Some retirees will no longer pay SBP premiums in 2008
ARLINGTON, Va. (AFRNS) – Participants in the Uniformed Services Survivor Benefit Plan for retired military members now have a new milestone to mark on their calendars.
Effective October 1, 2008, SBP participants who reach 70 years of age and have made 360 payments (30 years), will no longer have to pay premiums for continued SBP coverage and will be placed in “Paid-up SBP” status.
Paid-up SBP provisions were mandated by the National Defense Authorization Act for fiscal 1999. The law also established a paid-up status, also beginning on October 1, 2008, for participants in the Retired Serviceman’s Family Protection Plan once they reach 70 years of age.
No action is required of SBP participants to be placed in Paid-up SBP status. Once the eligibility criteria has been met, the Defense Finance and Accounting Service will automatically stop deducting premiums from qualifying military retired pay accounts.
The law establishing Paid-up SBP does not allow for refunds of premiums paid before October 1, 2008, even though a retiree may have reached age 70 and made 360 or more premium payments.
DFAS is currently developing changes to the military retiree pay systems that will monitor the number of SBP premiums paid and the age of the participant. The system updates are targeted for a May 2008 completion date. At that time, SBP participants who will be eligible for Paid-up SBP status on October 1, 2008, or will meet eligibility within a short time of the implementation date, will be notified by mail of their impending paid-up status.
Those military retirees who become eligible for Paid-up SBP status after the initial group will be notified of their SBP status on their December 2008 annual Retiree Account Statements that will note the number of premiums paid to date. Each RAS issued after December 2008, whether annually or as a result of a pay change, will include the Paid-up SBP premium “counter,” based on DFAS records, to help retirees monitor their eligibility status.
More information on Paid-up SBP, including frequently asked questions and news updates, should be available at the DFAS Web site at http://www.dfas.mil/retiredpay.html within the next several months. (Courtesy of the Defense finance and Accounting Service)