B-181712, APR 7, 1975, 54 COMP GEN 838

B-181712: Apr 7, 1975

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PAY - RETIRED - SURVIVOR BENEFIT PLAN - SPOUSE - REMARRIAGE AFTER AGE 60 - LOSS OF DIC ELIGIBILITY WHERE SURVIVOR BENEFIT PLAN (SBP) ANNUITY IS EITHER TERMINATED OR REDUCED IN ACCORDANCE WITH 10 U.S.C. 1450(C) AND (E) BECAUSE OF RECEIPT BY THE SURVIVOR OF DEPENDENCY AND INDEMNITY COMPENSATION (DIC) REFUNDS OR PARTIAL REFUNDS OF SBP DEDUCTIONS FROM RETIRED MEMBER'S PAY ARE MADE TO THE SURVIVOR. PAY - RETIRED - SURVIVOR BENEFIT PLAN - REINSTATEMENT - AFTER LOSS OF DIC ELIGIBILITY WHERE DEDUCTIONS FROM RETIRED PAY UNDER THE SURVIVOR BENEFIT PLAN (SBP) ARE REFUNDED PURSUANT TO 10 U.S.C. 1450(E) BECAUSE THE SURVIVOR IS RECEIVING DEPENDENCY AND INDEMNITY COMPENSATION. THEN THE PORTION OF SBP ANNUITY WHICH IS REPRESENTED BY THAT REFUND HAS BEEN PERMANENTLY TERMINATED AND REPAYMENT OF THAT REFUND FOR THE PURPOSE OF ACQUIRING INCREASED SBP COVERAGE WHEN DIC IS LOST DUE TO REMARRIAGE AFTER AGE 60 IS NOT AUTHORIZED IN THE ABSENCE OF SPECIFIC LEGISLATIVE AUTHORITY.

B-181712, APR 7, 1975, 54 COMP GEN 838

PAY - RETIRED - SURVIVOR BENEFIT PLAN - SPOUSE - REMARRIAGE AFTER AGE 60 - LOSS OF DIC ELIGIBILITY WHERE SURVIVOR BENEFIT PLAN (SBP) ANNUITY IS EITHER TERMINATED OR REDUCED IN ACCORDANCE WITH 10 U.S.C. 1450(C) AND (E) BECAUSE OF RECEIPT BY THE SURVIVOR OF DEPENDENCY AND INDEMNITY COMPENSATION (DIC) REFUNDS OR PARTIAL REFUNDS OF SBP DEDUCTIONS FROM RETIRED MEMBER'S PAY ARE MADE TO THE SURVIVOR. A SURVIVOR HAVING RECEIVED SUCH A REFUND WHO SUBSEQUENTLY LOSES ELIGIBILITY FOR DIC BECAUSE OF REMARRIAGE AFTER AGE 60 WOULD NOT BE ENTITLED AN INCREASE IN OR REINSTATEMENT OF SBP BUT ONLY TO THE SBP ANNUITY ON THE BASIS OF THE COVERAGE PAID FOR AND NOT REFUNDED SINCE NOTHING IN THE LAW OR LEGISLATIVE HISTORY THEREOF SHOWS THAT CONGRESS INTENDED TO PROVIDE COST-FREE COVERAGE. PAY - RETIRED - SURVIVOR BENEFIT PLAN - REINSTATEMENT - AFTER LOSS OF DIC ELIGIBILITY WHERE DEDUCTIONS FROM RETIRED PAY UNDER THE SURVIVOR BENEFIT PLAN (SBP) ARE REFUNDED PURSUANT TO 10 U.S.C. 1450(E) BECAUSE THE SURVIVOR IS RECEIVING DEPENDENCY AND INDEMNITY COMPENSATION, THEN THE PORTION OF SBP ANNUITY WHICH IS REPRESENTED BY THAT REFUND HAS BEEN PERMANENTLY TERMINATED AND REPAYMENT OF THAT REFUND FOR THE PURPOSE OF ACQUIRING INCREASED SBP COVERAGE WHEN DIC IS LOST DUE TO REMARRIAGE AFTER AGE 60 IS NOT AUTHORIZED IN THE ABSENCE OF SPECIFIC LEGISLATIVE AUTHORITY.

