I 108th CONGRESS 2d Session H. R. 3763 IN THE HOUSE OF REPRESENTATIVES February 4, 2004 Mr. Miller of Florida (for himself, Mr. Bilirakis, Mr. Turner of Ohio, Mr. Snyder, Mr. Rodriguez, Mr. Bachus, Mr. Berry, Mr. DeFazio, Mr. Holden, Mr. Isakson, Ms. Kilpatrick, Mr. Bartlett of Maryland, Mr. Acevedo-Vilá, Mr. Hinchey, Mr. Lampson, Mr. Bishop of Georgia, Mr. Wilson of South Carolina, Mr. Boyd, Mr. Quinn, Mrs. McCarthy of New York, Mr. Evans, Mr. Mica, Mr. King of Iowa, Mr. McGovern, Mr. LaHood, Mr. Simmons, Mr. Vitter, Mr. Grijalva, Mr. Edwards, Ms. Ginny Brown-Waite of Florida, Mr. Ruppersberger, Mr. Fattah, Mr. Scott of Georgia, Mr. Smith of New Jersey, Mr. Foley, Mr. Van Hollen, Mr. Crane, Mr. Goss, Mr. LaTourette, Mr. Paul, Mr. Neal of Massachusetts, Mr. Baker, Mr. Duncan, Mr. Istook, Mr. Jones of North Carolina, Mr. Brown of South Carolina, Mr. Norwood, Mr. Schrock, Mr. Franks of Arizona, Mr. Allen, Mr. Collins, Mr. Lincoln Diaz-Balart of Florida, Mr. Goode, Mr. Murtha, Mr. Matheson, Mr. Michaud, Mr. Strickland, Mr. McIntyre, Mr. Reyes, Mr. Filner, Mr. Meeks of New York, Mr. Pearce, Ms. Hart, Mr. Putnam, Mr. Ney, Mr. Forbes, Mr. King of New York, Mrs. Myrick, Mr. Burgess, Mr. Hayes, Mr. Calvert, Mrs. Jo Ann Davis of Virginia, Mr. Cooper, Mr. Ballance, Mr. Ford, Mr. Rogers of Michigan, Mr. Smith of Washington, Mr. Frost, Mr. Jenkins, Mr. Gutierrez, Mr. Taylor of Mississippi, Mr. Turner of Texas, Mr. Pallone, Mr. Meehan, Mr. Sandlin, Mr. Gillmor, Mr. Sanders, Mr. Menendez, Mr. Wicker, Mr. Owens, Mr. Alexander, Ms. Bordallo, Ms. Hooley of Oregon, Mr. Burton of Indiana, Mr. Whitfield, Mr. English, Mr. Burr, Mr. Brown of Ohio, Mr. Miller of North Carolina, Ms. DeLauro, Mr. Cunningham, Mr. Crowley, Mr. Keller, Mr. Hoeffel, Mr. Gibbons, Mr. Sherman, Mr. Kucinich, Mr. Spratt, Mr. Thompson of California, Mr. Stenholm, Mr. Kennedy of Rhode Island, Mr. Otter, Ms. Harman, Mrs. Musgrave, Mr. John, Mr. Moore, Mr. Peterson of Minnesota, Mr. Lynch, Ms. Norton, Mr. Israel, Mr. Markey, Mr. Kildee, Mr. Udall of New Mexico, Mr. Bishop of New York, Mr. Meek of Florida, Mr. Johnson of Illinois, Mrs. Napolitano, Mr. Ross, Mr. Ortiz, Mr. Kind, Ms. Lee, Mr. Bonner, Mr. Terry, Mr. McInnis, Mr. Udall of Colorado, Mrs. Blackburn, Mr. Engel, Mr. Olver, Ms. Majette, Mr. Hostettler, Mr. Dicks, Mr. McDermott, Ms. Corrine Brown of Florida, Mr. Hastings of Florida, Mr. Pickering, Ms. Millender-McDonald, Mr. Boswell, Mrs. Bono, Mr. Moran of Virginia, Mr. Jefferson, Ms. Waters, Mr. Murphy, Mr. Andrews, Ms. Carson of Indiana, Mr. Cardoza, Mr. Rothman, Mr. Boucher, Mr. Langevin, Mr. Deutsch, Mr. Tanner, Mr. Larson of Connecticut, Mr. Cramer, Ms. Jackson-Lee of Texas, Mr. Boozman, Mr. Weldon of Pennsylvania, Mr. Baird, Mr. LoBiondo, Ms. Berkley, Mr. Souder, Mrs. Miller of Michigan, Mr. Lewis of Georgia, Mr. Porter, Mr. Honda, Mr. Gerlach, Mr. Costello, Mr. Kirk, Mr. Doyle, Mrs. Capito, Mr. Manzullo, Mrs. Davis of California, Mr. Bradley of New Hampshire, Mr. Larsen of Washington, Mrs. Lowey, Mr. Berman, Mr. Lipinski, Mr. Rogers of Alabama, Mr. Tiberi, Mr. Conyers, Mr. Peterson of Pennsylvania, Mr. Oberstar, Mr. Hayworth, Ms. Slaughter, Mr. Serrano, Mr. Jackson of Illinois, Mr. Doggett, Mr. Barrett of South Carolina, Mr. Towns, Mr. Clyburn, Mr. Everett, Mr. Ryan of Ohio, Mr. Gallegly, Ms. Woolsey, Mr. Hall, Mr. Sessions, Mr. McCotter, Mr. Bell, Mr. DeMint, Mr. Kanjorski, Mr. Case, Mr. Shuster, Mr. Ose, Mr. Kingston, Mr. George Miller of California, Mr. Davis of Tennessee, Mr. Inslee, Mr. Neugebauer, Mr. Baca, Mr. Marshall, Mr. Saxton, Mrs. Capps, Mr. Delahunt, Mr. Weiner, Mr. Royce, Mr. Shaw, Mr. Schiff, Mr. Stupak, Mr. Green of Wisconsin, and Mr. Sullivan) introduced the following bill; which was referred to the Committee on Armed Services A BILL To amend title 10, United States Code, to increase the minimum Survivor Benefit Plan basic annuity for surviving spouses age 62 and older, to provide for a one-year open season under that plan, and for other purposes.

