Shirley Ann Brown - Survivor Benefit Plan Annuity for Former Spouse B-253023 August 27, 1993 72 Comp.Gen. 293

Shirley Ann Brown - Survivor Benefit Plan Annuity for Former Spouse B-253023 August 27, 1993 72 Comp.Gen. 293

Military Personnel Pay Survivor benefits Annuities Eligibility Former spouses A provision in a property settlement agreement incorporated into a final divorce decree which states that the husband will not oppose the wife's right to perfect survivor benefits is unclear regarding whether the agreement is in regard to a Survivor Benefit Plan (SBP) annuity and therefore, is not definite enough to provide a basis for the former spouse's deemed election request under SBP.

DECISION This is in response to an appeal of a Claims Group determination which denied Ms. Shirley Ann Brown's claim for a Survivor Benefit Plan (SBP) annuity as the former spouse of Colonel Thomas D. Brown, USAF (Retired)(Deceased). For the reasons which follow, Ms. Brown's claim may not be paid.

Shirley Brown and Colonel Brown were married on August 3, 1950, and he retired on October 5, 1979, at which time he elected maximum SBP coverage for his spouse. They were divorced on February 20, 1981. The divorce decree incorporated an "Agreement Incident to Divorce" signed by both parties which divided the parties' property. One section of the agreement was entitled "Agreement as to Survivor Benefit" and read as follows:

"The parties acknowledge that one of the assets divided under this agreement is the retirement plan with the United States Air Force. At present, there are cases pending to determine the property interest, if any, in such retirement plans for divorced wives. The parties agree, that, should the courts of the United States recognize such a right in divorced wives, that husband will not oppose the wife's right to perfect such survivor benefits, if any."

In 1981, when the agreement was signed and the divorce became final, there was no provision for former spouse annuity coverage. Therefore, Colonel Brown's SBP account was suspended.

On February 27, 1981, Colonel Brown married Linda Prust and she became the spouse beneficiary under the SBP on the first anniversary of their marriage. 10 U.S.C. Sec. 1447(3). Colonel Brown died on May 8, 1991, and an SBP annuity was initially established for Linda, as his surviving spouse. Shirley Brown protested the annuity claiming that she is the appropriate beneficiary based on the 1981 agreement. In view of the dispute, the Defense Finance and Accounting Service, Denver Center, suspended any annuity payments and the matter was submitted to our Office as a doubtful claim.

Our Claims Group denied Shirley Brown's claim on May 29, 1992, because there was no written voluntary agreement by Colonel Brown to provide former spouse coverage.

The SBP, 10 U.S.C. Secs. 1447-1455, was established by Congress in 1972 as an income maintenance program for dependents of deceased members of the uniformed services. As noted earlier, the original legislation provided no authority for coverage of former spouses and upon a divorce, a retiree's former spouse lost coverage.

Congress enacted legislation in 1982 authorizing a member to elect coverage for a former spouse at the time he became eligible to participate in the plan. In 1983 the SBP was amended to provide eligible members the option of designating a former spouse as beneficiary if the member had initially elected coverage for a spouse and later divorced that spouse. To make such an election, it was necessary for the member to submit a statement indicating whether the election was pursuant to a voluntary written agreement previously entered into as part of or incident to a proceeding of divorce, dissolution, or annulment and whether such voluntary written agreement had been incorporated in or ratified or approved by a court order. 10 U.S.C. Secs. 1447-1448 and 1450.

In 1984 Congress further amended the law to provide that an election for a former spouse could be deemed by the Secretary concerned to have been made if there was a voluntary written agreement for SBP coverage for the former spouse and such an agreement had been incorporated in, ratified or approved by, court order. 10 U.S.C. Sec. 1450(f)(3)(A). The request for a deemed election had to be received within 1 year of the court order or October 1, 1985, whichever is later.

In July 1985, Shirley Brown requested that she be deemed as the former spouse beneficiary under Colonel Brown's SBP. By letter dated August 27, 1985, the Finance Center advised her that the request was accepted and she was being recorded as the beneficiary. On the same date, Colonel Brown was advised of the action and on September 18, 1985, he protested the designation by contending that the agreement in the divorce proceedings was not a voluntary agreement. Based on this protest, the Finance Center found that the deemed election should not be honored, however, it appears neither party was notified of the decision.

The agreement at issue here was entered into prior to the time the SBP law was amended to authorize elections to provide annuity coverage for a former spouse. The determination of whether such an agreement may properly serve as the basis for a "deemed" election depends on the terms of the particular agreement and such determinations must be made on a case-by- case basis. 66 Comp.Gen. 687 at 694 (1987).

We find that the agreement incorporated into the "Agreement Incident to Divorce" is not specific enough or clear enough to allow Ms. Brown's deemed election.

First, we find that there is doubt as to whether this was an agreement to provide a Survivor Benefit Plan annuity. The paragraph notes that the retirement plan is one of the assets being divided and there are cases pending to determine former spouses' rights therein. At the time this agreement was signed (February 1981), the question of a former spouse's right in a member's retired pay was before the courts and in June 1981, the Supreme Court issued its decision in McCarty v. McCarty, 453 U.S. 210 (1981), which held that a member's retired pay was a personal entitlement of the member and not subject to division as community property. A year later, Congress passed the "Uniform Services Former Spouses Protection Act" (Pub. L. No. 97-252, 96 Stat. 730), which provided for direct payment of alimony, child support, and property distribution to former spouses. The Act also provided that a former spouse could be designated an SBP beneficiary by the voluntary act of the member.

In addition, while the agreement states that the husband will not oppose the wife's right to perfect such survivor benefits, it does not place a burden on him to provide coverage to the former spouse and does not set forth the level at which such coverage would be obtained or who would be responsible for payment of the premiums.

We view the agreement as merely providing that if any benefits for former spouses should become available under law, the agreement would not preclude further action by the former spouse. We do not view the agreement as requiring the member to provide such coverage.

Accordingly, we find the agreement to lack the specificity required to deem an election for former spouse coverage.