IN THE MATTER OF THE SURVIVOR BENEFIT PLAN, APRIL 7, 1975:

THIS ACTION IS IN RESPONSE TO A LETTER FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION ON SEVERAL QUESTIONS CONCERNING SURVIVOR BENEFIT PLAN (SBP) COVERAGE IN THE CASE OF WIDOWS OF RETIRED MEMBERS WHOSE SBP ANNUITIES HAD BEEN TERMINATED ENTIRELY OR REDUCED BECAUSE OF ENTITLEMENT TO DEPENDENCY AND INDEMNITY COMPENSATION (DIC) PAYMENTS AND WHO HAVE RECEIVED APPROPRIATE REIMBURSEMENT OF SBP COSTS DEDUCTED FROM THE RETIRED PAY OF THEIR SPOUSES. THE QUESTIONS AND A DISCUSSION THEREOF ARE SET FORTH IN THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 505.

THE QUESTIONS ARE AS FOLLOWS:

1. CAN THE SBP ANNUITY BE REINSTATED IN THE FULL AMOUNT UPON REMARRIAGE AFTER AGE 60 AND FORFEITURE OF DIC?

2. IF QUESTION 1 IS ANSWERED IN THE NEGATIVE, WOULD THE ANSWER BE THE SAME IF THE ANNUITANT REPAID THE COST PREVIOUSLY REFUNDED TO HER?

3. IF QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE, MUST RECOUPMENT OF THE REFUND OF SBP COST BE MADE?

THE DISCUSSION CONTAINED IN THE COMMITTEE ACTION REFERS TO 10 U.S.C. 1450(C) WHICH PROVIDES AS FOLLOWS:

"(C) IF, UPON THE DEATH OF A PERSON TO WHOM SECTION 1448 OF THIS TITLE APPLIES, THE WIDOW OR WIDOWER OF THAT PERSON IS ALSO ENTITLED TO COMPENSATION UNDER SECTION 411(A) OF TITLE 38, THE WIDOW OR WIDOWER MAY BE PAID AN ANNUITY UNDER THIS SECTION, BUT ONLY IN THE AMOUNT THAT THE ANNUITY OTHERWISE PAYABLE UNDER THIS SECTION WOULD EXCEED THAT COMPENSATION."

IT IS NOTED IN THE DISCUSSION THAT UNLIKE DIC WHICH IS LOST UPON REMARRIAGE AFTER AGE 60, 10 U.S.C. 1450(B) PROVIDES THAT AN ANNUITY PAYABLE UNDER 10 U.S.C. 1448 WOULD TERMINATE ONLY WHEN THE ANNUITANT REMARRIES BEFORE REACHING AGE 60. THE DISCUSSION IN THE COMMITTEE ACTION ALSO REFERS TO THE LEGISLATIVE HISTORY OF THE SBP AND INDICATES THAT NUMEROUS REFERENCES ARE CONTAINED THEREIN TO THE FACT THAT THE CONGRESS INTENDED THAT THE SURVIVING SPOUSE OF A RETIRED MEMBER WOULD AT ALL TIMES RECEIVE NO LESS THAN 55 PERCENT OF THE BASE AMOUNT ON WHICH THE ANNUITY IS COMPUTED. IT IS ALSO STATED THAT, IN VIEW OF THIS CONCEPT, IT WOULD APPEAR THAT WHEN DIC IS LOST, THE SBP ANNUITY SHOULD BE REINSTATED OR INCREASED TO 55 PERCENT OF THE BASE AMOUNT.

IT IS ALSO INDICATED IN THE DISCUSSION IN THE COMMITTEE ACTION THAT CURRENT DEPARTMENT OF DEFENSE REGULATIONS (DOD DIRECTIVE 1332.27, JANUARY 4, 1974), SPECIFY THAT ENTITLEMENT UNDER THE SBP TERMINATES PERMANENTLY WHEN DIC EXCEEDS THE AMOUNT THAT WOULD HAVE BEEN PAID AS AN ANNUITY UNDER THE SBP. HOWEVER, THE REGULATIONS ARE SILENT AS TO WHETHER LOSS OF SBP ENTITLEMENT IS PERMANENT WHEN DIC IS LESS THAN THE AMOUNT OF THE SBP ANNUITY. IT IS ALSO INDICATED THAT WHILE NO STATUTORY PROVISION SPECIFICALLY ADDRESSES THIS POINT, THE VIEW THAT SBP TERMINATES PERMANENTLY WHEN DIC EXCEEDS THE AMOUNT THAT WOULD HAVE BEEN PAID AS AN SBP ANNUITY IS APPARENTLY BASED ON THE PROVISIONS OF 10 U.S.C. 1450(E), WHICH PROVIDE AS FOLLOWS:

