Survivor Benefit Plan (SBP)

Regular Army: Retired

Benefit Fact Sheet

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Summary:

Military pay, including active duty pay and allowances and retired pay, stops upon a Soldier's death. The Survivor Benefit Plan (SBP) is a program through which the Department of Defense provides monthly, cost-of-living-adjusted income to eligible survivors of Soldiers who die on Active Duty, including Reserve Soldiers and National Guard Soldiers who die on Federal Active Duty, and of Retirees who choose to continue participating in the program after they retire.

Soldiers who retire due to a service-connected disability incurred while on active duty, whether Regular or Reserve, may participate in SBP.

Reserve and National Guard Soldiers may participate in the Reserve Component-Survivor Benefit Plan (RCSBP) when they complete 20 years of qualifying service for non-regular retirement.

The following table illustrates which program applies to whom, depending on one's duty status and retirement eligibility:

 

Survivor Benefit Plan (SBP) Eligibility

Regular Army on active duty

SBP. Benefits calculated as if retired with 100% disability. Death must be in Line of Duty unless retirement-eligible If retirement eligible and LOD Not In Line of Duty, benefits based on years of active service.

Regular Army retired

SBP, if they enroll upon retirement. Line of Duty determination not applicable.

Reserve and National Guard Soldiers in non-drilling status with less than 20 years of service

No SBP or RCSBP.

Reserve and National Guard Soldiers on Inactive Duty Training

RCSBP. Benefits calculated based on points earned as of date of death. Death must be in Line of Duty. If retirement eligible and LOD Not In Line of Duty, benefits based on years of active service.

Reserve and National Guard Soldiers on Federal Active Duty, regardless of years of service

SBP. Benefits calculated as if retired with 100% disability. Death must be in Line of Duty. If retirement eligible and LOD Not In Line of Duty, benefits based on years of active service.

Reserve and National Guard Soldiers in non-drilling status with at least 20 years of service

RCSBP. Only if they enrolled with Option B or Option C when they received 20-Year Letter; or received the 20 year letter, are within the 90 day period, but have not made an RCSBP election; or should have received a 20 year letter. Death does not need to be in Line of Duty.

Reserve and National Guard Soldiers at age 60 who had enrolled in RCSBP with Options B or C

At age 60 RCSBP for non-regular Reserve Retirees becomes SBP. Line of Duty determination not applicable.

Reserve and National Guard Soldiers at age 60 who had not enrolled in RCSBP (elected Option A)

SBP. Only if they enroll in SBP upon receipt of retired pay. Line of Duty determination not applicable.

Reserve and National Guard Soldiers over age 60 who had not enrolled in either RCSBP or SBP

No SBP or RCSBP.

Eligibility:

Regular Army Soldiers, who are covered under SBP at no cost while on active duty, are eligible to continue participating in SBP when they transfer to the Retired List. If they have eligible dependents whom they could name as SBP beneficiaries but do not do so, they will never be able to enroll in SBP thereafter. If a Retired Soldier is recalled to active duty, his or her original SBP election cannot be changed upon subsequent release from active duty. While on active duty the recalled Retired Soldier is covered by active duty SBP.

Eligibility:

Regular Army Soldiers, who are covered under SBP at no cost while on active duty, are eligible to continue participating in SBP when they transfer to the Retired List. If they have eligible dependents whom they could name as SBP beneficiaries but do not do so, they will never be able to enroll in SBP thereafter. If a Retired Soldier is recalled to active duty, his or her original SBP election cannot be changed upon subsequent release from active duty. 

Benefit Highlights:

Prior to retirement, Soldiers must receive counseling by an installation Retirement Services Officer before making their SBP elections (DD Form 2656, Data for Payment of Retired Personnel). Enrollment in SBP requires the Soldier to forfeit a small portion of his or her retired pay monthly (referred to as a "premium") for life or until they pay 360 SBP premiums and are at least age 60   SBP premiums are only paid for as long as the beneficiary remains eligible to receive benefits. Elections are made by the category of beneficiaries discussed below.

At time of retirement, Soldiers select how much of their retired pay they wish to cover when they select their "Base Amount". A Base Amount can be any amount between $300 and full retired pay (Soldier's retiring under the REDUX Retired Pay Plan may elect an SBP base amount equal to the amount retired pay would have been under the High Three Year Retired Pay Plan). Maximum benefits are 55 percent of the Soldier's Base Amount (referred to as an "annuity"). Any election that provides less than maximum benefits for the Soldier's Spouse requires the Spouse's written concurrence. Base Amounts increase at the same time and at the same rate as cost-of-living adjustments to retired pay.

