box and click “GO” to send a MOAA-suggested message.
Sign, stamp and mail the four tear-out letters to key House and Senate leaders that you’ll find in your Military Officer magazine coming to your mailbox in the next few days.
Sen. Bill Nelson (D-FL) and Sen. Jon Corzine (D-NJ) introduced a new joint bill this week to address two remaining major Survivor Benefit Plan (SBP) inequities.
S. 185, the Military Retiree Survivor Equity Act, would end the deduction of VA survivor benefits (paid when the member’s death is caused by a service-connected condition) from the survivor’s SBP annuity. It also would move up the 2008 effective date of 30-year paid-up SBP coverage, which now imposes undue financial penalties on “Greatest Generation” SBP enrollees, to a 2005 implementation.
Senators Chuck Hagel (R-NE), Richard Durbin (D-IL) and Mark Dayton (D-MN) joined Nelson and Corzine as original cosponsors in this bipartisan effort.
“At a time when we’re asking for great sacrifices from the volunteer service members who protect and defend this nation, it’s more important than ever to uphold the commitments we’ve made to them,” Sen. Nelson said.
Survivors of members who die of service-connected causes are entitled to Dependency and Indemnity Compensation (DIC) ($993 per month for a survivor without children) from the VA. The surviving spouse’s SBP annuity is reduced by the DIC amount. A pro-rated share of SBP premiums is refunded to the widow upon the member’s death, but with no interest. MOAA believes strongly that, if military service caused a retired member’s death, the VA indemnity compensation should be added to the SBP benefit the retiree paid for, not substituted for it. No survivors of civilian retirees who are also disabled military veterans and die of a military-service-connected cause must forfeit their purchased survivor benefits to receive DIC.
For members killed on active duty since November 24, 2003, a surviving spouse with children can avoid the dollar-for-dollar offset by assigning SBP to the children. But that forces the spouse to give up any SBP claim after the children attain their majority – leaving the spouse with only $993 a month from the VA. There are about 53,000 survivors affected by the DIC offset.
The FY 1999 Defense Authorization Act authorized retired SBP enrollees who have attained age 70 and paid SBP premiums for at least 30 years to stop paying premiums, while retaining SBP coverage. But Congress delayed the effective date to Oct. 1, 2008 to save money. Members who retired after 1978 only have to pay 30 years, but tens of thousands of “Greatest Generation” retirees who signed up for SBP as early as 1972 will have to pay premiums for up to 36 years. And they paid higher SBP premiums for almost two decades before premiums were reduced in 1990. By October of this year, a 1972 retiree already will have paid almost 20% more premiums than a 1978 retiree will ever have to pay.
You can do two things now to help correct these SBP inequities:
Visit MOAA’s Web site at http://capwiz.com/moaa/issues/bills/?bill=6872756 to urge your senators to cosponsor S. 185. Just enter your ZIP code in the box and click “GO” to send a MOAA-suggested message.
Sign, stamp and mail the four tear-out letters to key House and Senate leaders that you’ll find in your Military Officer magazine coming to your mailbox in the next few days.