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Survivor Benefits Plan u Rick Burns u 1255 Vandenberg Blvd u Little Rock AFB, AR 72099 u 501-987-3580 u

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Presentation on theme: "Survivor Benefits Plan u Rick Burns u 1255 Vandenberg Blvd u Little Rock AFB, AR 72099 u 501-987-3580 u"— Presentation transcript:

1 Survivor Benefits Plan u Rick Burns u 1255 Vandenberg Blvd u Little Rock AFB, AR u u

2 Concurrent Retirement Disability Pay (CRDP) u Ret Pay $1814 $1855 $1962 $1962 $1962 u 60% VA $ 984 $1006 $1064 $1064 $1064 u Taxable $ 830 $ 849 $ 898 $ 898 $ 898 u CRDP $ 551 $ 740 $ 922 $1007 $1046 u Total Tax $1381 $1589 $1820 $1905 $1944 u Plus VA $ 984 $1006 $1064 $1064 $1064 u Take home $2365 $2594 $2884 $2969 $3008

3 What is SBP? u Retired pay stops when you die! u Many widows were being left destitute u 21 Sep 72 Congress implemented the SBP u Government subsidized annuity program u Patterned after the Civil Service annuity plan u SBP is only way your survivors may continue to receive a portion of retired pay

4 Who can be a beneficiary and receive the payments? u Spouse only u Receives payments for life u Remarriage after 55 does not suspend payments u Child(ren) only u under 18 or until 22 if unmarried, full time student u Permanently disabled child receives for life

5 Who can be a beneficiary and receive the payments? u All eligible children receive the annuity in equal shares u Spouse and Child u Spouse is primary beneficiary u All eligible children receive the annuity in equal shares only if spouse becomes ineligible due to death or remarriage before age 55

6 Who can be a beneficiary and receive the payments? (cont.) u Former Spouse only u Former Spouse and Child u Only the member’s and that former spouse’s children can be covered under this option

7 Who can be a beneficiary and receive the payments? (cont.) u Insurable Interest Person u Only when no spouse or children at retirement u Can be a relative u If related closer than a cousin, no financial justification required u Can be non-related person with financial interest in retiree u Proof must be provided: life insurance beneficiary, joint property owners

8 What is a Base Amount? u Base amount is the amount that determines: u The monthly cost to the member u The annuity paid to the eligible survivor u Retiree selects the base amount: u Highest -- full gross retired pay u Lowest -- $300

9 How much does SBP cost? u Monthly spouse costs are usually 6.5 percent of base amount u Child only cost is based on age of member and youngest child u Less expensive than spouse coverage u Spouse and child coverage: u Spouse cost plus additional amount for the children u Additional child cost is based on age of member, spouse and youngest child (less than the cost of child only coverage)

10 Cost Examples u Assume base amount is $1500 and ages are: u Retiring member: 43; Spouse: 41; Youngest child: 7 u Assume full coverage is elected u Spouse only coverage costs $97.50 per month u Child only coverage costs $8.40 per month u Spouse and child coverage costs $98.05 u Additional cost for child’s portion is only 55 cents

11 How much does a spouse receive? u Example of annuity payable upon member’s death: u If base amount selected is: $1500 u 55% of base amount: X.55 u Monthly annuity: $825

12 How much does a child receive? u Example of annuity payable upon member’s death: u If base amount selected is: $1500 u 55% of base amount: X.55 u Monthly annuity: $825 u Benefit split equally among all eligible children u 2 eligible children receive $ each u Caution: Child coverage, is less expensive, but it can’t replace spouse coverage

13 Different than Insurance u SBP premiums are non-taxable u SBP coverage can’t be canceled due to ill health or advanced age u Government pays portion of SBP premiums u Insurance provides lump sum payments, however- u Pay-out usually decreases with age or premiums rise u When lump sum is gone, that’s it! u SBP provides life-time payments to spouse u SBP annuity increases with COLAs

14 Mandatory Retirement Processing Actions u Attend one-on-one SBP briefing for you and spouse u Spouse must be informed of the options and effects of the SBP u Come prepared to make SBP election u Spouse must concur in any election of less than full spouse coverage u Bring all birthdates, marriage date, SSNs for all family members u Election may be changed up to last day of active duty

15 Mandatory Retirement Processing Actions (cont.) u DD Form 2656, Data for Payment of Retired Personnel u EVERY retiring member MUST complete this form PRIOR to their date of retirement u Properly establishes their retired pay account u SBP election / Tax status / Correspondence address / Arrears of pay beneficiary information u Spouse must concur in any election of less than full spouse coverage u Failure to complete DD 2656 prior to retirement establishes automatic full SBP coverage


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