Survivor Benefits Guide


IMPORTANT!

This guide provides answers to many annuity questions. For specific questions concerning annuities, please write to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000, or call toll-free 1(800)435-3396, or call commercial (303) 676-6552. The toll-free fax number is 1(800)982-8459. Annuitant email questions can be sent to the Denver Center. To expedite handling and ensure a more prompt response, annuitants should include their name and social security number (SSN) as well as the member's name and SSN on all correspondence.

Questions regarding military retirement should be addressed to the Cleveland Center.


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ABBREVIATIONS AND ACRONYMS
 COE Certificate of Eligibility COLA Cost of Living Adjustment DFAS Defense Finance and Accounting Service DFAS-DE DFAS - Denver Center DIC Dependency and Indemnity Compensation DoD Department of Defense FITW Federal Income Tax Withholding FMS Financial Management Services FRB Operations Division - Annuity Pay IVRS Integrated Voice Response System MIW Minimum Income Widow/er PIN Personal Identification Number RCSBP Reserve Component Survivor Benefit Plan RIBLM Retirement Insurance Benefit Limitation ROE Report of Existence RSFPP Retired Serviceman's Family Protection Plan SBP Survivor Benefit Plan SF Standard Form SSA Social Security Administration SSO Social Security Offset SSBP Supplemental Survivor Benefit Plan SSN Social Security Number TD Treasury Department U.S.C. United States Code VA Veterans Affairs VSI Voluntary Separation Incentive

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CUSTOMER SERVICE

If you have questions concerning your annuity, please write to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000, or call toll free 1(800)435-3396. To expedite handling and ensure a prompt response, include the name and social security number of both the annuitant and the deceased military member on all correspondence, including faxes.

Our toll-free telephone service includes an Integrated Voice Response System (IVRS) which allows access to information about the annuity account 24 hours a day, 7 days a week. All you need is the annuitant's social security number and a personal identification number (PIN), which the annuitant or authorized representative establishes when calling the first time. Step-by-step instructions are given when you call the IVRS; however, for your information, the following are the menu options you will hear when you call:

MAIN MENU

  • For instructions on using this system, press star 1.
  • For general information about pay dates and our mailing address, press 1.
  • To report the death of an annuitant, press 2.
  • For information about your pay account, press 3.
  • To speak to a teleservice representative, press 0 at any time.
  • To hear these options again, press 7.
  • To exit, press 8.
  • If you select "for information about your pay account," option you will hear the following menu options:
    • To verify nonreceipt of your pay, press 1.
    • To verify your check mailing or correspondence address, press 2.
    • To access your pay account, press 3.
    • To request publications or forms, press 4.
    • To request reissue of your 1099R tax statement, press 5.
    • To speak to a teleservice representative, press 0.
    • To repeat these options, press 7.
    • To exit, press 8.
    • To return to the main menu, press 9.
  • If you select "access pay account," option you will hear the following menu options:
    • To hear information on current month pay, press 1.
    • For year-to-date pay and tax status, press 2.
    • For social security offset, press 3.
    • For Dependency Indemnity Compensation, press 4.
    • For Report of Existence or Certificate of Eligibility, press 5.
    • For information on how marriage or divorce will affect your pay, press 6.
    • To hear these options again, press 7.
    • To return to the previous menu, press 9.
    • If you'd like to speak to a teleservice representative, press 0.
    • To exit, press 8.
It's your responsibility to notify us of any change in status that affects the annuity and to provide the proper documentation.

We are committed to providing you, our customer, with responsive, high quality, courteous service. If you have any comments to make about the service you receive, please write to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000. We will use this information to improve our service and to reward those providing exceptional service.

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SURVIVOR BENEFIT PLAN (SBP) ANNUITY FOR SPOUSE BENEFICIARY

COMPUTATION OF THE SBP ANNUITY: The Department of Defense Authorization Act (Public Law 99-145, November 8, 1985) implemented March 1, 1986, established a two-tiered benefit system for computing the gross SBP annuity from the elected annuity base amount. The major provisions of the system are:

  1. UNDER AGE 62: If you are under age 62, you will receive 55 percent of the SBP annuity base amount.
  2. AGE 62 OR OLDER: If you are age 62 or older, the gross SBP annuity is recomputed as follows:
    1. MEMBER ELIGIBLE TO RETIRE BEFORE OCTOBER 2, 1985: If the member was eligible to retire before October 2, 1985, the annuity is computed in the following manner, and the annuitant receives the more favorable amount:
      1. Fifty-five percent of the SBP annuity base amount less the social security offset (SSO), or
      2. Thirty-five percent of the SBP annuity base amount.

      NOTE: See c (1) below.