If a Soldier does not have an eligible dependent for an SBP category at time of retirement, the Soldier has one year from the date of first acquiring an eligible beneficiary after retirement to notify the Defense Finance and Accounting Service (DFAS) and make an SBP election. If the Retiree does not elect coverage for an eligible beneficiary within one year of acquiring them, that category of beneficiary is closed for that dependent and all future dependents in that category.

Beneficiary Categories:

There are six categories of survivors who may be named as SBP beneficiaries:

1. Spouse
2. Child(ren) Only
3. Spouse-and-Child(ren)
4. Former Spouse
5. Former Spouse-and-Child(ren)
6. Insurable Interest

Spouse. A Spouse named as beneficiary must be married to the Soldier on his or her date of retirement. The Spouse is immediately eligible to receive benefits, regardless of how long they have been married. A Soldier who is unmarried on his or her date of retirement may enroll in SBP later if he or she marries. The election must be made within one year of the date of the first marriage following retirement, and the Spouse becomes eligible to receive benefits after one year of marriage (or immediately if the Spouse is the parent of a Child of that marriage or remarriage to a former Spouse who was the covered Spouse at retirement).

A Spouse election applies not only to the Spouse a Soldier has at time of enrollment but also to any future Spouse. If a participating Retiree loses his or her Spouse through death or divorce, the Retiree still has Spouse coverage, but it goes into a "suspended" status. If the Retiree remarries, the Spouse election reactivates, and the new Spouse automatically becomes an eligible beneficiary after one year of marriage or at the birth of a child of that marriage, whichever is soonest. During that first year, the Retiree has three choices: (1) Allow the previous SBP election to resume (which happens automatically if the Retiree does nothing); (2) Terminate participation (which forever prohibits participation in the future); or (3) Increase coverage if the previous election was for less than maximum benefits. Under the third option, the Retiree would be required to pay premiums for the increased coverage retroactively to the date of initial enrollment for all periods of previous Spouse coverage, less any premiums already paid. Spousal concurrence is not required, but DFAS informs the Spouse by mail of the coverage elected.

A Surviving Spouse can receive SBP benefits for life, but remarriage before age 55 suspends eligibility to receive benefits. If such marriage later ends by death or divorce, eligibility is restored.

Integration with Dependency and Indemnity Compensation (DIC): Surviving Spouses and minor Children of Surviving Spouses and minor Children of Soldiers and retirees whose deaths are determined to be service-connected by the Department of Veterans Affairs (VA) are entitled to tax-free compensation from the VA. This benefit is called Dependency and Indemnity Compensation (DIC). Under current law, the SBP payment to a Surviving Spouse is offset (reduced) dollar-for-dollar by the amount of spousal DIC compensation.

For example: If the SBP entitlement is $1,500 and the spousal DIC amount is $1,233 (effective December 1, 2013), then the SBP annuity is reduced to $267 ($1,500 - $1,233 = $267). The combined total of SBP and DIC is still $1,500, but $1,233 of it is tax-free. Children are also eligible to receive DIC, but their SBP annuities are not reduced by DIC.  Any premiums paid for SBP coverage by a retiree that is offset by DIC will be refunded to the Surviving Spouse.If a Surviving Spouse who is receiving both SBP and DIC remarries after age 57, he or she continues to receive SBP without an offset by DIC.

A Surviving Spouse whose SBP annuity is offset by DIC is entitled to a monthly Special Survivor Indemnity Allowance (SSIA) from the Department of Defense. In Fiscal Year 2014, the monthly payment is $150. It will increase to $200 during FY 2015, to $275 during FY 2016, and to $310 during FY 2017. There are no provisions in current law to extend SSIA beyond FY 2017. SSIA is payable only to Surviving Spouses because Children's SBP annuities are not offset by DIC.

Spouse-and- Child(ren). The Spouse is the primary beneficiary. Benefits pass on to eligible Children only if the Surviving Spouse dies or remarries before age 55.

Child(ren) Only. Eligible Children are the beneficiaries. Benefits are divided equally among all eligible Children. If the SBP annuity is divided among multiple Children, as each Child ages beyond the eligibility limit, the annuity is reapportioned among the remaining Children. Ultimately, the youngest Child ends up receiving the entire annuity, which then terminates when the youngest Child reaches the eligibility limit. Eligible Children include natural Children, adopted Children, stepchildren, and foster Children who lived with the Soldier in a normal parent-Child relationship. Children may receive SBP benefits until age 18, or age 22 if enrolled full-time in high school, college, vocational or technical school, or another recognized educational institution. An exception is that if a Child reaches age 22 while in school, and his or her birthday is before July 1 or after August 31, eligibility continues until the earlier of the Child's cessation of full-time studies or the 1st day of July following that birthday. A Child who becomes incapable of self-support due to a physical or mental disability before age 18, or before age 22 while a full-time student, may receive benefits for life, as long as he or she remains unmarried. Prior to electing SBP coverage for an incapacitated Child, the retired or retiring Soldier should research the effect of the SBP income on other benefits to which the incapacitated Child may be eligible under state or local welfare or support programs.

