SBP Base Amount

bleacherspy

PEB Forum Veteran
Registered Member
#1
I can't find the answer anywhere online so I hoping someone knows here.

Is your base amount for SBP based on you retirement pay for time in service only or the disability base for medical retirement pay if it is higher than your time in service. Here's an example.

If time in service is 22 years, the full SBP base would be 55% of high-3. If medically retiring and given a DoD rating of 100% then would the base move to 75% of high-3 pay since that's what you will be getting?
 

pittpan2005

PEB Forum Veteran
#3
10 U.S.C. 1447
(6)Base amount.—The term “base amount” means the following:
section 1409(b)(2) of this title) to which the person—
(i) was entitled when he became eligible for that pay; or
(ii) later became entitled by being advanced on the retired list, performing active duty, or being transferred from the temporary disability retired list to the permanent disability retired list.

10 U.S.C 1451(a)(1)
(A)Beneficiary under 62 years of age.—
If the beneficiary is under 62 years of age or is a dependent child when becoming entitled to the annuity, the monthly annuity shall be the amount equal to 55 percent of the base amount.

Hopefully this clarifies it for you.
 

AaronJM1984

PEB Forum Veteran
Registered Member
#4
If you are medically retired before 20 years and choose to receive VA disability over DoD retirement pay then it would make no sense to have the SBP correct? The SBP only covers DoD retirement money right?
 

pittpan2005

PEB Forum Veteran
#5
If you are medically retired before 20 years and choose to receive VA disability over DoD retirement pay then it would make no sense to have the SBP correct? The SBP only covers DoD retirement money right?
It is not an easy question. You really have to look into the "trifecta." The three being SBP, DIC, and life insurance.
 

AaronJM1984

PEB Forum Veteran
Registered Member
#6
It is not an easy question. You really have to look into the "trifecta." The three being SBP, DIC, and life insurance.
I'm think that since I have 500k insurance through a civilian provider and intend to get the additional 200k through the military, I think my wife would be okay. Hopefully someone else can chime in as well.
 

pittpan2005

PEB Forum Veteran
#7
I'm think that since I have 500k insurance through a civilian provider and intend to get the additional 200k through the military, I think my wife would be okay. Hopefully someone else can chime in as well.
To your original point: if you passed away, despite receiving VA compensation in lieu of DoD, SBP would trigger the DoD pension. If VA DIC came through, the two would offset one another. Receipt of VA compensation doesn't preclude SBP payments. A few years back I completed a detailed analysis of SBP, DIC, and life insurance. Ultimately, it is a personal choice. I did not believe the SBP would provide much support, whereas life insurance would. But, I still have a date set when I will stop paying for life insurance. VA DIC is dicey...no guarantees. I did not want to rely on it.
 

AaronJM1984

PEB Forum Veteran
Registered Member
#8
To your original point: if you passed away, despite receiving VA compensation in lieu of DoD, SBP would trigger the DoD pension. If VA DIC came through, the two would offset one another. Receipt of VA compensation doesn't preclude SBP payments. A few years back I completed a detailed analysis of SBP, DIC, and life insurance. Ultimately, it is a personal choice. I did not believe the SBP would provide much support, whereas life insurance would. But, I still have a date set when I will stop paying for life insurance. VA DIC is dicey...no guarantees. I did not want to rely on it.
Thank you, no one else has really been able to explain it. I appreciate it seriously!
 

bleacherspy

PEB Forum Veteran
Registered Member
#9
Aaron, you are correct in many ways about life insurance. It really depends on how much you think you need. The comments from the other on DIC and SBP are also spot on. Hopefully Congress will due something about the DIC/SBP offset soon, aka, widow's tax.

From my research, it appears that SBP is the best option if you don't think you can get life insurance from a civilian company post retirement. In my case, I won't qualify for outside life insurance due to the conditions I have. So for me, the best option is to convert SGLI to VGLI and take the full amount of SBP. That comes out to the equivalent of 1.7M if something happens to me in the next five years. That may sound like a lot, but if you start doing the math that money goes pretty fast.
 