    2. MEMBER ELIGIBLE TO RETIRE ON OR AFTER OCTOBER 2, 1985: If the member was eligible to retire on or after October 2, 1985, the gross SBP annuity is 35 percent of the SBP annuity base amount.
    3. GLENN BILL: Spouse or ex-spouse annuitants (who are under spouse coverage) whose benefactor elected into the Supplemental SBP effective April 1, 1992, under Public Law 101-189 and Public Law 102-190.
      1. If a retired member elected into the Supplemental SBP (SSBP), the right to have the annuity computed under the social security offset method of computation is waived, regardless of whether or not it may be more beneficial to the annuitant.
      2. The annuity which is at 55 percent of the base amount elected by the member, plus cost of living adjustments (COLA), is recalculated at the date you reach age 62. You will receive 35 percent of the annuity base amount (plus COLAs). You will also receive an additional percentage of the annuity base amount as elected by the member (plus COLAs). The percentage is a minimum of 5 to a maximum of 20 in increments of 5.
      3. If you are entitled to Dependency and Indemnity Compensation (DIC), the offset is from the 35 percent annuity amount. If the DIC exceeds the 35 percent SBP amount, you will receive the supplemental SBP in whatever increment was elected.
      4. An open season election becomes void if the member dies before the end of the 2-year survival period beginning on the cost effective date, with the exception of members who make an open enrollment election for a spouse and that spouse was entitled, before November 1, 1990, to receive dependency and indemnity compensation based on a previous marriage to another member. If the open season election is void, the member's election would revert to any previously established coverage.
RESERVE COMPONENT SURVIVOR BENEFIT PLAN (RCSBP): RCSBP annuitants receive less than 55 percent or 35 percent of the elected RCSBP annuity base amount because costs for the coverage are required to be deducted from the annuity. Reserve member's do not pay cost premiums until reaching age 60, and not at all if death occurs prior to age 60.

FEDERAL INCOME TAX WITHHOLDING (FITW): The SBP annuity is taxable, and the FITW law requires that income tax be withheld. Unless you elect otherwise, the amount of taxes withheld will be as if you were a married individual claiming three exemptions. If you want your FITW changed at a later date, you must complete a new Treasury Department (TD) Form W-4P, Withholding Certificate for Pension or Annuity Payments, showing the changes. You may get a TD Form W-4P from your post office, Integrated Voice Response System (IVRS), Internet or the Internal Revenue Service (IRS). The Defense Finance and Accounting Service - Denver Center will mail you a TD Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., at the end of each year for tax reporting purposes.

STATE INCOME TAX WITHOLDING (SITW): State income tax cannot be withheld from an annuity at this time.

ALIEN TAX WITHHELD: Nonresident aliens are taxed automatically at the rate of 30 percent, unless there is a tax treaty between the United States and the foreign country permitting a lesser rate. If the country you live in has a tax treaty with the United States, you should complete a TD Form 1001, Ownership, Exemption, or Reduced Rate Certificate showing the country in which you live. You may obtain a TD Form 1001 from any United States Internal Revenue Service (IRS) office, the Internet, American consulate office, or by writing DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000 . The Defense Finance and Accounting Service - Denver Center will mail you a TD Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, at the end of each year for tax reporting purposes.

CERTIFICATE OF ELIGIBILITY (COE): A COE will be sent to you each year prior to your birthday. Complete and return the COE promptly so we can continue your annuity without interruption. If the COE is not returned within 90 days, your account will be suspended. Please read the instructions on the COE and make sure you have completed it correctly. Sign and date the form, and send it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000.

REPORT OF EXISTENCE (ROE): If you are a natural interest annuitant or if you receive your annuity payment through foreign postal channels, the ROE will be sent to you each year prior to your birthday. Complete and return the ROE promptly so we can continue your annuity without interruption. If the ROE is not returned within 90 days, your account will be suspended. Please read the instructions on the form and make sure you have completed it correctly. Sign and date the ROE and send it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000.

ROE FOR INCAPACITATED ANNUITANTS: If the annuitant is incapacitated and can't manage his or her own financial affairs, either a guardian must be appointed by the court, or under the provisions of 10 United States Code (U.S.C.), Section 1455, a Representative Payee can be appointed. For further information on appointing a Representative Payee, write to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000. An ROE is sent semi-annually to an annuitant who has a guardian receiving his or her funds. The annuity is not released until the ROE is returned to DFAS-DE/FRB.

ACCEPTABLE SIGNATURES: COEs, ROEs, and address changes may be signed:

  1. By the annuitant.
  2. By a natural parent who is the custodian of a minor child annuitant.
  3. By the legal guardian or representative of the annuitant. Court documents must be on file at the Defense Finance and Accounting Service - Denver Center.
  4. By the representative payee of the annuitant.
  5. By the annuitant's "X." This must be witnessed by two disinterested persons. Family members are not authorized to witness the annuitant's "X."
  6. By an agent acting under a power of attorney. The power of attorney document must be on file at the Defense Finance and Accounting Service Denver Center.

REMARRIAGE OF ANNUITANTS BEFORE AGE 55: Your SBP annuity stops the first of the month in which you remarry. Please notify us promptly to prevent an overpayment of the annuity. If your marriage ends by death, divorce, or annulment, we will reinstate the SBP annuity when you provide documents verifying the marriage was terminated.