Former Spouse. A Soldier may name a former Spouse as beneficiary at time of retirement, which can be done either voluntarily or in compliance with a court order. After retirement, a former Spouse can be named as beneficiary only if the former Spouse had been an eligible Spouse beneficiary. To do so, the Retiree must change the Spouse election to a Former Spouse election within one year of the date of divorce using DD Form 2656-1, SBP Election Statement for former Spouse Coverage, with a copy of the divorce decree and any other court order awarding SBP. To ensure that a court-ordered election is carried out, a former Spouse has a one-year period from the date of the first court order awarding SBP to request that a Former Spouse election be deemed by submitting DD Form 2656-10, SBP/RCSBP Request for Deemed Election.

If the former Spouse remarries before age 55, the former Spouse becomes ineligible to receive benefits, but the Former Spouse election remains in force and reactivates if the former Spouse's marriage ends by death or divorce. A Former Spouse election can be changed to a Spouse election if the Retiree remarries at any time after the remarriage. If the Former Spouse election was made voluntarily, the former Spouse's concurrence is not required, but if the Former Spouse election was made pursuant to a court order, a subsequent court order relieving the Retiree of the obligation would be necessary to make the change.

Former Spouse-and-Child(ren). This is identical to the "Spouse-and-Child(ren)" option in costs and benefits, except that only Children acquired during the Soldier's or Retiree's marriage to the former Spouse may be named as beneficiaries. This is true even if the Child had been a beneficiary under a previous Child(ren)-Only or Spouse-and-Child(ren) election if the Children were not adopted by the former Spouse.

Insurable Interest. A Soldier who is unmarried and has no Children at time of retirement can elect coverage for a person who has an insurable financial interest in the Soldier's continuing life. An exception is that if an unmarried Soldier has only one Child, that Child may be named as an Insurable Interest beneficiary. An insurable interest is presumed for all Family members related more closely than a cousin (parents, stepparents, grandparents, grandChildren, aunts and uncles, brothers and sisters, half-brothers and half-sisters, and dependent or non-dependent Children or stepchildren). Documentation of a financial interest is required for all other beneficiaries. This option may be cancelled at any time or changed to cover a Spouse or Child later within one year of acquiring them. Upon the death of an Insurable Interest beneficiary, the Retiree may elect a new Insurable Interest beneficiary within 180 days of the previous beneficiary's death. If the Soldier retired due to disability, the Soldier must live for at least one year after retirement or die from a cause unrelated to the disability for benefits to be paid. Insurable Interest beneficiaries receive benefits for life. See the paragraph in the next section about Insurable Interest premiums for more information about Insurable Interest annuities.

SBP Premiums:

Spouse and Former Spouse Premiums. SBP premiums for Spouse and Former Spouse coverage are the same: 6.5% of the designated Base Amount. Soldiers who entered active duty before 1 March 1990, and Reservists and disability retirees regardless of when they entered service, will have their premiums calculated under an alternate, two-part formula if it results in a lower premium.

 (threshold effective 1 Jan 14 is $768 and the .  The breakeven point where using the 6.5% spouse SBP premium calculation for all base amounts above that amount is more advantageous is 1645.  Below chart needs to be updated with new threshold and breakeven point.

Spouse-and-Child(ren) Premiums. The premiums for Spouse-and-Child(ren) coverage (as well as Former Spouse-and-Child(ren) coverage) are calculated by adding the cost for Spouse coverage (described above) to a very small, actuarially determined cost for the "Child(ren)" portion of the coverage. This additional cost is extremely inexpensive because benefits are payable to the Children only in the uncommon situation in which both parents have died, or the Retiree has died and the Surviving Spouse remarries before age 55 while the youngest Child is eligible to receive benefits. The ages of both the Soldier and the Soldier's Spouse and the age of the youngest Child on their birth dates nearest to their date of enrollment are all factors in determining the cost. An accurate premium calculation can be obtained at the DOD Office of the Actuary website, but the following table illustrates some examples for selected age combinations, assuming both the Soldier and the Spouse are the same age:

For each $1,000 Base Amount, the monthly premiums for Spouse-and-Child(ren) coverage would be:

