Since 12-23-05
Customers keep "SBP Open
Enrollment" phones ringing
Since 12-23-05
From: Waspscpo@aol.com [mailto:Waspscpo@aol.com]
Sent: Wednesday, December 21, 2005 5:03 AM
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Subject: Fw: Customers keep "SBP Open Enrollment" phones ringing
Subj: (fwd) Customers keep "SBP Open Enrollment" phones ringing
Date: 12/21/2005 1:31:55 AM Eastern Standard Time
From: p38bob@deepwell.com
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Release No. 12-08-05 Dec. 20, 2005
Customers keep "SBP Open Enrollment" phones ringing
As expected, the Survivor Benefit Plan staff has been overwhelmed with calls
regarding the special open enrollment period that started Oct. 1. Most days
there is still a constant ringing of the toll free line which will handle as
many as eight calls at a time, two more than the number of qualified people on
hand to answer the questions.
Pat Peek, Retiree Services Branch chief, advises members interested in a buy-in
cost estimate, or who need more information, not to give up as the number of
callers is expected to decrease in as the open season winds down to the 30 Sep
2006 close.
The SBP Task Force toll free number is 1 (800) 531-7502 and operates between 7:30 a.m. and 4:30 p.m., Central Time, Monday through Friday except holidays.
If someone other than the retired member calls for
information, that person should have the retiree's most recent retiree pay
statement available. Privacy Act restrictions do not permit SBP counselors to
access the retiree's account for a second party.
Noting that many callers have been shocked when notified of the high buy-in
cost, she pointed to the fact that only by including interest and penalties with
the normal monthly premiums back to the time of first becoming eligible to elect
SBP, can the integrity of the fund be maintained, one of the provision of the
law that authorized opening the SBP to late enrollment.
Members, who enrolled in SBP upon retiring, pay into the fund for many years
before an SBP annuity is ever paid and some annuities may not be paid because
the spouse dies first and the retiree does not remarry. Those coming into the
program many years after retirement have less time to pay premiums and because
many are older and perhaps in poor health, life expectancy is shorter.
When faced with the large buy-in, Ms. Peek said the retired member should look
at two new provisions that make SBP much more attractive. One is the elimination
of the Social Security offset which previously meant the annuitant dropped from
55 percent of the retired pay to 35 percent upon reaching the age of 62.
That increased to 40 percent on Oct. 1 and
The other recent change is the paid up provision which
means that beginning Oct. 1, 2008, retired members who are age 70 and older and
who have paid into the program for 30 years will no longer have to pay premiums.
Retired members, who buy-in during the current SBP enrollment period, gain
credit back to the time they first became eligible to elect SBP coverage,
meaning that some will pay monthly premiums for only than three years.
The government subsidy to SBP was projected to be 40 percent; however, these
changes are pushing the subsidy to as much as 65 percent!
Retired members interested in enrolling should read their last issue of the
Afterburner, News for USAF Retired Personnel, which was distributed in October.
It is also available on the Internet at <http://www.afpc.randolph.af.mil/afretire>
http://www.afpc.randolph.af.mil/afretire and click on Afterburner.
The issue explains how to figure the monthly SBP cost and the page 3 chart
presents the information needed to come up with the buy-in cost. Individuals,
whose "year since event" is six months or more, must use the next higher year to
determine the buy-in fact to use. For example, if a member was married at
retirement (1 June 1997) and declined SBP spouse coverage, he would use the
9-year factor (136) since he's been retired 8 years and 6 months.
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Any man or woman who may be asked in this century what they did to make life
worthwhile in their lifetime....can respond with a great deal of pride and
satisfaction, "I served a career in the United States Navy."