REMARRIAGE OF ANNUITANTS AFTER AGE 55: Your SBP annuity will continue to pay without interruption if you remarry. However, you should send us a copy of the marriage certificate with instructions for name and address changes. If your SBP annuity was reduced by Dependency and Indemnity Compensation (DIC), we will restore the full SBP annuity amount after the Department of Veterans Affairs (VA) provides us with the date your DIC terminated. If a refund of SBP costs was made to you, the total refund of cost must be repaid. The amount due may be repaid in either a lump sum or in installments. If repayment is in installments, the installment payments will be deducted from the SBP annuity payable. The deductions will be 50 percent of the DIC amount or 50 percent of the gross annuity, whichever is less. Your taxable income will be reduced by the amount applied to your debt.

CHILDREN'S ENTITLEMENT: If the member elected coverage for spouse and children, the full amount of the annuity is payable to you for as long as you remain eligible. If you are no longer eligible because of remarriage or death, the eligible children of the member are entitled to the full SBP annuity, which would be divided equally among the eligible children. For this reason, you should notify us immediately of the death or marriage before age 22 of any potential child annuitant.

ACCOUNT STATEMENTS: Following approval of your application, you will receive an account statement showing the amount of annuity payable. A statement will be issued each time your annuity account changes and will state the reason for the change.

CHANGE OF ADDRESS: It is very important that you keep us informed of any change in your mailing address. This is necessary so we can send your account statements and other pertinent information.

FEDERAL ESTATE TAX: The value of the annuity at the time of the member's death may be subject to Federal estate tax under certain circumstances. Please call your local Internal Revenue Service Office for information concerning the amount of annuity that may be subject to the tax.

SOCIAL SECURITY NUMBER (SSN): If you have not already done so, please send us your SSN as soon as possible. If you do not have a SSN and you are a resident of the United States, you may obtain one from the Social Security Administration office nearest you.

For information on Direct deposit see 'Direct Deposit'.

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RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN (RSFPP)ANNUITY - SPOUSE BENEFICIARY

REMARRIAGE OF ANNUITANTS BEFORE AGE 60: Your RSFPP annuity ceases the first of the month in which you remarry. Please notify us promptly to prevent an overpayment of the annuity. If your marriage is terminated by death or divorce, the annuity cannot be reinstated. We will reinstate your RSFPP annuity only if you furnish documents verifying the annulment of a "void" marriage.

REMARRIAGE OF ANNUITANTS AFTER AGE 60: Your RSFPP annuity will continue to pay without interruption if you remarry. However, you should send us a copy of the marriage certificate with instructions for name and address changes.

CHILDREN'S ENTITLEMENT: If the member elected coverage for spouse and children, the full amount of the annuity is payable to you for as long as you remain eligible. If you are no longer eligible because of your remarriage or death, the eligible children of the member are entitled to the full RSFPP annuity, which would be divided equally among the eligible children. For this reason, you should notify us immediately of the death or marriage before age 23 of any potential child annuitant.

For information on Direct deposit see 'Direct Deposit'.

For further information on taxability, change of address, account statements, social security numbers, etc., see the SBP for Spouse Beneficiary.

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SOCIAL SECURITY OFFSET (SSO)

CONGRESSIONAL RULING ON SSO: When Congress was considering the SBP law, they recognized that in most instances the survivor would receive benefits far exceeding any amount paid by the member to provide survivor coverage under SBP and social security. Since benefits received in excess of the cost to the member are paid by the U.S. Government, Congress ruled that the survivor could not receive the full entitlement for both social security and SBP. Therefore, Congress ruled that the amount of the social security benefit be deducted (offset) from the monthly SBP annuity payment once the annuitant reaches age 62.

ENTITLEMENT TO SOCIAL SECURITY BENEFITS IS BASED ON YOUR SPOUSE'S LIFETIME EARNINGS: If you are entitled to benefits on the member's social security account, even though you may not be receiving them, we are required by law to offset the annuity. If you are not entitled to benefits on the member's social security account, we must have written verification from the Social Security Administration(SSA) before we can stop the offset.

COMPUTING THE OFFSET: The actual computation of the SSO is based on the member's ACTIVE DUTY MILITARY EARNINGS ONLY from January 1, 1957, through the date of retirement or date of death, whichever occurs first. CIVILIAN earnings or the social security benefits you have earned in your own right are NOT considered in computing SSO.

MAXIMUM OFFSET: The offset cannot exceed 40 percent of the adjusted gross SBP annuity. The adjusted gross annuity is the gross SBP less Dependency and Indemnity Compensation (DIC), if applicable.

COMPUTATION OF THE SBP ANNUITY: The Department of Defense Authorization Act (Public Law 99-145, November 8, 1985) implemented March 1, 1986, established a two-tiered benefit system for computing the gross SBP annuity from the elected annuity base amount. The major provisions of the system are:

  1. UNDER AGE 62: If you are under age 62, you will receive 55 percent of the SBP annuity base amount.
  2. AGE 62 OR OLDER: If you are age 62 or older, the gross SBP annuity is recomputed as follows:
    1. MEMBER ELIGIBLE TO RETIRE BEFORE OCTOBER 2, 1985: If the member was eligible to retire before October 2, 1985, the annuity is computed in the following manner, and the annuitant receives the more favorable amount:
      1. Fifty-five percent of the SBP annuity base amount less the SSO, or
      2. Thirty-five percent of the SBP annuity base amount.
    2. MEMBER ELIGIBLE TO RETIRE ON OR AFTER OCTOBER 2, 1985: If the member was eligible to retire on or after October 2, 1985, the gross SBP annuity is 35 percent of the SBP annuity base amount.

