4 March 2004
The Honorable Jon S. Corzine
Dear Senator Corzine:
On behalf of the Fleet Reserve Association (FRA), I respectfully request your introduction of the proposal to change the effective date for paid-up coverage under the military Survivor Benefit Plan from October 1, 2008, to October 1, 2004, as a companion bill to H.R. 1653, introduced by your fellow New Jersey colleague Jim Saxton.
The current language affecting the paid-up coverage is of great concern to many of the Association= s members as well as others from the retired military community. The average age of FRA members is 68 equating to more than one-half the membership being affected by the requirement to pay premiums into the SBP program longer than those who enrolled at a later date.
Older retirees who have turned 70 or more years of age and have been enrolled in the program since its inception in 1972 are now paying for the 32nd year. If the current date remains at October 1, 2008, they will have paid into the program for an additional six years, or 72 monthly payments. At $100 monthly, for example, the penalty will equal $7,200.
This is extremely unfair to those military retirees who have participated for more than 30 years and are at least 70 years of age. Not only is it unfair because the law discriminates against one group of military retirees, but causes that group to pay additional premiums due to the Federal government= s failure to bear 40 percent of the costs. That figure is now down to approximately 19 percent, much of it due to Congress amending the original law by adding more and more categories of service members whose survivors are now eligible for SBP annuities. Since these service members do not have to contribute to the program, it places the burden of financing the plan on the backs of retired military participants.
Your introduction of a bill changing the offending date to an earlier one will be welcomed by the FRA membership and publicized widely in association publications and on our web site. Members of your staff may contact Bob Washington, FRA= s Director of Legislative Programs at (703) 683-4257, ext. 110, for additional information, and I thank you in advance for your consideration.