Department of Defense Military Pay and Allowance Committee Action No. 524

The Assistant Secretary of Defense (Comptroller) requested a decision on several questions concerning the correct method of recalculating the cost of a Survivor Benefit Plan (SBP) annuity. Where a widow's SBP annuity is reduced by the award of Dependency and Indemnity Compensation (DIC) the computation of the cost of the reduced annuity is to be done monthly and shall include all cost-of-living increases in retired pay and all increases in DIC rates from the date of the member's retirement until the date of his death. Recalculation of SBP annuity pursuant to 10 U.S.C. 1450 is permitted only when the annuity is reduced by a DIC award effective "upon the death" of the retiree.