WEEKLY SENATE UPDATE

The federal government through the Survivor Benefit Plan (SBP) promised the spouses of military retirees that if they contribute a certain amount each month, then a nest egg would be there after the retiree's death. What they didn't say was that the amount would drop by about one-third once the surviving spouse turned age 62.

Those widows or widowers received an annuity equal to 55 percent of the service member's retirement pay. That is, until they turn 62. At that time, a surviving spouse's SBP benefits must be reduced either by what they receive from Social Security, or a reduction in payments to 35 percent of retired pay--a drop of almost 40 percent--simply because they have reached the age of 62.

For example, let's take the widow of a Navy chief petty officer who had served 20 years before retiring. Before she reaches 62, this widow will receive $786 per month, but on her 62nd birthday, that benefit drops to only $500 per month--a loss of $2,432 per year.

For a retired Marine Corps lieutenant colonel, the widow's benefit would drop by $6,960 a year as soon as she turns 62. That is quite a birthday gift.

Does this make sense? Clearly not, as 62 is an age when most people are considering retirement and need to rely on their benefits more than even.

Originally, the Congress intended the government to subsidize 40 percent of the cost of military Survivor Benefit Plan premiums--similar to the government's contribution to the federal civilian plan. Over the last several decades, however, there has been a significant decline in the government's cost share, and Department of Defense actuaries advise that the government subsidy is now down to less than 20 percent. This means that military retirees are now paying more than 80 percent of program costs from their retired pay versus the intended 60 percent.

But the inequities don't stop there. The military Survivor Benefit Plan does not measure up to the civilian federal Survivor Benefit Plan in terms of benefits paid to survivors. Survivors of federal civilian retirees under the original Civil Service Retirement System receive 55 percent of their spouse's retired pay for life--with no drop in benefits at age 62. Under the newer Federal Employee Retirement System, survivors still receive 50 percent of retired pay for life, again with no drop at age 62.

Thankfully and rightly, the Congress acted to finally correct this gross injustice to the survivors of our nation's military retirees. A provision I cosponsored with Senator Mary Landrieu (D-LA), the Military Survivor Benefits Improvement Amendment, was included in the 2005 Defense Authorization bill makes good on a promise that the Congress made over 30 years ago to honor the memories of our soldiers by helping their families through retirement.

With the support of thirty-six military and veterans groups, the final provision will raise, over a 3-and-a-half year period, the percentage of the retirement benefit received by the survivor from 35 percent to 55 percent after age 62. During the first year, an open enrollment period will be held to allow new enrollees to sign up for the program in order to reduce retired pay outlays by increasing deductions of SBP premiums from retired pay, thus offsetting part of the cost of the survivor benefit increase.

Beginning on Oct. 1, 2005, the SBP benefit would increase to 40 percent of retired pay at the age of 62, followed by additional increases to 45 percent on April 1, 2006, 50 percent on April 1, 2007 and 55 percent on April 1, 2008 after which all survivors would receive the 55 percent of the annuity. For Maine’s 1,604 veteran survivors - nearly quadruple the number of disable veterans eligible for concurrent receipt - this will provide the necessary support and relief to help them live their lives.

For our veterans and their families, I am pleased to thank them by having the federal government live up to its promise. These military spouses are the living legacy of our veterans and deserve nothing less than the support they have so rightly earned.