$65.00 (6.5% of $1,000 Base Amount) (or $44.00 under the two-part formula), plus the appropriate cost shown in the table below:

 

Premiums for "Child" Portion of "Spouse-and-Child(ren)" Coverage

per $1,000 of Base Amount

  

Member and Spouse Same Age

Youngest Child's Age

  

2

  

4

  

6

  

10

  

14

  

17

25

$ 3.56

$ 3.02

$ 2.51

$ 1.54

$ .74

$ .35

30

2.89

2.43

1.99

1.21

.59

.29

35

1.35

1.12

.91

.53

.24

.11

40

.53

.43

.34

.18

.08

.03

45

.56

.43

.33

.18

.08

.03

50

.95

.66

.45

.21

.09

.04

55

2.58

1.76

1.17

.46

.15

.06

Child(ren) Only. The premiums for SBP Child(ren) Only coverage are very modest and are based upon actuarial factors determined by a combination of the Soldier's age and the age of the Soldier's youngest Child on their birth dates nearest to the date of enrollment. It doesn't matter how many Children there are since the one 55 percent benefit is divided equally among all eligible Children. An accurate premium calculation can be obtained at the DOD Office of the Actuary website, but the following table illustrates some examples for selected age combinations:

SBP Premiums for "Child-Only Coverage per $1,000 of Base Amount

  

Member's Age

Youngest Child's Age

2

4

6

10

14

17

25

$ 11.11

$ 9.70

$ 8.40

$ 6.00

$ 3.70

$ 2.30

30

13.40

11.80

10.20

7.20

4.40

2.80

35

7.50

6.60

5.70

4.00

2.50

1.50

40

5.30

4.30

3.50

2.20

1.30

.80

45

7.70

6.30

5.00

3.00

1.70

1.00

50

13.20

10.80

8.70

5.30

2.90

1.60

55

24.90

20.50

16.60

10.30

5.70

3.30

 

Insurable Interest. Premiums for this category of coverage are calculated much differently than they are for all other categories. First, only one's full retired pay can be selected as the Base Amount. Monthly premiums are 10 percent of the Base Amount, plus an additional 5 percent for each full 5 years that the beneficiary is younger than the member. For example, a 40-year-old retiring member with retired pay of $3,000 per month who wants to name his 24-year-old sister as his Insurable Interest beneficiary would pay 10 percent of his $3,000 Base Amount ($300), plus another 15 percent of his Base Amount ($450 -- 5 percent for each full 5 years, and she is 16 years younger than he is), for a total cost of $750 per month (25 percent of his retired pay) per month. The maximum premium is 40 percent of retired pay.

Monthly SBP annuities for Insurable Interest beneficiaries are also less than those for all other categories. To calculate the annuity, first subtract the monthly premium from the Base Amount to determine an "Adjusted Base Amount". The monthly annuity is then 55 percent of the Adjusted Base Amount. In the example above, the monthly annuity would be $1,237 ($3,000 Base Amount - $750 Premium = $2,250 Adjusted Base Amount x 55% = $1,237).

Additional Benefit Provisions:

SBP elections are generally irrevocable. However, the program includes provisions that allow certain changes to be made to accommodate changes in the status of Soldiers and their dependents.

Terminating Coverage. SBP participants have the option to terminate their elections between the 24th and 36th month after enrolling. They cannot make any changes to their elections during this period - only terminate it - so it is important that they give careful consideration to their elections before they make them. Spousal consent is required. Declining coverage or terminating coverage is rarely a good idea because Family circumstances can change over time. If full SBP coverage for the Spouse a member has at time of retirement is not needed or desired, it might become appropriate for a subsequent Spouse if that marriage ends by death or divorce. Those who terminate will never be able to re-enroll, regardless of any changes in their health or marital status.

Soldiers retired due to disability have the option of discontinuing participation in SBP if they have been rated by the Department of Veterans Affairs (VA) as being totally disabled for 5 or more continuous years since retirement or for 10 or more continuous years commencing after retirement (because such deaths are presumed to be service-connected, thereby entitling the Surviving Spouse to DIC, which offsets SBP dollar-for-dollar). Spousal consent is required. Upon the Retiree's death, the Surviving Spouse would be entitled to a refund of all premiums paid. If the Retiree's disability rating is withdrawn or reduced, the Retiree may resume SBP coverage within one year after the VA rating has been withdrawn or reduced.

Retirees who become employed under the Federal Civil Service System and subsequently choose to waive their military retired pay in order to have their years of service credited toward Federal Civil Service retirement will have their SBP election terminated if they elect the Federal Civil Service survivor benefit. If they do not elect the Federal Civil Service survivor benefit, they must continue participating in SBP, paying premiums by direct remittance to the Defense Finance and Accounting Service (DFAS).

