Military Survivor Benefit Plan: Background and Issues for Congress

The Department of Defenses Survivor Benefit Plan (SBP), enacted in 1972, provides cash benefits in the form of a lifetime annuity to a surviving spouse or other eligible recipient(s) of a retiree or deceased member of the uniformed services. The original intent of the SBP (and its antecedents) was to ensure that the surviving dependents of military personnel who die in retirement or after becoming eligible for retirement will continue to have a reasonable level of income. Coverage was later expanded to those who die while on active service. Under the SBP, a military retiree can elect to have a portion of his or her monthly retired pay withheld in order to provide a monthly survivor benefit to a designated beneficiary. The cost of this protection is shared by the retiree (in the form of reductions from monthly military retired pay after retirement), the government, and sometimes the beneficiary (under certain types of coverage). Nearly every Congress since 1972 has, in some way, modified the SBP provisions. These modifications have affected eligibility, the size of the benefit, and the interactions of the benefit with other federal benefits, such as the Department of Veterans Affairs Dependency and Indemnity Compensation (DIC) and Social Security. In nearly every instance, these changes have made the SBP more generous. The programs eligibility requirements and enrollment processes are complex, and modifications over time have added to the complexity. The SBP is administered by the Defense Finance and Accounting Service (DFAS), which provides annuities to approximately a quarter of a million survivors of military servicemembers and retirees. SBP participation and costs have grown over time as Congress has made changes to increase the generosity of the program. In FY2018, survivor pay expenditures totaled $3.7 billion. SBP coverage is provided at no cost for active duty servicemembers.