DUI Newsroom

Armed Services Committee Improves Veterans Survivor Benefit Plan

“Service members and survivors who signed up for the program will finally see some significant improvements to the SBP,” said Saxton. “We worked on this late into the evening and came up with the one of the most significant program improvements in the history of the SBP.”

The House Armed Services Committee approved eliminating the Social Security offset under the SBP by increasing the annuities paid to survivors of military retirees who are 62 or older. The SBP provision was included in H.R. 4200, the Fiscal Year 2005 National Defense Authorization Act, which was passed by the Committee late last evening.

There are approximately 43,000 veterans in Burlington County, 59,000 in Ocean County and 40,000 in Camden County.

“We pushed for its inclusion in the 2005 Defense Authorization Act,” Saxton said. “It appears that we finally will fix the major inequity of the Survivor Benefit Plan.”

Lee Lange, Deputy Director of Government Relations at the Military Officers Association of America, praised the House for acting to right a longstanding unfairness, calling it “a major development.”

”This is truly a remarkable turn of events,” Lange said. “We are stunned and we couldn’t be more pleased.”

The SBP, established in 1972, provides a monthly income to the surviving spouse of a military retiree who chooses to participate. The retiree accepts reduced retired pay in exchange for an annuity that would benefit the surviving spouse upon the retiree’s death. Currently the surviving spouse would receive 55% of the deceased’s retired pay until age 62 when the spouse would receive 35 percent due to the Social Security offset.

Many of these survivors were never told about this annuity cut and the unexpected loss of income can be financially devastating. The 20 percent reduction does not match what was promised and provided to survivors of other federal retirees.

Restoring equity requires an increase in the SBP annuity. The legislation would eliminate the Social Security offset under SBP and increase the annuities paid to survivors of military retirees who are 62 or older from 35 percent of retired pay to the percentages indicated for the following periods:

• (1)        For months after September 2005 and before April 2006:  40 percent
• (2)        For months after March 2006 and before April 2007:  45 percent
• (3)        For months after March 2007 and before April 2008:  50 percent
• (4)        For months after March 2008: 55 percent

Restoring SBP equity over this period will cost approximately $2 billion. The bill, H.R. 4200, will head to the House floor next week.

Saxton has worked for years to improve SBP. In 1998, Saxton cosponsored a bill H.R. 3107, which was incorporated in the 1999 National Defense Authorization Act and signed into law. As passed, participants who have been enrolled in the SBP for 30 years and have reached the age of 70 can enter a “paid-up” status, whereby they would stop paying further SBP premiums and continue to receive SBP benefits for their survivors in the event of their death. The effective date of this provision, however, is delayed until October 1, 2008.  Saxton then introduced an SBP reform bill in 2003, H.R. 1653, to rectify the delayed effective date.  Currently, this bill has garnered 48 cosponsors.