Let's say that you completed 20 good years for retirement in the reserves on June 1. Your Retirement Year End date (RYE) is August 1 the same year. After August 1, in this example, you should see your “20 Year Letter” uploaded into your electronic record.
A hard copy gets mailed to you and/or your unit. Included in this mailing is a packet on the Reserve Component Survivor Benefit Plan. This plan gives you an opportunity to select from one of three plans:
Plan A: Gives you the option to wait until you're 60 to choose an option. If you die before you're 60, your beneficiary doesn't get any annuities.
Plan B: If you die before you turn 60, your beneficiary starts receiving annuities on the day you would've turned 60.
Plan C: If you die before you turn 60, your beneficiary starts receiving annuities effective your date of death.
If you chose “Plan A” or “Plan B,” your spouse also has to agree in writing by also signing the enrollment form.
By law, you're automatically enrolled in “Plan C.” If you don't make an election, this election becomes permanent. You have 90 days, from the day you receive your survivor benefit packet, to make an election.
Who could be your beneficiary?
Spouse: Your spouse has to be married to you when you select one of the plans. You guys have to be married the day you die. If you guys get divorced, then you remarry, your new spouse has to be married to you for a year. If you have a child with your new spouse before the first year wedding anniversary, that spouse becomes eligible the moment your child is born.
Spouse and Children: If you chose this option, your spouse is subject to the same criteria listed for “spouse” above. This option allows your children to receive annuities if your spouse isn't eligible for the annuities. This could happen if the spouse remarries before becoming 55 years old, or via death.
Former Spouse: A court could order you to choose this option as a result of a divorce. You could also do this voluntarily. If you've remarried, you'll need your current spouse to also sign the enrollment form. This option prevents your current spouse and children from receiving annuities if you die. This is applicable even if your former spouse no longer is eligible to receive annuities.
Former spouse and children: Same general criteria as the “spouse and children” and “former spouse” options above. This option prevents your current spouse and children from receiving annuities.
Insurable Interest: This is for those who aren't married, but do have a dependent child. You could also chose an immediate family member, like a brother, sister, child, etc. to be covered by this option.
Chose wisely; once the military service receives your enrollment packet, your decision is final.
If your beneficiary dies you could “suspend” coverage. If you get married again, your new spouse has to be married to you for a year to become eligible. The spouse could become eligible sooner than a year if you guys have a child. Use the “Survivor Benefit Plan Election Change Certificate, DD Form 2656-6, to suspend or resume coverage.
There's a basic premium and a reservist premium. The basic premium is applicable for option “A”. The reserve premium is applicable for options “B” and “C.” Everybody would pay the basic premium. The reserve premium covers benefits that could be received before the reservist would've turned 60.
You could choose your entire retirement check as the base amount to calculate premiums. You could also select a fraction of your retirement check as the base amount to calculate premiums. You can't select less than $300.00 as a base amount. If your projected retirement pay will be less than $300.00, you have to select your entire retirement pay.
If you choose an amount that's less than your retirement pay, your spouse also has to sign your enrollment form.
Calculating basic premium if base amount is up to $1,601.00:
1. Multiply 2.5% by $747.00
2. Subtract $747.00 from the total base amount.
3. Take the result from step “2” and multiply it by 10%.
4. Add the results of steps “1” and “3.”
The result is the approximate base premium that you'll be paying.
Calculating basic premium if base amount is over $1,601.00:
1. Multiply base amount by 6.5%.
This is based on a percentage of your base amount. It depends on how old you are relative to your spouse. The older you are relative to your spouse, the more your “per $100.00” rate will be. If your spouse is older than you, use your age. When looking at the rates in one of the rate tables, use the age that's closer to the date you made your election.
You can suspend your coverage if your beneficiaries no longer qualify. This happens in case of death or remarriage. If your spouse, or former spouse, gets remarried before age 55, the annuities stop until the spouse gets divorced again. You use the election change form to suspend coverage.
What forms will you get when you get your 20 Year Letter packet?
This article is based on an Army Reserve retirement packet. The Department of Defense forms are consistent among the services. Each service will have additional forms in these packets.
Notification of Eligibility for Retired Pay at 60 letter:
This letter lets you know that you have enough years to qualify to retire with pay.
If you end up becoming eligible for retired pay for an armed force, you won't be eligible for this retirement pay. For example, let's say you have almost 18 years of active duty service. You mobilize for a deployment that'll put you over 18 years of active duty. You submit a sanctuary packet to stay on active duty until you have 20 years of active service.
In this scenario, you'll be eligible for a regular military retirement, you won't be eligible for your reserve retirement. If you get medically separated, and accept a severance pay relative to that medical separation, you won't be eligible for reserve retirement pay.
The letter reminds you that you have to maintain 50 points minimum each retirement year in order to continue to remain in the active reserve status. This is applicable to those in the troop program unit/(SELRES), Individual Ready Reserves, and Individual Mobilization Augmentee program.
If, after receiving this letter, you fall below that number, you could face involuntary retirement.
The letter continues on with information on the survivor benefit plan requirement.
Reserve Component Survivor Benefit Plan packet:
This packet contains information on the survivor benefit plan for reservists. It includes an example of each of the plans. This packet explains each option, and provides information related to your retirement. You'll find the following forms in your 20 Year Letter mailing:
1. Notice of Eligibility to Retire with Pay at 60 letter.
2. AHRC Form 4162: Retiree Casualty Assistance Checklist.
3. DD Form 2656-1: Survivor Benefit Plan (SSB) Election Statement for Former Spouse Coverage.
4. DD Form 2656-2: Survivor Benefit Plan (SBP) Termination Request.
5. DD Form 2656-5: Reserve Component Survivor Benefit Plan (RCSBP) Election Certificate.
6. DD Form 2656-6: Survivor Benefit Plan Election Change Certificate.
7. DD Form 2656-7: Verification for Survivor Annuity.
8. DD Form 2656-8: Survivor Benefit Plan (SBP) — Automatic Coverage Fact Sheet.
You're required to complete and return the Reserve Component Survivor Benefit Plan Election Certificate. Keep the other forms, and let your beneficiary know about them. They're available in case you have to fill them out and turn them in at a later date.
Army Human Resources Command “20 Year letter” and “Reserve Component Survivor Benefit Plan” mailing packet.
Army Regulation 600-8-7, Retirement Services Program.
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