Posted on: Monday, June 28, 2004

MILITARY UPDATE
Outlook bright for SBP change

By Tom Phlipott

It might take four years or 10 years or somewhere in between, but the sharp drop in survivor benefits at age 62 for military widows and widowers appears certain to be phased out beginning next year.

Sen. Mary Landrieu, D-La., refused to withdraw her amendment to eliminate the drop in benefits under the military's Survivor Benefit Plan, despite mounting pressure from Senate leaders. Because Landrieu held out, she won a compromise.

For the first time, said Steve Strobridge, director of government relations for the Military Officers Association of America, both House and Senate bills support a significant SBP provision.

The revised Senate amendment, approved by unanimous consent, would phase out the age 62 reduction over 10 years, starting in October 2005, versus 3› years, starting next April, under the House-passed plan that Landrieu's original amendment had embraced.

The other change would impose much higher buy-in costs on retirees who previously had declined SBP but would be tempted to sign up for improved SBP during a planned open season.

Landrieu's original amendment proposed only a modest penalty, no more than 4.5 percent of covered retired pay each month on top of regular premiums of 6.5 percent. That is too low to be fair to retirees who have paid premiums for years or even decades, said Sen. John Ensign, R-Nev.

Ensign proposed instead that retirees coming late to SBP be asked to pay all premiums they would have paid if they had enrolled earlier, plus interest.

Sen. John Warner, R-Va., chairman of the Armed Services Committee and floor manager of the $447 billion defense bill, had signaled his support for Ensign's substitute amendment. Negotiations continued with Sen. Olympia Snowe, R-Maine, playing a role.

Warner and Landrieu finally agreed to the second change, a 10-year phase-in of higher benefits at 62.

"Obviously, we would much prefer the 3›-year phase-in found in the House bill," said Strobridge. "But we have an opportunity to work (on) that in the House-Senate conference."

Victory for disabled

The Senate also approved an amendment from Sen. Harry Reid, D-Nev., to speed restoration of full retired pay to 30,000 military retirees rated 100-percent disabled.

Retirees with service-related disabilities see retired pay reduced, dollar for dollar, by their disability compensation. Congress last year voted for a 10-year phase out of this offset by paying retirees a new concurrent retirement and disability payment. CRDP is to replace lost retired pay to those with combined disability ratings of 50 percent or higher. It began in January. The highest amount, $750 a month, goes to 100-percent disabled retirees.

The Reid amendment would repeal the 10-year phase-out of the offset for 100-percent disabled retirees and allow full restoration of retired pay next January.

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