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Counselors urge service members to review SBP before retirement

  • Published
  • By Derrick Harris and Patricia Wittenborn

The Survivor Benefit Plan (SBP) is a voluntary program which provides the survivors of participating retirees a monthly income that starts when the member dies and retired pay stops.

Although some may not be aware of it, automatic SBP spouse coverage became effective Sept. 10, 2001, under the National Defense Authorization Act of 2002. While on active duty, the government provides this protection at no cost to spouses. Before retiring from the Air Force, however, the member must decide whether or not to continue the SBP.

By law, spouses and eligible dependents are protected by maximum SBP coverage after retirement unless the spouse and retiree elect not to enroll in the SBP or elect coverage at a reduced level. However, once the member retires, SBP financial protection will no longer be free. If the member chooses to enroll in the SBP, a monthly premium will be deducted from their Air Force retired pay. The premium cost is 6.5 percent of covered retired pay, or less for some lower levels of coverage. The monthly cost is subject to cost-of-living adjustments (COLAs), but the percentage does not increase.

The amount of SBP annuity a spouse receives at the time of the retiree’s death depends on the level of coverage elected prior to retirement. The level of coverage, or “base amount,” may be as low as $300, but cannot exceed full retired pay. The cost for the coverage is deducted from retired pay until the retiree’s death. The surviving spouse receives 55 percent of the base amount. The value of the annuity increases by COLAs before and after the retiree’s death, keeping up with the effects of inflation. In addition, the SBP allows the member to exclude the spouse and elect child-only coverage.

Although child-only coverage costs less than SBP coverage for the spouse, a child’s eligibility is limited to age 22, unless incapable of self-support. If the retiree dies after the children are age 22, the spouse will not be entitled to receive any payments. The only way to ensure spouse coverage is to select that option.

Because families may be significantly affected financially by their SBP decision, it is important they understand the program. The Air Force strongly encourages members to attend the SBP briefing with their spouses. The SBP briefing is a mandatory briefing for the member, and the DD 2656 is a mandatory checklist item for final out processing.

Members may not have an opportunity to enroll in the SBP after retiring, so the decision before retirement will be final.

Once again, retired pay stops when the retiree dies. The only way the survivor can receive a monthly check from Defense Finance and Accounting Service is through the SBP. The Air Force urges military members and their spouses to carefully weigh the many advantages of the SBP before making a decision.