THE EFFECT OF COST OF LIVING ADJUSTMENTS (COLAs) TO THE OFFSET:

  1. Maximum Offset: If the SBP annuity is offset by the full 40 percent, the offset will increase when the SBP annuity increases due to a COLA. It will also decrease if DIC increases.
  2. Less Than 40 Percent Offset: If the SBP annuity is offset by less than the 40 percent, the offset increases each time there is a COLA to social security benefits; it does not increase when the SBP annuity increases or when the DIC changes.

IF THE SOCIAL SECURITY BENEFIT YOU RECEIVE IS BASED ON YOUR OWN EARNINGS: We must offset your annuity if you are entitled to social security benefits on the member's account even though the benefits, or a portion of the benefits, are based on your own earnings.

IF YOU HAVEN'T APPLIED FOR SOCIAL SECURITY BENEFITS: We must offset your annuity if you are entitled to social security benefits on the member's account even though you have not applied for the benefits. (As an exception, see the next paragraph.)

WORKING WIDOW/ER - BENEFITS REDUCED BECAUSE OF EARNINGS: If you are working and are not entitled to social security benefits, or you are receiving reduced benefits because of your earnings, we can suspend or reduce the SSO. We must have verification from the SSA, as explained below, before we can adjust your account.

WHEN THE OFFSET FROM THE ANNUITY EXCEEDS THE SOCIAL SECURITY BENEFIT: Conditions that may cause the offset from the annuity to exceed the social security benefit are listed below, followed by instructions for reducing the social security offset when this occurs:

  1. If you are in receipt of a Government pension, your social security benefits may be reduced.
  2. If your spouse received non-disability retirement benefits before age 65, your social security benefits may be reduced because of the Retirement Insurance Benefit Limitation (RIBLM).

TO PREVENT OR REDUCE THE OFFSET: Defense Finance and Accounting Service- Denver Center (DFAS-DE) sends the annuitant a DFAS-DE Form 2203, 60 days prior to the annuitant's 62 birthdate. The DFAS-DE Form 2203 must be completed by the SSA, and mailed to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000 to prevent or reduce the Social Security Offset.

  1. If you aren't entitled to benefits on the member's account, contact SSA for a written statement that you are not entitled to social security benefits, the period of non-entitlement, and the reason you aren't entitled. (It is not sufficient to state that you aren't receiving benefits we must know the reason you aren't receiving them.)

  2. If your benefits are reduced or stopped because of your earnings, contact the SSA for a written statement that you are receiving reduced benefits; include the reason for the reduction; the total benefits before and after the reduction; and the period covered. If your SSO is reduced or stopped (because of earnings), you must get a recertification from the SSA each year, and send it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver, CO 80279-6000, before April 1. If we don't receive the recertification, we will automatically restart full SSO retroactive to January 1 of that year.

  3. If your social security benefits were reduced due to receipt of Government pension, contact the SSA for a written statement that includes the full social security benefit amount, the reduced social security benefit amount, and the effective dates of those benefits.

  4. If your social security benefits were reduced due to RIBLM, contact the SSA for a written statement that you are receiving reduced benefits and have them provide the effective date of non-disability benefits paid to your spouse.

ADJUSTMENTS TO SSO: When we receive the statement from the SSA, we will determine if we can adjust the SSO. If we reduce or stop SSO, you will receive a refund based on the period covered in the SSA statement. If we receive documentation indicating that we must retroactively start the offset, we will start the offset and collect any debt owed from your SBP annuity.

YOUR RESPONSIBILITIES: It is your responsibility to notify us of any change that affects the SSO.

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DEPENDENCY AND INDEMNITY COMPENSATION (DIC)

The VA determines entitlement to and the amount of the DIC award. If DIC is awarded, the SBP annuity must be reduced by the amount of the DIC award. The SBP annuity is terminated if the DIC is greater than the SBP. However, if an annuitant receives DIC based on a member other than the one providing SBP, there will not be a DIC reduction.

Based on the DIC authorization you signed, your SBP annuity is established prior to notification from the VA concerning your entitlement to DIC to prevent delay in your annuity payments.

GLENN BILL: Under Public Law 101-189 and Public Law 102-190, effective April 1, 1992, if your benefactor elected Supplemental SBP, your annuity amount would be 35 percent of the annuity base amount plus an additional percentage of the annuity base amount as elected by the member. If your DIC exceeds the 35 percent SBP amount, you will receive the supplemental SBP in whatever increment was elected. If you are awarded DIC, the following conditions apply:

  1. If your DIC monthly benefit exceeds your SBP monthly annuity, the amount of your SBP annuity paid prior to notification of your DIC award, not including the month of death, is an overpayment. If the DIC monthly benefit does not exceed the SBP monthly annuity, the amount of SBP overpayment will be the monthly amount of DIC awarded prior to notification. See number 3 for more information on overpayments.