AaronJM1984

PEB Forum Veteran
Registered Member
#10
Aaron, you are correct in many ways about life insurance. It really depends on how much you think you need. The comments from the other on DIC and SBP are also spot on. Hopefully Congress will due something about the DIC/SBP offset soon, aka, widow's tax.

From my research, it appears that SBP is the best option if you don't think you can get life insurance from a civilian company post retirement. In my case, I won't qualify for outside life insurance due to the conditions I have. So for me, the best option is to convert SGLI to VGLI and take the full amount of SBP. That comes out to the equivalent of 1.7M if something happens to me in the next five years. That may sound like a lot, but if you start doing the math that money goes pretty fast.
I agree, my financial advisor concluded that my family would need roughly 900k if I was to pass in order to continue the same quality of life.
 

bleacherspy

PEB Forum Veteran
Registered Member
#11
So got the official answer today to my question in the mail today from DFAS. SBP is based on the highest level of pay you are entitled to. Chaps and pittpan were dead on. Thanks!
 

gsfowler

Staff Member
PEB Forum Veteran
#12
Your retiree account summary will list out what your base amount is. You can retrieve this from MyPay.

It is important to understand the the SBP is an annuity which has a fixed payment that is calculated based upon risk when you retire.

My cost is $88.09 per month and after 360 months it would be considered paid in full (this amount is just under $32K). My wife is 12 years younger than me therefore if we were assumed to live to the same age she would receive just over $116K on a $32K investment.
 

Primary Alternate

PEB Forum Veteran
Registered Member
#13
Not trying to hijack here but I have a question regarding above. So what would happen in a scenario where a national guard member is medically retired but can't draw until 60? How is SBP calculated for premiums? I was told that for medical retirees, our tricare never increases. True or false info given?
 

gsfowler

Staff Member
PEB Forum Veteran
#14
Not trying to hijack here but I have a question regarding above. So what would happen in a scenario where a national guard member is medically retired but can't draw until 60? How is SBP calculated for premiums? I was told that for medical retirees, our tricare never increases. True or false info given?
For a NG/Reserve member, the SBP is calculated the same. The plan is a annuity and you are basically insuring your future payment for your spouse. The payout is still 55% of your retired pay base.

As far as Tricare premiums, I am not sure and will have to check into it and get back to you. I have Tricare for Life so my only expense is my Medicare Part B cost.
 

Primary Alternate

PEB Forum Veteran
Registered Member
#15
Thank you. I'm hearing all sorts of stories, some true and other not so much. I'm in a unique situation (19 AGR years, 20+ total years) so trying to figure all this out. I had a guy tell me the other day that once a NG member hits 15 years AGR and if medically retired, draws immediately even if not 60. I need to sit down with OAC and get the skinny because I want to make sure my family is financially stable should something happen to me and the VGLI gets expensive as we get older. I'm looking at the possibility of getting a private health insurance but not sure I am insurable and if I am, the rates would be through the roof. Kinda stuck. And then there's the SBP. Would that be 55% of my AGR pay or my ANG retired pay, which wouldn't be until another 15 years (60 yrs old). Questions, questions!
 

gsfowler

Staff Member
PEB Forum Veteran
#16
You asked two separate questions so I will address them separately.

1.) Survivors Benefit Plan

It is 55% of your active duty of medical retirement pay, which would be calculate the same for both active duty and reservists. (not your non-regular reserve retirement)

Your retirement pay base is the greater of either a.) your top three times you DoD disability rating, or your top three x 2.5 x your years in service.

The actual premium for the SBP is calculated through a formula that includes your age and the age of your spouse.

2.) AGR Retirement

Getting to the second part of your question, I have read where AGR member now qualify for TERA instead of medical retirement.

Read this: http://boards.law.af.mil/ARMY/BCMR/CY2004/20040002547C070208.doc

I believe you should be able for TERA and subsequently receive VA Compensation and Pension concurrently, however I highly suggest that you run this by legal counsel for verification.
 
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Primary Alternate

PEB Forum Veteran
Registered Member
#17
Thank you for your replies and the TERA reference. That document is certainly a good read and interesting to say the least. I will discuss with OAC and see if the program is an option.
 
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