Survivor Benefit Plan. An Analysis of Direct Remittances Diverted to the U.S. Treasury.

The Survivor Benefit Plan is a voluntary program designed to provide income protection for dependent survivors of members of the armed forces who die in retirement or while on active duty after reaching retirement eligibility. Obligations of the Federal government, arising under the Survivor Benefit Plan, to survivors are paid from the Military Retirement Fund. United States Code Title 10, Section 1452 requires persons participating in the Plan, and not entitled to retired pay, must deposit in the U.S. Treasury vice the Military Retirement Fund the premium payments that would otherwise have been deducted from their retired pay for that period. The member is required to pay premiums due to the Plan through a process called direct remittance. This thesis determined the annual amount of direct remittances arising from the Survivor Benefit Plan, and analyzed the financial loss to the Military Retirement Fund due to the diversion of these funds to the U.S. Treasury. An understanding of this process and the unique problems that direct remittances from the Survivor Benefit Plan represent provides a valuable contribution to understanding the accounting and valuation process of the Military Retirement Fund.