Applicable to: Air National Guard and Air Force Reserve
Airmen do not pay for this program until they reach retired pay eligibility, and start drawing retired pay. The monthly cost will be withheld from pay and will be based on the pay tables in effect at that time. As active-duty pay raises are applied to reserve pay, cost will increase, and beneficiaries' annuity will increase proportionately.
There is no additional cost to cover children under a spouse and child election, unless the child will be an eligible beneficiary when the Airman reaches retired pay eligibility, and start drawing retired pay.
If Airmen lose their spouse through death or divorce before retired pay eligibility, and have no beneficiary when they reach retired pay eligibility, there is no cost for the Plan. If beneficiary dies after the Airman receives retired pay, the cost stops.
There will always be a small cost deducted from retired pay if Airmen elect children only coverage even though the child is no longer an eligible beneficiary when they reach retired pay eligibility, and start drawing retired pay.
However, there is no cost deduction if the child dies while still an eligible beneficiary.
There are two possible costs associated with RCSBP: Basic SBP and RCSBP cost. These costs are not paid until the Airman begins receiving retired pay.
Basic SBP Cost (All RCSBP elections have a basic SBP cost)
Spouse/Former Spouse:
If the SBP base amount is $1,600 or less, then the monthly SBP cost is 2.5 percent of the first $747 plus 10 percent of the remainder. If the SBP base amount is $1,601 or more, then the monthly SBP cost is 6.5 percent of the SBP base amount.
Children:
The cost to cover children is also based on a percentage of the SBP base amount. Cost depends on the Airman's age, the age of the youngest child and the age of the spouse (if applicable).
Insurable Interest:
The cost is 10 percent of full monthly retired pay, plus 5 percent for each full 5 years the beneficiary is younger than the Airman. However, the total cost cannot exceed 40 percent of monthly retired pay. If Airmen are younger than the beneficiary, the monthly cost is 10 percent of retired pay, plus an actuarial cost based on their age and the beneficiaries' age.
Note: Because of the possible high cost of insurable interest coverage, Airmen are encouraged to contact their Military Personnel Section or ARPC for computation of costs.
RCSBP Cost
If RCSBP Option B (Deferred Annuity) or Option C (Immediate Annuity) is elected, there is a Reservist Portion cost added to the basic cost to cover the additional benefit and assured protection should the Airman die before drawing retired pay. The Reservist Portion cost is based on a percentage of the SBP base amount and depends on their age and the age of beneficiary at the time the RCSBP election is made. See "Tools" below for the RCSBP Calculator.
Remarriage
These elections are irrevocable and must be made within one year of the remarriage. If Airmen lose their spouse through death or divorce and later remarry, they have the following options:
- Resume coverage for new spouse.
- If they elected less than full coverage, they may increase coverage up to the maximum allowable.
- Withdraw from participation.
Current spouse must concur if Airmen withdraw. If they previously elected spouse and children coverage, this election will not terminate children coverage. If none of the above options is elected spouse/former spouse will automatically be assumed. These options are not available if former spouse coverage is in effect through a court order.
If Airmen make a former spouse election (other than court ordered) and later acquire a spouse and/or a child, former spouse coverage can be changed to cover the new spouse and/or child. The election change must be received within one year of the date that the spouse and/or child were acquired and meet the following conditions:
- If coverage was voluntarily elected without a written agreement or court order, they only need to submit a new election with former spouse concurrence.
- If the election was made to carry out the terms of a written agreement, a new written agreement allowing the Airman to drop former spouse coverage in favor of spouse coverage, signed by the Airman and former spouse, must be submitted with the election change.
- If the written agreement is part of a court order, a court order which modifies the provisions of all previous court orders relating to the agreement must be submitted with the election change.
Discontinuation
Once receiving retired pay, Airman has a one year-period beginning on the second and ending on the third anniversary to discontinue participation in the SBP (Section 641, Public Law 105-85, effective 17 May 17 1998). Although the SBP portion may be discontinued, the Reserve Component (RCSBP) portion will continue until age 70 and a total of 360 months of paid premiums (Title 10, Section 1448a). If eligible, Airmen must submit a DD Form 2656-2, Survivor Benefit Plan (SBP) Termination Request (DD form 2656-2), to the appropriate DFAS address shown on the form. The form is available at the above hyperlink and at all MPS/FSSs.
If participation is discontinued:
- There will be no refund of premiums properly collected.
- No benefits will be paid in conjunction with your previous participation.
- May not resume participation for any reason.
Medical Care
Coverage begins on the anniversary of the Airman 60th birthday.
Base Exchange (BX) and Commissary Privileges
If Airmen die before reaching age 60, their spouse and eligible children will be entitled to unlimited commissary and BX privileges.
Dependency and Indemnity Compensation (DIC)
The RCSBP annuity of a spouse will be reduced by the amount the spouse receives as Dependency and Indemnity Compensation. Spouse will be eligible for DIC payments only if the Airman dies of a service-connected cause. In the event the DIC payment is greater than the RCSBP annuity, the annuity will not be paid. If Airmen are receiving retired pay at the time of death, surviving spouse will receive a refund of all premiums paid. When part of an RCSBP annuity is offset by DIC, premiums for the offset portion are refunded. The combined income amount will always be at least equal to the full amount otherwise payable under RCSBP.
Consumer Price Index Adjustment
Once Airmen start receiving retired pay, pay is Consumer Price Index (CPI) adjusted. Cost for RCSBP coverage and the survivor annuity is also CPI adjusted.
State Estate Tax Laws
Certain states require the annuity to the surviving beneficiary be included for estate tax purposes. Airmen should check state's estate tax laws to determine if their state has this requirement.
Federal Income Tax
The amounts withheld from an individual's retired pay for RCSBP coverage are excluded from gross income for federal income tax purposes. The monthly annuity paid to the beneficiary is subject to inclusion in gross income for federal income tax. The federal estate tax depends upon a member's specific RCSBP election. For "spouse only" elections the value of any survivor annuity inculpable in the decedent's gross estate that passes solely to the widow will qualify for the marital deduction and is not subject to the federal estate tax.
RCSBP Versus Civil Service Survivor Benefits
An individual who is eligible for retired pay under Title 10, United States Code, Section 12731, and elects survivor benefit coverage under the RCSBP, may also elect survivor benefit coverage from his/her civil service retirement income. There is no conflict of interest which would prohibit the election of survivor benefit coverage from Reserve retirement and civil service retirement simultaneously.
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