1.

Short title

This Act may be cited as the &short-title1;.

2.

Computation of benefits under Survivor Benefit Plan for surviving spouses over age 62

(a)

Phased increase in basic annuity

(1)

Standard annuity

(A)

Increase to 55 percent

Clause (i) of subsection (a)(1)(B) of section 1451 of title 10, United States Code, is amended by striking 35 percent of the base amount. and inserting the product of the base amount and the percent applicable to the month, as follows: (I)For a month before October 2005, the applicable percent is 35 percent. (II)For months after September 2005 and before October 2008, the applicable percent is 40 percent. (III)For months after September 2008 and before October 2014, the applicable percent is 45 percent. (IV)For months after September 2014, the applicable percent is 55 percent. . (B)

Coordination with savings provision under prior law

Clause (ii) of such subsection is amended by striking , at the time the beneficiary becomes entitled to the annuity,. (2)

Reserve-component annuity

Subsection (a)(2)(B)(i)(I) of such section is amended by striking 35 percent and inserting the percent specified under subsection (a)(1)(B)(i) as being applicable for the month. (3)

Survivors of eligible persons dying on active duty, etc

(A)

Increase to 55 percent

Clause (i) of subsection (c)(1)(B) of such section is amended— (i)by striking 35 percent and inserting the applicable percent; and (ii)by adding at the end the following: The percent applicable for a month under the preceding sentence is the percent specified under subsection (a)(1)(B)(i) as being applicable for that month.. (B)

Coordination with savings provision under prior law

Clause (ii) of such subsection is amended by striking , at the time the beneficiary becomes entitled to the annuity,. (4)

Clerical amendment

The heading for subsection (d)(2)(A) of such section is amended to read as follows: Computation of annuity.—. (b)

Corresponding phased elimination of supplemental annuity

(1)

Phased reduction of supplemental annuity

Section 1457(b) of title 10, United States Code, is amended— (A)by striking 5, 10, 15, or 20 percent and inserting the applicable percent; and (B)by inserting after the first sentence the following: The percent used for the computation shall be an even multiple of 5 percent and, whatever the percent specified in the election, may not exceed 20 percent for months before October 2005, 15 percent for months during fiscal years 2006, 2007, and 2008, and 10 percent for months during fiscal years 2009 through 2014.. (2)

Repeal upon implementation of 55 percent sbp annuity

Effective on October 1, 2014, chapter 73 of such title is amended— (A)by striking subchapter III; and (B)by striking the item relating to subchapter III in the table of subchapters at the beginning of that chapter. (c)

Recomputation of annuities

(1)

Periodic recomputation required

Effective on the first day of each month specified in paragraph (2)— (A)each annuity under section 1450 of title 10, United States Code, that commenced before that month, is computed under a provision of section 1451 of that title amended by subsection (a), and is payable for that month shall be recomputed so as to be equal to the amount that would be in effect if the percent applicable for that month under that provision, as so amended, had been used for the initial computation of the annuity; and (B)each supplemental survivor annuity under section 1457 of such title that commenced before that month and is payable for that month shall be recomputed so as to be equal to the amount that would be in effect if the percent applicable for that month under that section, as amended by this section, had been used for the initial computation of the supplemental survivor annuity. (2)

Time for recomputation

The requirement under paragraph (1) for recomputation of certain annuities applies with respect to the following months: (A)October 2005. (B)October 2008. (C)October 2014. (d)

Recomputation of retired pay reductions for supplemental survivor annuities

The Secretary of Defense shall take such actions as are necessitated by the amendments made by subsection (b) and the requirements of subsection (c)(1)(B) to ensure that the reductions in retired pay under section 1460 of title 10, United States Code, are adjusted to achieve the objectives set forth in subsection (b) of that section.

3.