SBP premiums are payable for a total of 30 years (360 months) and attainment of age 70. Premiums paid for any beneficiary category count toward paid-up status (Spouse, Child, Former Spouse, etc.). Periods during which there are no eligible beneficiaries, and therefore no premium payments, do not count. For example, if a Service member enrolled in SBP and then got divorced and remained single for 5 years, he would not pay premiums during those 5 years, nor would he during his first year of remarriage (because premiums are only paid during periods in which there is an eligible beneficiary, and a new Spouse does not become eligible until after one year of marriage). Those 6 years, therefore, would not count toward paid-up status. However, if the member has Spouse-and-Child coverage and continues paying Child(ren)-Only premiums during those 6 years, they would count.

SBP premiums are paid with pre-tax dollars. Since SBP premiums are paid in the form of a reduction in retired pay, they are not includable as taxable income. If, for example, one's SBP premium is $100, and they are in the 28 percent marginal tax bracket, their true out-of-pocket cost would be only $72 ($100 - 28% = $72). That is important to know if one is considering purchasing life insurance as an alternative to SBP based upon their relative costs.

SBP annuities are taxable income to survivors. Retirees get the tax break on the premiums while they are alive (and likely in a higher income tax bracket than their survivors), but their survivors' SBP benefits are taxable (usually at lower rates) at the federal level and in most states.

Continuing Eligibility.

Retired Soldiers continue to be eligible to participate in SBP if they have maintained coverage since retirement for all beneficiaries who were eligible when they retired or for whom they acquired after retirement, i.e., if a Retiree declines coverage for a Spouse acquired after retirement, the Retiree will never be able to cover a subsequent Spouse. Similarly, if a Retiree has no Children at time of retirement but subsequently acquires Children through birth, adoption, marriage, or as a foster parent, the Retiree has one year from the date of acquiring them to name them as SBP beneficiaries. If the Retiree does not do so, the Retiree may never elect coverage for a Child thereafter. If a Soldier elects coverage for Children at time of retirement, ALL Children subsequently acquired are automatically immediately eligible as SBP beneficiaries, without option. There are no provisions to terminate coverage for Children, except during the 1-year period between the 24th and 36th month immediately after retirement.

Surviving Spouses remain eligible to receive SBP benefits for life unless they remarry before age 55. In such cases, their eligibility is "suspended", rather than terminated, and will resume if their remarriage ends by death or divorce. SSIA would also be terminated because it is payable only when an SBP annuity is being offset by DIC. SSIA and DIC are restored if the remarriage ends by death or divorce. Remarriage after age 57 allows a Surviving Spouse authorized both SBP and DIC to receive SBP without an offset by DIC.

Additional Information:

For more information, please contact your nearest installation RSO and or visit the SBP web page maintained by the Army Retirement Services Office (Army RSO), Army G-1: (A listing of installation RSOs is available on the Army RSO web page.)
http://www.armyg1.army.mil/rso/sbp.asp

To view a calculation of survivor benefits, including SBP payments to eligible dependents, visit the MyArmyBenefits Survivor Calculator (AKO account needed):
http://myarmybenefits.us.army.mil/Home/Benefit_Calculators/Survivor_Benefits.html

Office of the Secretary of Defense, Military Compensation SBP website:
http://militarypay.defense.gov/survivor/sbp/01_overview.html

Army Casualty: https://www.hrc.army.mil/site/Active/TAGD/CMAOC/cmaoc.htm

Special Survivor Indemnity Allowance (SSIA) Information from DFAS:
http://www.dfas.mil/dfas/retiredmilitary/newsevents/news/AnnuitantsSBP.html

Additional Information:

For more information, please contact your nearest installation RSO and or visit the SBP web page maintained by the Army Retirement Services Office (Army RSO), Army G-1: (A listing of installation RSOs is available on the Army RSO web page.)
http://soldierforlife.army.mil/retirement/sbp.html

To obtain a detailed estimate of your survivor benefits, including SBP payments to eligible dependents, visit the MyArmyBenefits Survivor Calculator (AKO account needed):
http://myarmybenefits.us.army.mil/Home/Benefit_Calculators/Survivor_Benefits.html

Office of the Secretary of Defense, Military Compensation SBP website:
http://militarypay.defense.gov/survivor/sbp/01_overview.html

Army Casualty:
https://www.hrc.army.mil/TAGD/CMAOC

DFAS "Manage your SBP Annuity" website:
http://www.dfas.mil/retiredmilitary/survivors/manage.html

Document Review Date: 27 February 2014