Posted on: Monday, June 21, 2004
MILITARY UPDATE
Pentagon battles rise in benefits
By Tom Philpott
Defense officials, in a late-hour attempt to persuade the Senate not to join the House in voting to raise military survivor benefits, said the case for doing so has been built on a series of "mistaken assertions."
They also cautioned senators about the cost of enhancing the Survivor Benefit Plan — $5 billion in defense spending over 10 years and a $20 billion increase in unfinanced liabilities for the military retirement fund.
Lee Lange, a survivor benefit expert with the Military Officers Association of America, said he disagreed with many of the arguments being made to the Senate Armed Services Committee as a floor vote neared.
MOAA, the Fleet Reserve Association and other service groups who advocate phasing out the sharp drop in SBP payments that occurs at age 62 had pressed for support from Congress, arguing three major points:
Defense officials challenged each of these claims in papers provided to the armed services panel.
The DoD effort is aimed at blocking an amendment to the 2005 defense authorization bill (S. 2400) from Sen. Mary Landrieu, D-La., that would phase out the age-62 offset by April 2008. The House, in its defense bill, already has approved a nearly identical amendment.
Taking aim at the claim that SBP enrollees were not briefed on the benefit drop at 62, defense officials compiled an inch-thick copy of brochures, handouts and other informational materials dating to 1972.
But Lange said service associations have heard from hundreds of retirees and survivors who say they weren't briefed on the offset.
To the charge that the government subsidized 40 percent of SBP costs when the program began, and should again, defense officials said the size of the subsidy has no impact on promised benefits or prescribed premiums.
It is true that, with retirees living longer, the subsidy has fallen below 20 percent for regular retirees, defense officials said. For other groups, including disabled retirees, active-duty decedents and reservists who retire at 60, the SBP subsidy is well above 40 percent. Because the Landrieu amendment would raise benefits sharply for almost all groups, a more focused response is needed, officials said.
Lange, however, noted that most SBP participants are nondisabled retirees whose subsidy today is 19 percent.
Regarding the claim that military SBP is unfair, compared with federal civilian plans, DoD officials said comparisons are inappropriate given the differences in retirement plans.
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