Social Security Offset Requirement of Survivor Benefit Plan

GAO was asked whether: (1) a Social Security offset was required when the Survivor Benefit Plan annuitant is a widow(er), aged 62, if there is no entitlement to a Social Security benefit based solely on the retiree's military earnings, but such entitlement exists based on lifetime earnings; and (2) changes should be made in the setoff procedures set forth in Department of Defense Directive 1332.27, and if so, should they be prospective or retroactive. In response, GAO stated that for the purpose of the reduction in the Survivor Benefit Plan annuity, it is unnecessary for the deceased service member to have acquired a fully insured Social Security status based solely on military service. The setoff is based on that portion of the total Social Security payment attributable to the deceased member's military service. Additionally, according to the Department of Defense directive, deceased service members should receive free wage credits for military service after 1956 for the purpose of computing total Social Security payments. Therefore, the free wage credits must be included in the computation of the Social Security setoff since generally those credits tend to increase Social Security payments.