The Reserve Component Survivor Benefit Plan allows retiring reserve and Guard members to allocate, upon their death, a portion of their retired pay to a spouse or other beneficiary. Like retirement pay, RCSBP benefits are inflation protected, making the coverage a good investment. However, understanding enrollment options and how to calculate the premium amounts can be confusing, so it’s important to understand how the RCSBP works in order to make the best decision when the time comes.
For a Guard or reserve member, knowing when to make an enrollment decision is key. Once you reach eligibility for retirement and receive your notification of eligibility for a non-regular reserve retirement, you have 90 days to make an RCSBP enrollment election.
Enrollment period - Reserve members who reach their retirement eligibility will receive a notification of eligibility retirement letter, which includes an RCSBP enrollment form. When you receive this letter, you have 90 days to respond. If you do not respond within this period, you will be automatically covered at the maximum level (if you have an eligible spouse or child). If you don’t want the maximum level, you must make an election within ninety days. If you elect less than RCSBP Option C, full base amount for spouse, you must have your spouse’s concurrence or the RCSBP election will default to Option C, full base amount for spouse. The only exception is if the election is for former spouse. There is no spouse concurrence required for a former spouse election.
Beneficiaries. The following persons are eligible beneficiaries for enrollment:
- Spouse - The annuity is paid to your spouse for life, unless your spouse remarries before the age of 55.
- Spouse and children - Your spouse is the primary beneficiary, and your children are only beneficiaries when the spouse loses RCSBP eligibility. For spouse and children, all eligible children are RCSBP beneficiaries under this election.
- Children only - Children are eligible up to age 18, or 22 if full-time, unmarried students. The 55 percent annuity is divided equally among eligible children. Child coverage offers excellent protection for totally incapacitated children, since the 55 percent annuity is payable to them for life. However, the RCSBP for a totally incapacitated child may have an adverse affect on other benefits the child receives due to disability.
- Former spouse or former spouse and children - The former spouse is the primary beneficiary, and the children are only the beneficiaries if the spouse loses eligibility. For former spouse and children, only the children of the marriage to the member are eligible.
- Person with insurable interest - This election can be made by a retiring unmarried member with one or no eligible children. A retiring unmarried member with only one eligible child may elect insurable interest for that child. If insurable interest is for a relative with a closer relationship than a cousin, no proof of financial interest is required. All other insurable interest beneficiaries must show a financial interest in the retiring member.
Enrollment options - You may make one of three choices for your coverage:
- Option A - Decline to make an election on RCSBP coverage until age 60 when you are eligible to receive retired pay. By doing this, you forfeit any coverage if you die between your retirement eligibility date and age 60.
- Option B - Choose benefits to begin after your death on the date you would become age 60.
- Option C - Choose benefits to begin immediately upon your death, regardless of your age.
Base amount - The premium amount for an insurable interest is considerably more - 10 percent of gross retired pay plus 5 percent for every five years the beneficiary is younger than the retiree (to a maximum of 40 percent).
Base amount - The base amount is the amount of your retirement pay you choose to cover under RCSBP. You may choose any amount between $300 and your full retirement pay. Your beneficiary’s annuity is based on the base amount you choose. For example, if you choose $1,000 as your base amount, your beneficiary will receive an annuity of 55 percent or $550 per month upon your death.
Monthly premiums and benefit amounts
The premiums and benefit amounts are calculated as a percentage of the base amount you choose. Premiums and benefit payments are adjusted annually by the same percentage as military retired pay.
Monthly costs - Because Guard and reserve members don't pay retirement premiums until age 60, the premiums are higher than the premiums for active duty service members. The Army's Human Resources Command has a calculator that can help determine premium amounts for reservists.
SBP basic premium - Generally, the monthly premium is about 6.5 percent of your base amount.
Reserve Component costs - Reservists pay an additional premium, because they do not pay during the years between retirement eligibility and age 60. The RC premium is based on the member's age, as well as the beneficiary's age.
Costs of children - The benefit amounts for children coverage are determined by the age difference between the retiree and the youngest child at the time of enrollment. Premiums usually cost about 2.5 percent of the base amount, but may vary. Premiums will automatically stop when the youngest child beneficiary loses eligibility (at the age of 18, or 22 for full-time students).
Cost for an insurable interest - The premium amount for an insurable interest is considerably more - 10 percent of gross retired pay, plus 5 percent for every five years the beneficiary is younger than the retiree (to a maximum of 40 percent).
Benefit amounts - The benefit amount paid to your beneficiary is 55 percent of the chosen base amount. If more than one child is enrolled, the benefit amount is divided equally among all the children. If children are enrolled with a spouse or a former spouse, the payments are divided equally among all beneficiaries.
Making changes to RCSBP
Discontinuing SBP coverage - Between the second and third year following the date you began to receive retired pay, you may, with your spouse's concurrence, choose to terminate your SBP coverage. However, once you terminate SBP, it cannot be reinstated. When you terminate SBP coverage your SBP premiums stop, but you continue to pay RCSBP premiums for coverage already received but not paid for. Coverage and RCSBP/SBP premiums will be discontinued for spouse coverage if you no longer have an eligible spouse or former spouse. Child SBP premiums will stop when you no longer have an eligible child beneficiary, but RCSBP premiums for child will continue. Coverage for an insurable interest may be discontinued at any time and SBP premiums will stop, but the RCSBP premiums will continue unless the insurable interest beneficiary died.
Divorce and remarriage - If you get a divorce, you may suspend spouse RCSBP coverage. Coverage for your children will continue, but will be recalculated as children-only coverage. When you remarry, your election must be made within one year of your marriage, or your new spouse will automatically be covered at the same level as your former spouse. Below are the three options for remarriage:
- You may resume SBP coverage for your new spouse at the prior level.
- You may elect not to renew coverage.
- You may increase coverage for your new spouse, if the prior coverage was less than the maximum level.
If you declined RCSBP coverage for your spouse at receipt of your notification of eligibility for reserve retirement, you will not be able to add coverage for a new spouse.
If you had no spouse at initial RCSBP election, you have one year from the first marriage following retirement to request RCSBP for the new spouse. If you do not take action within one year, you will close RCSBP for that spouse and any future spouse.
Open enrollments - On rare occasions, open enrollment periods are offered to eligible retirees. During this time, retirees who are not participating in RCSBP may elect coverage for eligible beneficiaries, but they must pay premiums retroactive to their eligibility date to first make the RCSBP election. Retirees who are currently participating may add an eligible beneficiary or increase the amount of coverage.
U.S. Army Human Resources Command - This site will help you calculate your retirement, as well as your RCSBP premium.
Military Officers Association of America - Call 800-245-8762 or download their booklet entitled "Security on Call: Survivor Benefit for Guard and Reserve."
Your installation's support services - Your Fleet and Family Support Center, Marine Corps Community Services, Airman and Family Readiness Center, or Army Community Service Center can provide you with information and support.
Military OneSource - This free 24-hour service is available to all active duty, Guard and reserve members and their families. Call 800-342-9647.