The Survivor Benefits Program

1. The Survivor Benefits Program PEB Liaison Mr. Dean Trio

2. N/A – Marines will be automatically enrolled in the SBP at transition unless they opt out • Provide basic factual information and discuss the program with Marines and families • Explain each of the SBP election options to Marines and families • Clearly outline the steps needed to opt out of the program • Provide Marine with sufficient information and lead time to make an informed decision • Assist the Marine with finding a Notary Public if necessary • Follow-up on steps to ensure Marine properly executes his or her elections

3. Enabling Learning Objectives • Identify the six possible SBP coverage elections • Define a “base amount” • Describe the basic pros and cons of the program • Describe the impact of a “suspended” SBP coverage • Identify life events that can cause SBP coverage to be suspended or reinstated • Identify all of the circumstances which allow Marines to change SBP elections after retirement • Identify the forms used to make an SBP election • Describe how the SBP and DIC offset works • Identify the elections that a married Marine can make without spousal concurrence • Describe at least three ways that Marines are educated about SBP • Describe the process for making an SBP election • Identify the resources available to help Marines make an informed decision

4. Benefit Profile

5. Provide basic factual information about the program, its benefits and its drawbacks • Encourage the Marine and family to consider carefully when making an election • Ensure Marine completes SBP training through MarineNet and attends Seps/TAPS class • Ensure the Marine and family understand the program if they make a decision that does not appear to be in their best interest • Tell a Marine whether or not it is in his best interest to enroll in the SBP • Referee in the event that the Marine and spouse do not agree on a course of action

6. SBP Process Overview

7. The SBP Election

8. The Challenge • An informed decision on SBP elections must account for the unknown • Ability to change elections after retirement is greatly restricted • Whether the program will “pay-off” depends on several unknown factors including life changes (divorce, remarriage, birth of children) as well which members of the family outlive the Marine and by how long

9. Pros and Cons of SBP Pros Cons • Instead of a lump sum, the benefit is in monthly installments – amount will be greater if death is sooner • Program pays out more than it takes in (net subsidy) • No proof of health required • Changes to election are heavily restricted • In some cases there is no benefit paid • Premium rates assume a max of 30 years of premiums (but medically retired Marines may pay 50!)

10. Multi-Faceted Decision • The SBP Election is more than a simple yes or no. • Marine elects the type of coverage • Spouse Only • Spouse and Child • Child Only • Insurable Interest • Former Spouse • Former Spouse and Child • Marine elects the “base amount” • Minimum is $300 • Maximum is full retired base pay • Benefit will be 55% of “base amount” Note: If the Marine is married at the time of retirement, the spouse must concur with any combination of elections other than: • Spouse Only – full retired base pay, or • Spouse and Child – full retired base pay

11. Note on Premiums • Premiums are not due in any case if: • The Marine is at least 70 years old, and • The Marine has paid at least 30 years of premiums Six SBP Elections Can only be selected if Marine is unmarried and has no dependent children or one dependent child

12. Suspended Status • With certain SBP elections, future life events may result in the SBP being suspended, and possibly reinstated • While SBP is suspended… • No premiums are paid by the Marine • No benefit is paid in the event of the Marine’s death • Suspension events include… • Death of spouse • Divorce of Marine and Spouse • Death or “aging-out” of all children • SBP is reinstated if a new eligible beneficiary is created or the original beneficiary becomes eligible again; reinstatement events include… • Remarriage of Marine (at any age) • Birth (or adoption) of another child Note: Marine is responsible for notifying D-FAS of life events which would suspend or reinstate SBP. Failure to notify always works to the Marine’s detriment – i.e., premiums collected will not be repaid to the Marine; however, benefits will not be paid out even if premiums were collected if there is no eligible beneficiary.