  2. Once we receive all of the necessary information from the VA, you will be due a refund of all or part of the SBP costs paid into the plan by the member (SBP cost refund). The SBP cost refund will be applied to any SBP overpayment or other indebtedness, and a check for the remaining balance, if any, will be forwarded to you. The SBP cost refund is fully taxable and will be included as taxable income on the TD Form 1099-R you will receive at the end of the year.

  3. Depending on the amount of the overpayment, it will either be collected from the SBP cost refund, referred to the VA for collection from your DIC, or a combination of both. You will be advised of the method of collection and sent an account statement showing the SBP cost refund less any over payment collected when the SBP cost refund is processed. Your taxable income will be increased by the amount of your cost refund and reduced by the amount applied to your overpayment. Your taxable income will be adjusted when the overpayment is collected. You will receive a tax credit letter if your DIC and the overpayment is collected after the tax year in which the overpayment occurred.

  4. Since SBP costs aren't paid by members who die while on active duty, or by Reservists who die before retirement, there will be no refund of costs. The overpayment will be referred to the VA for collection from your DIC.

  5. You can reduce the amount of the SBP overpayment by notifying us at once when the VA has awarded you DIC. Please furnish us a copy of the award letter from the VA.

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SURVIVOR BENEFIT PLAN ANNUITY CHILD BENEFICIARY

REQUIREMENTS FOR ELIGIBILITY: The child annuitant must meet the following requirements to be eligible for the SBP annuity:

  1. The child must have been the member's dependent at the time of death. If there is an unborn child of the member, the annuity is payable to that child effective the month in which the child is born.
  2. The child must either be under age 18 and unmarried, or between ages 18 and 22, unmarried, and a full-time student at a recognized educational institution.
    1. A child is considered a full-time student between school terms if the break is not more than 150 days and the child intends to continue school full time immediately following the break.
    2. When a child attends school full time and the child's birthday is between September 1 and June 30, entitlement stops July 1 following the 22nd birthday. Otherwise, if the child's birthday is in July or August, the annuity stops the first of the month in which the annuitant reaches age 22.
    3. Entitlement to the annuity stops effective the first day of the month in which a child reaches age 22, leaves school, is less than a full time student (between ages 18 and 22), or marries, whichever occurs first. If a child annuitant marries (at any age) or leaves school, or is less than full time student (between ages 18 and 22), it is his/her responsibility to notify DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000, immediately to prevent an overpayment.

INCAPACITATED CHILDREN: The SBP annuity is payable to an unmarried, incapacitated child over age 18 as follows:

  1. The child must be incapable of self support because of a physical or mental disability which existed before the 18th birthday or was incurred before age 22 while pursuing a full-time course of study.
  2. The incapacity must be substantiated by a current medical report.
  3. If the medical report certifies that the disability is permanent, the annuity is payable for the lifetime of the annuitant.
  4. If the disability is not permanent, medical certification must be sent every 2 years for continuous annuity payments.
  5. If the annuitant recovers from the incapacity and becomes capable of self support, the annuity is stopped.
  6. If the annuitant is unable to manage his or her financial affairs, either a guardian must be appointed by the court, and guardianship documents must be forwarded to us before the annuity can be paid, or under the provisions of 10 U.S.C., Section 1455, Representative Payee can be appointed. For further information on appointing a Representative Payee, write to DFAS-DE/FRB, 6760 E. Irvington Place, Denver, CO 80279-6000 or call toll free 1(800)435-3396.
DISTRIBUTION OF ANNUITY PAYMENTS: When children are named as the beneficiaries of an SBP annuity, the annuity is distributed as follows:
  1. If there is only one surviving eligible child, the full amount of the annuity is paid to the child.
  2. If there are two or more surviving eligible children, the annuity is paid in equal shares. As each child becomes ineligible, his/her share is paid in equal portions to the remaining eligible children. When there are no longer any eligible children, the SBP annuity is stopped.
  3. The annuity is payable to the custodian, guardian, or Representative Payee of minor children. The custodian must be a natural or adoptive parent of the children. The annuity will pay directly to the child annuitant when the child is considered an adult according to the laws of the state of residence (age of majority).
CERTIFICATE OF ELIGIBILITY (COE): A COE will be sent to you each year prior to your birthday. Complete and return the COE promptly so we can continue your annuity without interruption. If the COE is not returned within 90 days, your account will be suspended. Please read the instructions on the form and make sure you have completed it correctly. Sign and date the form and send it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000. We cannot accept the signature of a custodian unless the child is under the age of majority. If the child is over the age of majority, he/she must sign the COE. If an incapacitated child is over the age of 18 and is unable to handle his/her own financial affairs, the legal representative must sign the COE.

REPORT OF EXISTENCE (ROE): If an incapacitated child is over the age of 18 and is incapable of handling his/her financial affairs, an ROE is sent annually to verify existence. The legal representative must sign the form and return it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000, before payments can be released.

