U.S. Military (Ret.): Don’t count on open season for Survivor Benefit Plan - Military Retirement - Navy Times

U.S. Military (Ret.): Don’t count on open season for Survivor Benefit Plan

Q. Can you tell me if there are any plans for another Survivor Benefit Plan open season for military retirees? I have not been enrolled in SBP but am interested in doing so now.

A. Generally, retirees need to decide whether to enroll in SBP at the time of their retirement. But many retirees seem to be under the impression that the Defense Department routinely holds open seasons in which you can enroll in the SBP long after you retire.

That’s not the case. In the nearly 40-year history of the SBP, only five such open seasons have been held, and each one came after major changes had been made to the program.

The first open enrollment season did not occur until 1981-82, almost a decade after the program was established. The most recent was in 2005-06.

Elections made by retirees during an open season generally require a two-year waiting period before the election becomes effective. This prevents people with short life expectancies from rushing to join up, which could destabilize funding for a program that is financed in large part by the monthly premiums paid by enrollees.

Bottom line, retirees can’t count on an SBP open season. There’s no way to tell when — or if — another one will take place. Such periods are not built into the plan and crop up only through specific legislative action by Congress.

More information on the SBP can be found online: click here.

Q. Can you give me an update on early retirement eligibility for reserve-component members? I’ve heard it has been lowered to age 50.

A. Under legislation passed by Congress Jan. 28, 2008, the Defense Department changed the rules for applying service credit to reserve retirement.

For years, reservists had to wait until age 60 to begin drawing military retirement benefits. The 2008 law allows reserve-component members to begin tapping those benefits 90 days earlier than age 60 for every 90 days of qualifying active-duty service in support of contingency operations and other federal missions. Active-duty time under voluntary and involuntary mobilizations qualifies.

You’re correct that the minimum age threshold under this law is 50.

But there’s a big caveat that greatly riles reservists: The law has no retroactivity. Only qualifying service performed after the enactment date, Jan. 28, 2008, can be counted toward the lower retirement age. Congress did that for budgetary reasons.

Military advocacy groups have been trying to get the effective date pushed back to Sept. 11, 2001. But so far, they have had no luck.