13. Suspension and Reinstatement Events Marine is responsible for notifying DFAS of all relevant life eventsc

14. Cancellation or Conversion of SBP Marine is responsible for notifying DFAS of all relevant life events

15. Calculating the Premiums

16. Calculating the Premium • The amount of the premium will vary significantly based on the SBP election • SCENARIO: Marine is 43, Spouse is 41, children are 13 and 10. He is considering several SBP options and wants to know what his premium would be for a $2000 base amount. RCCs should be careful not to quote exact premiums or benefits as SBP has many nuances; however, this is example is provided to illustrate the wide variation in premium amounts. Marines may be referred to the DoD’s military pay website: http://militarypay.defense.gov/survivor/sbp/index.html

17. DIC Primer Note The surviving family member(s) must apply for DIC, payment is not automatic Challenge Whether the family will ultimately be eligible for DIC is normally uncertain when the SBP election is made

18. SBP/DIC Offset • A family member eligible for both SBP payments and DIC payments will see the SBP offset • DIC is tax exempt so they still come out ahead • Family member is reimbursed for a portion of the SBP premiums paid (essentially turning these premiums into an interest free loan from the Marine to the Government) • However, if the SBP and DIC beneficiaries are different family members, there is no offset • For example, this means that a Marine who is terminally ill, married, and has at least one child must carefully weigh the Spouse and Child vs Child Only SBP options. • Also, if the SBP beneficiary is receiving DIC for a different service member (such as a Former Spouse), there is no offset

19. SBP and TDRL • If the Marine’s final DoD rating when he is transferred to the PDRL differs from the initial rating, this may affect SBP

20. The Election Process

21. Automatic Enrollment • Any Marine who retires is automatically enrolled in the SBP unless he opts out • Marine must decline in writing • If the Marine is married, the spouse must also decline by writing a notarized letter • Marine must opt out before retirement date or he will be in the program until a rare amnesty occurs

22. SBP Election Process Click the box to see a DD 2656 Single? Benefit elections honored Marine educated on SBP Marine makes election on DD 2656 Start Yes No Every Marine who retires (regular retirement, TDRL, or PDRL) must make an SBP Election Electing Spouse or Spouse and Child ? Electing Full Retired Base Pay? • SBP education is conducted through: • Seps/TAPS class • Fact sheets • Discussions with RCC • Mandatory training through Marine Net online DD 2656-1 must also be completed to elect Former Spouse or Former Spouse and Child Yes Yes No No Spouse concurs with Notary? Spouse must sign DD 2656 in front of notary public Yes No Marine enrolled in max SBP If a Marine does not complete the DD 2656, does not fill out the SBP section, or makes an election requiring spouse consent without obtaining it, he will be enrolled in the max benefit

23. Responsibility to Keep D-FAS informed • Failure to keep D-FAS informed of life events and / or mailing address can hurt the Marine • SCENARIO 1: A Marine who elected Spouse only SBP coverage is divorced in January 2013 but he never notifies D-FAS. D-FAS will continue to take premiums out of his retirement pay. However, if the Marine dies, the now Former Spouse will not receive any benefit. • SCENARIO 2: A Marine who elected Spouse Only SBP coverage is divorced in January 2013 and notifies D-FAS. He does not convert to Former Spouse Only so his policy is put into suspended status. He remarries in January 2021 but does not notify DFAS. However, DFAS discovers this in 2025. They will bill him for four years of premiums!

24. Key Points for Marines Eligible for SBP

25. Uninformed Decisions • A Marine makes an SBP election without understanding what he is signing up for • A terminally ill Marine declines SBP because he heard from fellow Marines that is not a good program • A Marine doesn’t realize he needs his wife’s signature to be notarized until the day he is trying to check out • A Marine whose retirement pay is fully offset by VA Disability Compensation doesn’t realize he is receiving SBP until he receives a bill in the mail

