Survivor Benefit Plan Paid-Up Cost Information

DFAS has recently received a number of calls and written correspondence concerning the Survivor Benefit Plan (SBP) “Paid-Up” provision that becomes effective in 2008.

In an effort to clear up confusion on the issue, the following information has been provided for military retirees on the new SBP provision.

In October 1998, Public Law 105-261, Section 642 added a “Paid-Up” provision to 10 U. S. C. 1452 (j) with regards to SBP.  This provision sets forth the requirement that qualified participants shall no longer be required to make SBP premium payments effective October 1, 2008.

A qualified participant is a retired member of the uniformed services aged 70 or older and whose retired pay has been reduced by SBP premiums for 360 months or more.  Direct remittance by a participant under 10 U. S. C. 1452 (d) shall be deemed as SBP premium reduction from retired pay for the purposes of determining the number of months of retired pay deductions.

In other words, for SBP premiums to be considered “paid-up”, a retired military member must be a minimum of 70 years old by October 1, 2008, and have paid SBP premiums for a minimum of 360 months for the coverage the member is requesting to stop. Retired members who attain age 70 after October 1, 2008, must complete the minimum 360 months of payments requirement to be in “paid-up” status. 

Keep reading the DFAS Retired Pay Newsletter for more stories on the SBP “Paid-Up” provision as the effective date of October 1, 2008 nears.