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Two Ways to Prepare

Many people like to leave something behind for their loved ones when they die. Your retirement pay offers you two ways of leaving something behind:
  1. Arrears of Pay (AOP): allows you to leave your final month’s pay and any other money owed to you at the time of your death to a beneficiary
  2. Annuity Coverage: the Survivor Benefit Plan (SBP), Reserve Component Survivor Benefit Plan (RC-SBP) or Retired Serviceman's Family Protection Plan (RSFPP) allow you to leave an ongoing monthly income to someone you love
To take advantage of either plan, you must designate a beneficiary. To take part in an annuity plan, you must elect coverage and pay for it.

Arrears of Pay (AOP)

Arrears of Pay is a one-time payment made to a beneficiary after your death. Because your entitlement to retirement pay ends on the date of your death, the Arrears of Pay will consist of a pro-rated amount of your final month's retirement pay, in most cases.

There is no cost for AOP coverage, but it is important to designate a beneficiary. This beneficiary designation must be made separately from your designation of beneficiary for SBP or any other annuity program.

Annuity Coverage

The Survivor Benefit Plan (SBP), Reserve Component Survivor Benefit Plan (RC-SBP) and Retired Serviceman's Family Protection Plan (RSFPP) provide eligible beneficiaries with a form of benefit called an "annuity." An annuity is a monthly payment for the lifetime of the beneficiary. Enrollment in an annuity plan is not automatic and there are costs.

Related Links

Survivor Benefit Plan Overview
Reserve Component Survivor Benefit Plan Overview
Arrears of Pay Overview Page Updated January 30, 2012