26. Resources Basic Resources Advanced Resources Seps/TAPS class SBP is covered DoD Military Pay Website http://militarypay.defense.gov/survivor/sbp/index.html Marine Net SBP Training Mandatory Online Training Wounded Warrior Regiment PEB Liaison Dean Trio 703-432-1856 WWR External Fact Sheet https://ehqmc.usmc.mil/sites/wwr/wrc/External%20Fact%20Slick%20Sheets/Survivor%20Benefit%20Plan%20Slick%20Sheet.pdf WWR Internal Fact Sheet https://ehqmc.usmc.mil/sites/wwr/wrc/Internal%20Slick%20Fact%20Sheets/Survivor%20Benefit%20Plan%20Fact%20Sheet.pdf

27. Sgt Monteith is transferred from active duty to the PDRL Gross Retired Pay of $2000. What is the highest base amount that she can elect for SBP? $300 $1100 $2000 It depends on her DoD disability rating

28. PFC Popovich is married with no children when he is transferred from active duty to the PDRL. Because he never completes the DD Form 2656 properly he is enrolled in the Spouse Only benefit. When will he be able to cancel this election? Anytime within the first 90 days Between the 24th and 36th months of retirement Within 12 months of his divorce, if he divorces his spouse Within 12 months of the birth of his first child, if he has one A and B only B and C only C and D only B, C, and D only None of the above – he can never cancel this election

29. Sgt Cumberstock is about to be transferred to the TDRL. He is currently married (for the first time), and has a total of three children, including one with a previous girlfriend and two with his wife. He wants to open a business with his brother. What elections are available to him? Spouse Only Spouse and Child Child Only Insurable Interest (for the brother) A and B only A, B, and C only B only B and D only All of the above

30. GySgt O’Donnell is in his second marriage when he retires. After retirement he divorces his second wife, remarries and has a child with his third wife. He and his wife then both die in a car crash when their child is 1 year old. Under which scenarios will this child automatically receive SBP benefits? Original election was Former Spouse (1st wife) and Child and this was never terminated Original election was Spouse and Child and no changes were made when he divorced his second wife Original election was Spouse and Child and this was converted to Former Spouse (2nd wife) and Child when he divorced his second wife Original election was Child Only D only B and D only B, C, and D only All of the above None of the above

31. SSgt Jacobs, a married Marine with one child completes the DD Form 2656 electing Child Only with his full retired base pay as the base amount. His wife does not sign the DD Form 2656. In which program is he enrolled? Spouse Only Spouse and Child Child Only He will not be enrolled in any SBP programs

32. PFC Bivens is in the IDES when he is arrested for aggravated assault. He is disenrolled from the IDES and administratively separated from the Marine Corps. Can he enroll in SBP? Yes No

33. PFC Montalvez is transferred to the PDRL at the age of 19. He enrolls in the Spouse and Child SBP program. Assuming he and his 18 year old wife both life to age 90 and never divorce, when will his SBP premiums stop? In 30 years, when he is 49 In 51 years, when he is 70 In 71 years, when he passes away He is too young to enroll in the SBP

34. In which circumstances will SBP be offset? If any family member of the Marine is receiving DIC from the VA for the same deceased Marine If any family member of the Marine is receiving DIC from the VA for any deceased Service Member, including the Marine If the same family member who is eligible to receive SBP is also receiving DIC from the VA for the same deceased Marine If the same family member who is eligible to rececive SBP is also receiving DIC from the VA for any deceased Service Member, including the Marine

35. Cpl Wyatt is married with one child at the time he is transferred to the TDRL. What paperwork will he need to complete in order to elect Spouse Only – full retired pay base amount? The DD Form 2656 (with or without spouse signature) The DD Form 2656 with his spouse’s notarized signature The DD Form 2656-1 A only B only A and C only B and C only

36. 1LT Woodkin elects Spouse and Child coverage when he is transferred from active duty to the PDRL. Three years later he and his wife divorce and the divorce agreement states that he will convert SBP to Former Spouse and Child. However, neither he nor the Former Spouse notify DFAS of the divorce. After three more years he passes away. His Former Spouse has not remarried and his only child is now eight. Who, if anyone, receives SBP? The child The Former Spouse (provided she can find a copy of the divorce agreement) The Marine’s estate Nobody

37. Questions