"(E) IF NO ANNUITY UNDER THIS SECTION IS PAYABLE BECAUSE OF SUBSECTION (C), ANY AMOUNTS DEDUCTED FROM THE RETIRED OR RETAINER PAY OF THE DECEASED UNDER SECTION 1452 OF THIS TITLE SHALL BE REFUNDED TO THE WIDOW OR WIDOWER. IF, BECAUSE OF SUBSECTION (C), THE ANNUITY PAYABLE IS LESS THAN THE AMOUNT ESTABLISHED UNDER SECTION 1451 OF THIS TITLE, THE ANNUITY PAYABLE SHALL BE RECALCULATED UNDER THAT SECTION. THE AMOUNT OF THE REDUCTION IN THE RETIRED OR RETAINER PAY REQUIRED TO PROVIDE THAT RECALCULATED ANNUITY SHALL BE COMPUTED UNDER SECTION 1452 OF THIS TITLE, AND THE DIFFERENCE BETWEEN THE AMOUNT DEDUCTED PRIOR TO THE COMPUTATION OF THAT RECALCULATED ANNUITY AND THE AMOUNT THAT WOULD HAVE BEEN DEDUCTED ON THE BASIS OF THAT RECALCULATED ANNUITY SHALL BE REFUNDED TO THE WIDOW OR WIDOWER."

IT IS NOTED IN THE DISCUSSION THAT THE LEGISLATIVE HISTORY IS SILENT AS TO THE SPECIFIC PURPOSE OF SUBSECTION 1450(E) AND TO THE INTENT OF CONGRESS REGARDING THE REFUND OF DEDUCTIONS OR REINSTATEMENT OF SBP TO THE FULL AMOUNT WHEN DIC ENTITLEMENT IS LOST. IT IS STATED IN THE DISCUSSION THAT IF IT WAS INTENDED BY CONGRESS THAT LOSS OF ENTITLEMENT TO SBP UNDER THE CIRCUMSTANCES IS PERMANENT, THEN LOGIC AND CONSISTENCY DICTATE THAT IF THERE IS A PERMANENT LOSS OF ENTITLEMENT TO SBP WHEN DIC EXCEEDS THE AMOUNT OF THE ANNUITY, THERE SHOULD ALSO BE A PERMANENT LOSS OF PARTIAL ENTITLEMENT WHEN DIC IS LESS THAN THE SBP ANNUITY.

UNDER THE PROVISIONS OF 10 U.S.C. 1450(C), A WIDOW OR WIDOWER WHO IS ENTITLED TO DIC COMPENSATION MAY BE PAID AN ANNUITY UNDER THE SBP, BUT ONLY IN AN AMOUNT THAT THE ANNUITY OTHERWISE PAYABLE WOULD EXCEED THE DIC PAYMENTS. THE FIRST SENTENCE OF SUBSECTION 1450(E) OF THE SAME TITLE PROVIDES THAT IF NO ANNUITY IS PAYABLE BECAUSE THE DIC PAYMENT EXCEEDS THE SBP COVERAGE CHOSEN, ANY AMOUNTS DEDUCTED FROM THE RETIRED OR RETAINER PAY OF THE DECEASED UNDER SECTION 1452 SHALL BE REFUNDED TO THE WIDOW OR WIDOWER. THE SECOND AND THIRD SENTENCES OF SUBSECTION 1450(E) PROVIDE THAT IF BECAUSE OF SUBSECTION (C) OF THE SAME SECTION, THE ANNUITY PAYABLE IS LESS THAN THE AMOUNT OF THE ANNUITY ESTABLISHED UNDER THE PLAN, THE ANNUITY PAYABLE UNDER THE PLAN WILL BE RECALCULATED AND THE AMOUNT OF DEDUCTIONS FROM THE MEMBER'S RETIRED PAY NEEDED TO PROVIDE THAT RECALCULATED ANNUITY WILL BE DETERMINED AND THE DIFFERENCE BETWEEN THAT AMOUNT AND THAT ACTUALLY PAID BY THE MEMBER FOR SBP COVERAGE WILL BE REFUNDED TO THE WIDOW.

