Retirees considering enrollment in the Survivor Benefit Plan (SBP) during ongoing open season no longer can receive an official estimate of their “Buy-In Premium” before the Jan. 1 deadline, but new plan details offer some details on possible costs.

These premium amounts vary based on how long a retiree has been out of uniform, as well as what type (spouse or spouse and child) and amount of coverage is requested. An example sheet published last month by the Defense Finance and Accounting Service (DFAS) gives some idea of the significant cost range – a retiree who left service three years ago seeking a base amount of $4,000 in spouse coverage would pay less than $9,000 to enroll, while a retiree out of service for 21 years seeking a base amount of $6,000 in spouse coverage would pay more than $112,000.

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SBP Basics

The open season is available to retirees who were not enrolled in SBP or Reserve Component Survivor Benefit Plan (RCSBP) as of Dec. 22, 2022, and wish to enroll, and to those who were enrolled in such plans as of that date but want to discontinue coverage. No other plan changes or updates are part of open season.

Survivors of SBP recipients receive 55% of whatever “base amount” of pay is chosen. The Buy-In Premium includes 6.5% of that amount, along with adjustments added to preserve the actuarial soundness of the Military Retiree Fund. This figure differs based on the number of months since retirement.

For example, someone who retired in June 2018 and wanted to enroll would have a buy-in factor of 57.25. If they wanted to cover their entire retired monthly pay of $4,750, the calculation for their buy-in premium would be: $4,750 x 6.5% x 57.25 = $17,675.94.

Going forward, the monthly SBP premium would be $308.75 ($4,750 x 6.5%). A survivor would get $2,612.50 per month, which is equal to 55% of the base amount. 

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Updated Application Process

When open season began, applicants were asked to request a cost estimate for their specific SBP request from DFAS via a Letter of Intent, which would allow the service to calculate their premium. That request was supposed to take about a month to process, but DFAS later updated their website to say no further letters could be accepted after Nov. 13, and that those received after Nov. 1 may not be answered prior to the enrollment deadline.

Instead of submitting the letter, retirees interested in SBP enrollment must submit an enrollment form and choose a payment method for their Buy-In Premium – a lump sum, 12 equal monthly payments, or a combination of the two – before Jan. 1. Applicants will receive enrollment confirmation from DFAS, along with instructions on how to submit payments, and have 30 days from the date of enrollment to cancel. The cancellation must be in writing and must be received by DFAS within the 30-day window.

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The update does not affect deadlines for those seeking to discontinue SBP coverage, which involves only the submission of a discontinuance form to the proper pay agency. While the forms can be submitted by mail, you can also fax materials to DFAS (800-469-6559) or use the askDFAS online upload tool.

The Coast Guard’s Pay and Personnel Center, which processes retiree and survivor payments for the commissioned corps of both the U.S. Public Health Service and NOAA, has a similar enrollment process and has not updated its online guidance. Currently serving Guard and Reserve members should contact their branch of service for information.