SCHOOL CERTIFICATION: Child annuitants over age 18 (and not incapacitated) must be full-time students to continue receiving annuity payments. A school certification form is sent before the annuitant reaches age 18; thereafter, the form is sent before the end of each school term to verify past attendance and future intent to continue school. If the school certification form is not returned before the date the school term ends (or by the month of the 18th birthday), the annuity is suspended pending school certification. If the child no longer is a full-time student, the annuity is reapportioned to the other eligible children. Please ensure the school certification is properly completed and promptly returned to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000, to prevent payment interruption.

CERTIFICATION REQUIREMENTS TO CONTINUE ANNUITY PAYMENTS: It's your responsibility to ensure that we get the information needed to continue or stop annuity payments. Send all documentation to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000.

YOUR RESPONSIBILITIES: It is your responsibility to notify us of any change that affects annuity payments. For further information on taxability, change of address, account statements, and social security numbers, see the SBP for Spouse Beneficiary.

For information on Direct Deposit see 'Direct Deposit'.

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RETIRED SERVICEMAN'S FAMILY PROTECTION PLAN (RSFPP) ANNUITY - CHILD BENEFICIARY

REQUIREMENTS FOR ELIGIBILITY: The child annuitant must meet the following requirements to be eligible for the RSFPP annuity:

  1. The child must have been born before the member retired.
  2. The child must either be under age 18 and unmarried, or between the ages 18 and 23, unmarried, and a full-time student at a recognized educational institution.
    1. A child is considered a full-time student between school terms if the break is not more than 150 days and the child intends to continue school immediately following the break.
    2. Entitlement to the RSFPP annuity stops on the first day of the month in which a child reaches age 23, leaves school (between ages 18 and 23), or marries, whichever occurs first.
    3. If a child annuitant marries at any age or leaves school between ages 18 and 23, it is his/her responsibility to notify DFAS-DE/FRB immediately to prevent an overpayment.
INCAPACITATED CHILDREN: The RSFPP annuity is payable to an unmarried incapacitated child over age 18 as follows:
  1. The child must be incapable of self support because of a physical or mental disability which existed before the 18th birthday.
  2. The child must remain unmarried.
  3. The incapacity must be substantiated by a current medical report.
  4. If the medical report certifies the disability is permanent, the annuity is payable for the lifetime of the annuitant.
  5. If the disability is not permanent, medical certification must be sent every 2 years for continuous annuity payments.
  6. If the annuitant recovers from the incapacity and becomes capable of self support, the annuity is stopped.
  7. If the annuitant is unable to manage his or her financial affairs, either a guardian must be appointed by the court, and guardianship documents must be forwarded to us before the annuity can be paid, or under 10 U.S.C. Section 1455, a Representative Payee can be appointed. For further information on appointing a Representative Payee, write to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000.

DISTRIBUTION OF ANNUITY PAYMENTS: When children are named as the beneficiaries of an RSFPP annuity, the annuity is distributed as follows:

  1. If there is only one surviving eligible child, the full amount of the annuity is paid to that child.
  2. If there are two or more surviving eligible children, the annuity is paid in equal shares. As each child becomes ineligible, his/her share is paid in equal portions to the remaining eligible children. When there are no longer any eligible children, the RSFPP annuity is stopped.
  3. The annuity is payable to the custodian, guardian, or Representative Payee of minor children. The custodian must be a natural or adoptive parent of the children. The annuity will pay directly to the child annuitant when the child is considered an adult according to the laws of the state of residence (age of majority).

CERTIFICATE OF ELIGIBILITY (COE): A COE will be sent to you each year prior to your birthday. Complete and return the COE promptly so we can continue your annuity without interruption. If the COE is not returned within 90 days, your account will be suspended. Please read the instructions on the form and make sure you have completed it correctly. Sign and date the form and send it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000. We cannot accept the signature of a custodian unless the child is under the age of majority. If an incapacitated child is over the age of 18 and is unable to handle his/her own financial affairs, the legal representative must sign the COE. If the child is over the age of majority, he/she must sign the COE.

REPORT OF EXISTENCE (ROE): If an incapacitated child is over the age of 18 and is incapable of handling his/her financial affairs, an ROE is sent annually to verify existence. The guardian must sign the form and return it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000, before payments can be released.

SCHOOL CERTIFICATION: Child annuitants over age 18 (and not incapacitated) must be full-time students to continue receiving annuity payments. A school certification form is sent before the annuitant reaches age 18; thereafter, the form is sent before the end of each school term to verify past attendance and future intent to continue school. If the school certification form is not returned before the date the school term ends (or by the month of the 18th birthday), the annuity is suspended pending school certification. If the child is no longer a full-time student, the annuity is reapportioned to the other eligible children. Please ensure the school certification is properly completed and promptly returned to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000, to prevent payment interruption.

CERTIFICATION REQUIREMENTS TO CONTINUE ANNUITY PAYMENTS: It is your responsibility to ensure that we get the information needed to continue or stop annuity payments. Send all documentation to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000.

YOUR RESPONSIBILITIES: It is your responsibility to notify us of any change that affects annuity payments.