IT APPEARS THAT CONGRESS, IN ESTABLISHING THE SBP, PRESUMED THAT, FOR THE PURPOSE OF INITIALLY REDUCING RETIRED PAY, THE SBP ANNUITY PAYABLE WOULD PROVIDE ALL OF THE DEPENDENT'S INCOME AT THE LEVEL OF PARTICIPATION CHOSEN BY THE MEMBER. IN THE FINAL ANALYSIS, HOWEVER, IT WAS RECOGNIZED THAT WHERE DIC PAYMENTS WOULD BE MADE, A MEMBER WHO PROVIDED SURVIVOR ANNUITY COVERAGE FOR HIS SPOUSE SHOULD ONLY BE REQUIRED TO PAY THROUGH DEDUCTIONS FROM RETIRED PAY, THAT COST OF THE SBP COVERAGE WHICH HIS SURVIVOR ACTUALLY RECEIVES. THUS, WHEN A MEMBER HAS PROVIDED COVERAGE FOR HIS SPOUSE UNDER 10 U.S.C. 1448(A) BUT UPON THE DEATH OF THE MEMBER HIS SURVIVOR RECEIVES DIC PAYMENTS, THEREBY REDUCING THE SBP ANNUITY ELECTED AND PAID FOR BY THE MEMBER, OR ELIMINATING IT ALTOGETHER, SUCH SURVIVOR WOULD BE ENTITLED TO RECEIVE A REFUND OF PART OR ALL OF THE MEMBER'S CONTRIBUTION TO THE PLAN. SINCE THERE IS NOTHING IN THE LAW OR LEGISLATIVE HISTORY TO SHOW THAT CONGRESS INTENDED TO PROVIDE COST-FREE COVERAGE, EXCEPT IN THE CASE OF WIDOWS RECEIVING AN ANNUITY UNDER 10 U.S.C. 1448(D) WHEN THEIR SPOUSES DIE ON ACTIVE DUTY, IT IS OUR VIEW THAT IN THE SITUATION WHERE THE SURVIVING SPOUSE LOSES ELIGIBILITY FOR DIC PAYMENTS BY REASON OF REMARRIAGE AFTER AGE 60, SHE WOULD ONLY BE ENTITLED TO CONTINUE TO RECEIVE AN SBP ANNUITY THEREAFTER ON THE BASIS OF THE COVERAGE PAID FOR AND NOT REFUNDED. QUESTION 1 IS ANSWERED IN THE NEGATIVE.

QUESTION 2 POSES THE QUESTION OF WHETHER REPAYMENT BY THE WIDOW OF THE REFUND MADE UNDER 10 U.S.C. 1450(E) WOULD OPERATE TO ALLOW REINSTATEMENT TO THE SBP ANNUITY.

WHILE THERE IS PROVISION MADE IN PUBLIC LAW 92-425 FOR REFUND OF SBP DEDUCTIONS MADE FROM A MEMBER'S RETIRED PAY, THERE IS NOTHING IN THAT LAW WHICH AUTHORIZES REPAYMENT OF AN EARLIER REFUND. IN THIS CONNECTION, THERE IS FOR NOTING THE PROVISIONS OF THE SURVIVOR ANNUITY PLAN OF CIVILIAN EMPLOYEES OF THE GOVERNMENT. SUBSECTION 8341(G)(2) OF TITLE 5, U.S. CODE, SPECIFICALLY PROVIDES FOR THE REINSTATEMENT OF A SURVIVOR ANNUITANT UNDER SIMILAR CIRCUMSTANCES WHEN REPAYMENT OF AMOUNTS REFUNDED ARE MADE.

WE ARE AWARE OF THE FACT THAT BY DESIGN THE SBP AND THE PLAN APPLICABLE TO CIVILIAN RETIREES WERE MEANT TO BE SIMILAR IN MANY RESPECTS. HOWEVER, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY IN THE SBP SUCH AS THAT CONTAINED IN 5 U.S.C. 8341(G)(2), IT IS OUR VIEW THAT WHEN PART OF THE DEDUCTIONS FOR AN SBP ANNUITY HAS BEEN REFUNDED, THE PORTION OF SUCH ANNUITY WHICH IS REPRESENTED BY THAT REFUND HAS BEEN PERMANENTLY TERMINATED AND REPAYMENT OF A 10 U.S.C. 1450(E) REFUND WOULD NOT BE AUTHORIZED.

QUESTION 2 IS ANSWERED ACCORDINGLY AND IN VIEW OF THE ANSWER TO QUESTION 1 NO ANSWER IS REQUIRED FOR QUESTION 3.