Open enrollment period for Survivor Benefit Plan commencing October 1, 2005

(a)

Persons not currently participating in Survivor Benefit Plan

(1)

Election of sbp coverage

An eligible retired or former member may elect to participate in the Survivor Benefit Plan under subchapter II of chapter 73 of title 10, United States Code, during the open enrollment period specified in subsection (f). (2)

Election of supplemental annuity coverage

An eligible retired or former member who elects under paragraph (1) to participate in the Survivor Benefit Plan at the maximum level may also elect during the open enrollment period to participate in the Supplemental Survivor Benefit Plan established under subchapter III of chapter 73 of title 10, United States Code. (3)

Eligible retired or former member

For purposes of paragraphs (1) and (2), an eligible retired or former member is a member or former member of the uniformed services who on the day before the first day of the open enrollment period is not a participant in the Survivor Benefit Plan and— (A)is entitled to retired pay; or (B)would be entitled to retired pay under chapter 1223 of title 10, United States Code, but for the fact that such member or former member is under 60 years of age. (4)

Status under sbp of persons making elections

(A)

Standard annuity

A person making an election under paragraph (1) by reason of eligibility under paragraph (3)(A) shall be treated for all purposes as providing a standard annuity under the Survivor Benefit Plan. (B)

Reserve-component annuity

A person making an election under paragraph (1) by reason of eligibility under paragraph (3)(B) shall be treated for all purposes as providing a reserve-component annuity under the Survivor Benefit Plan. (b)

Election to increase coverage under SBP

A person who on the day before the first day of the open enrollment period is a participant in the Survivor Benefit Plan but is not participating at the maximum base amount or is providing coverage under the Plan for a dependent child and not for the person’s spouse or former spouse may, during the open enrollment period, elect to— (1)participate in the Plan at a higher base amount (not in excess of the participant’s retired pay); or (2)provide annuity coverage under the Plan for the person’s spouse or former spouse at a base amount not less than the base amount provided for the dependent child. (c)

Election for current SBP participants to participate in supplemental SBP

(1)

Election

A person who is eligible to make an election under this paragraph may elect during the open enrollment period to participate in the Supplemental Survivor Benefit Plan established under subchapter III of chapter 73 of title 10, United States Code. (2)

Persons eligible

Except as provided in paragraph (3), a person is eligible to make an election under paragraph (1) if on the day before the first day of the open enrollment period the person is a participant in the Survivor Benefit Plan at the maximum level, or during the open enrollment period the person increases the level of such participation to the maximum level under subsection (b) of this section, and under that Plan is providing annuity coverage for the person’s spouse or a former spouse. (3)

Limitation on eligibility for certain sbp participants not affected by two-tier annuity Computation

A person is not eligible to make an election under paragraph (1) if (as determined by the Secretary concerned) the annuity of a spouse or former spouse beneficiary of that person under the Survivor Benefit Plan will be computed under section 1451(e) of title 10, United States Code. However, such a person may during the open enrollment period waive the right to have that annuity computed under such section. Any such election is irrevocable. A person making such a waiver may make an election under paragraph (1) as in the case of any other participant in the Survivor Benefit Plan. (d)

Manner of making elections

An election under this section must be made in writing, signed by the person making the election, and received by the Secretary concerned before the end of the open enrollment period. Any such election shall be made subject to the same conditions, and with the same opportunities for designation of beneficiaries and specification of base amount, that apply under the Survivor Benefit Plan or the Supplemental Survivor Benefit Plan, as the case may be. A person making an election under subsection (a) to provide a reserve-component annuity shall make a designation described in section 1448(e) of title 10, United States Code. (e)

Effective date for elections

Any such election shall be effective as of the first day of the first calendar month following the month in which the election is received by the Secretary concerned. (f)

Open enrollment period defined

The open enrollment period is the one-year period beginning on October 1, 2005. (g)

Effect of death of person making election within two years of making election

If a person making an election under this section dies before the end of the two-year period beginning on the effective date of the election, the election is void and the amount of any reduction in retired pay of the person that is attributable to the election shall be paid in a lump sum to the person who would have been the deceased person’s beneficiary under the voided election if the deceased person had died after the end of such two-year period. (h)

Applicability of certain provisions of law

The provisions of sections 1449, 1453, and 1454 of title 10, United States Code, are applicable to a person making an election, and to an election, under this section in the same manner as if the election were made under the Survivor Benefit Plan or the Supplemental Survivor Benefit Plan, as the case may be. (i)

Additional premium

The Secretary of Defense may require that the premium for a person making an election under subsection (a)(1) or (b) include, in addition to the amount required under section 1452(a) of title 10, United States Code, an amount determined under regulations prescribed by the Secretary of Defense for the purposes of this subsection. Any such amount shall be stated as a percentage of the base amount of the person making the election and shall reflect the number of years that have elapsed since the person retired, but may not exceed 4.5 percent of that person’s base amount. (j)

Report concerning open season

Not later than July 1, 2005, the Secretary of Defense shall submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report on the open season authorized by this section for the Survivor Benefit Plan. The report shall include the following: (1)A description of the Secretary’s plans for implementation of the open season. (2)The Secretary’s estimates of the costs associated with the open season, including any anticipated effect of the open season on the actuarial status of the Department of Defense Military Retirement Fund. (3)Any recommendation by the Secretary for further legislative action.