For information on Direct Deposit see 'Direct Deposit'.

For further information on taxability, change of address, account statements, and social security numbers, see the SBP for Spouse Beneficiary.

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SURVIVOR BENEFIT MINIMUM INCOME WIDOW/ER (MIW) ANNUITY

The SBP was amended by Public Law 95-588, January 1, 1979, to provide for a guaranteed minimum income for surviving spouses of military retirees who did not participate in the plan and who died prior to September 21, 1973.

CONDITIONS FOR CONTINUED RECEIPT OF THE ANNUITY:

  1. You must be entitled to a widow/er's pension from the Department of Veterans Affairs (VA).
  2. You must remain unmarried. Remarriage stops your entitlement to any further annuity payment even if the remarriage ends by death or divorce. If the remarriage is annulled, the annulment documents should be sent to our office for a determination of possible reinstatement of your annuity.
  3. Your income from all sources must remain below the maximum income level in effect during any earning period.

ADJUSTMENT TO ANNUITY PAYMENTS: Your MIW annuity payments will be adjusted as follows, according to the law under which you are entitled to a VA pension:

  1. If you receive a VA pension under the "old" law, section 306, your income from other sources will be frozen at the amount you reported to the VA in December 1978. The annuity will be adjusted by the changes in the maximum income level established by law.
  2. If you elect VA pension under the "new" law, PL 95-588, your income for VA purposes will change based on the other income reported to the VA each year, and your MIW annuity will be adjusted accordingly.

For information on Direct Deposit see 'Direct Deposit'.

For further information on taxability, change of address, account statements, social security numbers, etc., see SBP for Spouse Beneficiary.

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"FORGOTTEN WIDOWS" SURVIVOR BENEFIT PLAN

The SBP was amended by Public Law 96-402, October 9, 1980, to provide payment of an annuity to a widow/er of a member of the military service who died on active duty before September 21, 1972, and who was eligible for retirement at death.

OFFSETS TO THE ANNUITY: Refer to Dependency and Indeminity Compensation (DIC) for more information on DIC. Refer to Social Security Offset (SSO) for more information on SSO.

In addition SBP was amended by Public Law 105-85, November 18, 1997, to allow for an annuity for certain Military Surviving Spouses of members who:

  1. Died before March 21, 1974, and was entitled to retired or retainer pay on the date of death;

    or

  2. Was a member of the Reserve Component Armed Forces during the period beginning on September 21, 1972, and ending on October 1, 1978, and at the time of the military member's death would have been entitled to retired pay under chapter 67 of title 10, United States Code (as in effect before December 1, 1994,), but for the fact that he/she was under 60 years of age.

  3. A qualified surviving spouse for purposes of this section is a spouse who has not remarried and who is not eligible for an annuity under section 4 of Public Law 92-425 (10 U.S.C. 1448 note) (MIW).

    The amount of annuity payable will be $165.00 per month and adjusted by cost of living increase (COLI) at the same time and by the same percentage, as retired pay.

    The authority to pay these annuitants expires on September 30, 2001.

    A claim is required. No benefits shall be paid to any person under this act unless a claim for such benefit is filed with the Secretary by or on behalf of such person.

    OFFSETS TO THE ANNUITY: Refer to Dependency and Indeminity Compensation (DIC) for more information on DIC.

    For information on Direct Deposit see 'Direct Deposit'.

    For further information on taxability, change of address, account statements, social security numbers, etc., see the SBP for Spouse Beneficiary.

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    SURVIVOR BENEFIT PLAN (SBP) ANNUITY FOR "FORMER SPOUSE AND NATURAL INTEREST PERSON" BENEFICIARIES

    FORMER SPOUSE BENEFICIARIES: Former spouse elections made after March 1, 1986, are paid under the spouse category. Social Security offset is applicable to these annuities. A former spouse is eligible for SBP if they were the member's former spouse when the member became eligible to participate in SBP and the member elected them as beneficiary. If the member elects spouse or spouse and child coverage at date of eligibility and subsequently becomes divorced, the member or the former spouse have one year from the date of divorce to change the election to former spouse coverage. The former spouse can deem the election if it was in the divorce decree, this must be done within 1 year of the divorce decree.

    NOTE: SBP coverage for spouse is not specific for an individual. Coverage does not continue for a spouse who subsequently becomes a former spouse unless the election is changed to former spouse.

    Former spouse elections made prior to March 1, 1986, are paid under the natural interest person category. Coverage for children is not available if the former spouse is paid under the natural interest person category.

    NATURAL INTEREST PERSON BENEFICIARIES: Elections for natural interest persons may be made when the member has no spouse or dependent children and the person has a reasonable and lawful expectation of monetary benefit from the life of the member. A member who is not married but has a dependent child may elect SBP coverage for that child under the natural interest person category. This type of SBP annuity election is made for a specific individual and is not transferable to another person. The annuity amount payable is 55% of the member's gross retired pay at death, less cost. The SBP annuity is not subject to Social Security Offset and the Natural Interest Person can be married or marry at any age. The annuity does not terminate until death of the annuitant.

