Matter of: Colonel Robert F. Schultz, USAF (Retired)-- SBP Coverage for Second Spouse File: B-249740 Date: June 4, 1993
Highlights
The court order was no longer effective. DECISION This is in response to a request from the Defense Finance and Accounting Service (DFAS) for an advance decision regarding Survivor Benefit Plan (SBP) coverage for Helen Schultz. Is an income maintenance plan for the surviving dependents of deceased members of the uniformed services. We conclude that Helen Schultz is currently Colonel Schultz's full coverage SBP beneficiary. DFAS asks whether Colonel Schultz can now designate Helen as his beneficiary and increase the base amount of coverage in view of "indications . . .in the SBP statute that a member should be allowed to cover his spouse whenever such coverage is not detrimental to another beneficiary.".
Matter of: Colonel Robert F. Schultz, USAF (Retired)-- SBP Coverage for Second Spouse File: B-249740 Date: June 4, 1993
DIGEST
DECISION This is in response to a request from the Defense Finance and Accounting Service (DFAS) for an advance decision regarding Survivor Benefit Plan (SBP) coverage for Helen Schultz, wife of Colonel Robert F. Schultz, USAF (Retired).[1] The SBP, 10 U.S.C. Secs. 1447-1460b, is an income maintenance plan for the surviving dependents of deceased members of the uniformed services.
For the reasons presented below, we conclude that Helen Schultz is currently Colonel Schultz's full coverage SBP beneficiary.
Colonel Schultz divorced Ainslie V. Schultz in 1989. On July 10, 1990, he married Helen Schultz. Under the terms of his divorce decree, he elected SBP coverage for Ainslie and their children when he retired effective August 1, 1991. Ainslie died December 16, 1991. In February 1992 Colonel Schultz requested that Helen be designated his SBP beneficiary and that the base amount of his coverage be increased.
DFAS asks whether Colonel Schultz can now designate Helen as his beneficiary and increase the base amount of coverage in view of "indications . . .in the SBP statute that a member should be allowed to cover his spouse whenever such coverage is not detrimental to another beneficiary."
DFAS points out that while there is no statutory provision specifically authorizing a change of beneficiary in these particular circumstances, 10 U.S.C. Sec. 1450 (f)(1) does allow a retired member to change from former spouse to spouse coverage under the circumstances specified therein. Notification of the former spouse is required and the change is to be subject to the rules set forth at 10 U.S.C. Sec. 1448(a)(5). One of the rules set forth in the latter provision requires that any substitution of a current for a former spouse must be effected within 1 year after the member's marriage to the current spouse. Since Colonel Schultz was already married to Helen in 1991 when he became eligible to retire, DFAS is concerned that the time for an election on Helen's behalf may have therefore expired.
As discussed below, it is our view that 10 U.S.C. Sec. 1450(f)(1) is not relevant to this case and that Helen Schultz became a fully entitled SBP beneficiary upon the death of Ainslie Schultz. In this regard, the SBP is designed to assure, to the extent possible, that surviving spouses and dependent children receive annuities if the member predeceases them. Thus, a member must take affirmative action to opt out of the Plan when he becomes eligible to retire, and his spouse must be notified of such action at that time. The spouse similarly must be notified if the member elects less than a full SBP coverage. Otherwise, the member's surviving spouse automatically is entitled to a full SBP annuity. 10 U.S.C. Sec. 1448(a)(2) and (a)(3)(A).
Further, an election to participate in SBP generally continues unless specifically revoked even where there is no currently eligible beneficiary. See 53 Comp.Gen. 470, 474 (1974); 10 U.S.C. Sec. 1452(a)(3). Thus, eligibility as a spouse beneficiary under the Plan automatically transfers from one spouse to another when a member remarries, unless the member takes affirmative action to preclude transfer. 10 U.S.C. Sec. 1448(a)(6). Finally, 10 U.S.C. Sec. 1447(3) broadly defines "widow" for purposes of determining eligibility for an annuity upon a member's death as "a person who, if not married to the person at the time he became eligible for retired or retainer pay . . . was married to him for at least one year immediately before his death . . .".
SBP coverage for former spouses was first enacted in 1982. See Pub. L. 97 -252, 96 Stat. 718, 735-36 (1982). Thus, under the Plan as currently enacted a member who is married at the time he becomes eligible to retire may elect SBP coverage for a former spouse. Such an election "prevents payment of an annuity" to the current spouse. 10 U.S.C. Sec. 1448(b)(2). However, before an election in favor of a former spouse may be made, the member is required to notify his current spouse of the election. 10 U.S.C. Sec. 1448(a)(3)(E); (b)(3)(D). Additionally, the member's affirmative election of former spouse coverage is required even where the former spouse was the Plan beneficiary prior to termination of her marriage with the member. 10 U.S.C. Sec. 1448(b)(3)(A).
Here, pursuant to a divorce decree court order, Colonel Schultz elected SBP coverage for his former spouse, Ainslie, and their children after he had married his current spouse, Helen. However, once Colonel Schultz's former spouse died, the court order was no longer relevant or effective, and she was no longer a beneficiary under the Plan. Therefore, a change in beneficiary as authorized by 10 U.S.C. Sec. 1450(f)(1), referenced by DFAS, was not required. The question, instead, is whether 10 U.S.C. Sec. 1448(b)(2), supra, precludes, in the event of the death of a former spouse beneficiary, the payment of an annuity to a widow who was married to the member at the time he elected former spouse coverage under court order.
It is our view that Ainslie's court-ordered coverage ceased at her death, and that Colonel Schultz and Helen reverted at that time to their status before Colonel Schultz elected Ainslie. Therefore, full coverage attached to Helen as a matter of law upon Ainslie's death. This position is fully consistent with the overall design of the Plan to provide coverage for widows and dependents, as suggested by DFAS. It also recognizes that a widow who was married to a member when he elected coverage for a former spouse under court order will be the eligible widow as defined in 10 U.S.C. Sec. 1447(3) upon his death since she was married to him when he became eligible to retire and there is no other eligible beneficiary.
Accordingly, we conclude that Helen Schultz became an SBP beneficiary by operation of law upon the death of Ainslie Schultz.
We have also been asked whether Colonel Schultz can increase his coverage for Helen. As discussed above, it is our view that Helen became fully covered upon Ainslie's death. Appropriate deductions, therefore, should be made from Colonel Schultz's retired pay to reimburse the Plan for Helen's coverage.
1. The submission was assigned DFAS number 92-10-M for control purposes.