No refunds for SBP payments past 360 months, age 70 - Military Retirement - Navy Times

No refunds for SBP payments past 360 months, age 70

My mail indicates there is still some concern and bitterness among retired service members who paid into their Survivor Benefit Plan longer than they feel they should have — and want reimbursement for what they consider “over-payments.”

Paid-Up SBP affects retirees who have reached 70 years of age and made 360 monthly premium payments into SBP (30 years) as of Oct. 1, 2008.

Paid-Up SBP is just the latest in a series of changes the program has undergone since its inception well more than half a century ago.

The 1999 Defense Authorization Act made one of the most significant changes in the history of the SBP when lawmakers decided to allow participants to stop making premium payments if and when they pay at least 360 months of premiums and reach age 70.

But as is often the case with Congress, there was a huge catch — lawmakers delayed the effective date of that change for 10 years, until Oct. 1, 2008, as a money-saving move.

The problem with that delayed effective date is that thousands of retirees who had been paying into the program since as early as 1972, when the modern SBP was established, ended up paying into it for as long as 36 years.

Since these retirees would otherwise have been eligible to have their premiums halted well before the 2008 effective date under the tenets of the Paid-Up SBP initiative, they quite justifiably ask why the government doesn’t refund them the premiums they paid beyond 30 years and/or age 70.

Unfortunately, there is no satisfactory answer to that question. Congress does what Congress does, and lawmakers rarely if ever revisit such decisions.

With the federal budget situation being what it is, with all the uncertainty about sequestration and the “fiscal cliff,” it’s extremely doubtful that affected retirees will see any relief on the Paid-Up SBP issue.

The fact is that many policy changes involve effective dates that serve as dividing lines between “haves” and “have-nots.”

This change could be viewed from a glass-half-full or glass-half-empty perspective.

In the broadest sense, it’s a valuable boon and provides significant peace of mind for eligible retirees not to be burdened with SBP premium payments for the rest of their lives. But the idea of being reimbursed for “overpayments” under Paid-Up SBP is, I’m afraid, water under the bridge.