Taking Care of Your Loved Ones: What You Should Do to Prepare Them
There are two ways you can prepare to leave behind money from your military retirement for your loved ones:
- Your final paycheck, which will be paid to your Arrears of Pay (AOP) beneficiary; and
- If you choose, the Survivor Benefit Plan, which pays a monthly annuity.
Arrears of Pay is a one-time payment, usually less than one month’s pay, made to a beneficiary after your death. Arrears of Pay is not a death benefit. The Arrears of Pay payment to your beneficiary is:
The pro-rated amount of your final month’s pay; and, if applicable, any other money owed to you at the time of your death.
The importance of designating your AOP beneficiary
It’s important to designate a beneficiary or beneficiaries in your retired pay account for your Arrears of Pay, and to keep the information current.
Unless otherwise noted, your AOP beneficiary will also be the person we contact for assistance in closing your account, so it is important to designate a person you trust to handle your affairs.
Failing to designate an AOP beneficiary and keep their contact information current could cause stress and financial hardship for your survivors during an already difficult time, because the final payment could be delayed.
When no beneficiary is named, the payment is made to the highest person in what is known as the "Order of Precedence." The Order of Precedence is the federally mandated order of inheritance that applies to legacies without a designated beneficiary. It can take many months to locate your survivors, identify who comes highest in the Order of Precedence, and then make the payment.
That's why having a current, correct and complete beneficiary designation on file is important to prevent delays or errors in your arrears payments.
We also suggest you limit the number of your AOP beneficiaries to avoid delays in payment. Remember that the AOP payment is usually less than one month’s pay, and this amount will be divided among all of your designated beneficiaries.
Keep in mind that designating a sole beneficiary in your will does not automatically make that person your AOP beneficiary.
Also, the AOP designation does not entitle the person named as a beneficiary(s) to SBP. A separate SBP election must be made to cover the desired individual for SBP purposes.
Telling your loved ones what to expect
In the difficult days after your passing, your loved ones will need to notify a long list of people and agencies.
We try to make the process a bit easier by offering an online notification of death form
on our website.
Your loved ones can access the online notification form from several different links at the Retired Military & Annuitants area of our website at: www.dfas.mil/retiredmiitary
Your loved one can also call our Customer Care Center at 800-321-1080.
When your loved one has notified us, they will receive a condolence package in the mail that will include information and the form to claim Arrears of Pay (SF 1174), as well as the information and form to apply for the Survivor Benefit Plan annuity (if you elected to provide it). This package should arrive in the mail within 30 days after we are notified.
It’s important for your loved ones to know that they will need to provide a copy of the certificate of death with these forms.
Coming soon: new tools to make claiming Arrears of Pay easier
We know that taking care of the paperwork after someone passes away is difficult. We want to make the process as easy as possible. We’ll soon be launching a set of tools to make filling out and submitting the SF 1174 (for claiming Arrears of Pay when a retiree passes away) quicker and easier.
The tools will include: a SF 1174 PDF Form Wizard, a how-to checklist and video, and an AskDFAS online upload tool.
The tools will be available on the Forms page on our website: www.dfas.mil/retiredmilitary/forms
See the article in this issue “Coming Soon: More Tools to Make Filling Out and Submitting Forms Easier” for more information.
Page last updated on Sept 25, 2019