U.S. Military (Ret.): Paid-Up SBP’s rules have no wiggle room - Military Retirement - Navy Times

U.S. Military (Ret.): Paid-Up SBP’s rules have no wiggle room

I’m digging into the mailbag this week to address a couple of issues about which multiple readers have written to me recently.

Paid-Up SBP

Last October, a change took effect in the Survivor Benefit Plan under which retirees who paid premiums for at least 30 years and were at least 70 years old were considered “paid up” in the program and would not have to pay more premiums.

I’ve heard from readers who had paid into SBP for more than 30 years prior to that change and think it’s unfair that they will receive no refunds for those extra premiums. I have also heard from readers who paid for more than 30 years but had not yet reached age 70.

I understand the frustration, but the law is clear on both points — no refunds for paying more than 30 years of premiums and no halt in premiums unless you have paid for 30 years and are at least age 70.

You can contact your senators and representatives and voice your concerns, but I don’t think there’s a realistic chance we’ll see any further changes to the Paid-Up SBP.

Recoupment of separation pay

I’ve also received inquiries about the May announcement by the Defense Finance and Accounting Service that it was suspending recoupment of various separation payments for certain military retirees, including the Voluntary Separation Incentive, Special Separation Benefit and other payments, such as severance pay.

This one was confusing. Here’s the scoop: It affects people who were offered separation incentives, mainly during the drawdown of the late 1990s. Those who took the payments were required to maintain an affiliation with the Ready Reserve of a reserve component.

The law said that if they later transitioned to military retirement status, the government was to recoup the separation payments.

DFAS received many waiver requests from retirees who said the recoupment of their separation payments — out of their military retired pay — caused financial hardship. So defense officials have put a hold on further recoupments while they review the policy.

Anyone affected by this situation should have been notified by DFAS in writing. If you didn’t get such a letter, you don’t have to worry. More details are on the DFAS Web site; visit http://www.dfas.mil/news/2009pressreleases.html and click on “DFAS suspends VSI/SSB recoupment.”

Keep the reader feedback coming — this column is designed to address the issues that are important to you. Don’t hesitate to give me your views.

———

Retired Command Master Chief Alex Keenan served 28 years in the Coast Guard. E-mail him at retired@atpco.com.