    For information on Direct Deposit see 'Direct Deposit'.

    For further information on taxability, change of address, account statements, social security numbers, etc., see the SBP for Spouse Beneficiary.

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    "VOLUNTARY SEPARATION INCENTIVE" (VSI)

    Public Law 102-190, December 5, 1991, established the Voluntary Separation Incentive (VSI) program. The VSI program is a special separation benefit program offered to certain mid-career service members of the Armed Forces in overstrength inventories to encourage the members to leave active duty voluntarily.

    The service member may designate beneficiaries to receive VSI installments which remain unpaid after the member's death. This program allows for VSI payments to beneficiaries in the event of the member's death.

    Designations are made on the VSI Beneficiary Designation Form, DFAS-CL 1900/2. The member may designate different percentages to be received by multiple recipients. In the event the member does not make a percentage election, the payments will be divided equally among the designated beneficiaries.

    Notification of a service member's death is sent to DFAS-CL/FRCBC, 1240 EAST 9TH Street, Cleveland, OH 44199, the death certificate can be FAXed to (216) 522-6082. Upon receipt of proper notification and proof of death, DFAS-CL closes out the member's active VSI account and transfers it to DFAS-DE/FRB, 6760 E. Irvington Place, Denver, CO 80279-6000 for beneficiary payment.

    DFAS-DE will notify the beneficiaries of their entitlement to the member's future VSI payments. A claim from the beneficiaries must be received by DFAS-DE/FRB, 6760 E. Irvington Place, Denver, CO 80279-6000 before any payments can be made. Beneficiary payments will be made in annual installments. Payment of the remaining VSI installments will be made by DFAS-DE to the designated beneficiaries.

    If a valid designation was not made or received, payments will be distributed in accordance with the order of precedence contained in 10 U.S.C. 2771.

    Annual payments will be paid to the beneficiaries on the anniversary date of the member's separation for the remainder of the member's VSI entitlement period. A beneficiary who dies after the member's date of death will have their portion of the VSI annual payment distributed to the beneficiaries estate. Such payments will be made in accordance with the laws governing the beneficiary's state of legal residence.

    For further information on taxability, change of address, social security numbers, etc., see the 'Survivor Benefit Plan (SBP) Annuity for Spouse Beneficiary'.

    For information on Direct Deposit see 'Direct Deposit'.

    A Report of Existence (ROE) will be sent annually to each beneficiary to ensure the existence of all beneficiary recipients. To ensure continued payments the ROE must be promptly returned to DFAS-DE/FRB, 6760 E. Irvington Place, Denver, CO 80279-6000.

    Voluntary Separation Incentive (VSI) beneficiary payments are not subject to Garnishment.

    Voluntary Separation Incentive (VSI) beneficiary payments are not subject to offset.

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    "DIRECT DEPOSIT"

    In conjunction with the Debt Collection Act of 1996, Public Law 104-134, dated April 26, 1996, The Defense Finance and Accounting Service - Denver Center (DFAS-DE) strongly urge all annuitants and Voluntary Separation Incentive (VSI) beneficiaries living in the United States to participate in the Electronic Funds Transfer (EFT) program for their annuity or beneficiary payments.

    Direct deposit of payments through EFT is safer, more secure, and, for most recipients, more convenient than receiving hard copy checks. The FASTSTART Form FMS 2231, Direct Deposit Authorization Form DD 2762, or the Direct Deposit Standard Form SF 1199A, make the direct deposit application process very easy. Annuitants and VSI beneficiaries provide their name, address and account information on the form and attach a voided check. Forms can be obtained from financial institutions or by writing or calling DFAS-DE/FRB. Annuitants and VSI beneficiaries can request a form twenty-four hours a day, seven days a week, by requesting it from the Integrated Voice Response System (IVRS) or from the World Wide Web. If an annuitant or VSI beneficiary need assistance in completing the form, our customer service representatives can assist them at 1 (800) 435-3396 (toll free) or commercial (303) 676-6552 during business hours, 6:30 a.m. to 4:30 p.m. mountain standard time.

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    WHAT TO DO WHEN THE ANNUITANT OR BENEFICIARY DIES

    Notify DFAS-DE by calling toll free 1(800)435-3396 or writing to DFAS-DE/FRB, 6760 E. Irvington Place, Denver CO 80279-6000. When reporting the death by telephone, please have available the social security numbers of both the deceased annuitant or VSI beneficiary and deceased member, the annuitant's or the beneficiary's date of death, and the name, address, and telephone number of the next of kin or other contact; also indicate who will be sending a death certificate. The annuity ceases the end of the month prior to the month of death. Therefore, any annuitant payments received the month of death and after must be returned to avoid indebtedness. Immediate notification will help to alleviate this problem. For checks sent to a bank by direct deposit, the Defense Finance and Accounting Service - Denver Center will contact the bank directly to return the funds. Please ensure the annuitant's or the VSI beneficiary and the member's social security numbers are on all correspondence sent to this agency. Customer Service Representatives at our toll-free number will help with any questions you may have.

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    Last updated: February 17, 1999 at 17:53