When a marriage ends, dividing retirement benefits is only part of the story. In many military divorces, a former spouse who depends on a share of the service member’s retired pay can face a serious gap in support if the retiree dies first—because regular pension payments generally stop at the retiree’s death.
The Survivor Benefit Plan (SBP) is one of the main tools used to protect against that risk. SBP can provide ongoing monthly income to a designated beneficiary after the retiree’s death—but only if the right election is made, and only if deadlines are met. Below is a practical, divorce-focused overview of how SBP works and what to watch for.
What Is the Survivor Benefit Plan?
The Survivor Benefit Plan (SBP) is an annuity program sponsored by the Department of Defense. After a service member retires, SBP can pay a monthly benefit to a designated beneficiary upon the retiree’s death.
Key points:
- The beneficiary may receive up to 55% of the selected “base amount.”
- The base amount is chosen by the retiree (subject to program limits).
- Without SBP coverage, retired pay generally ends when the retiree dies.
SBP can be elected at retirement, and in a divorce context it may also be addressed through a former spouse election (including situations where a court order requires it).
Why SBP Matters in Divorce
In most military divorces, the Uniformed Services Former Spouses’ Protection Act (USFSPA) allows courts to award a former spouse a share of the service member’s disposable retired pay. But that share typically ends when the retiree dies.
That is why SBP often becomes a key negotiation point. If SBP former spouse coverage is properly elected, it can help ensure that monthly payments continue to the former spouse after the retiree’s death, rather than stopping unexpectedly.
Cost of Coverage (Premiums)
SBP premiums are deducted from the retiree’s monthly pension. The cost is often described as typically 6.5% of gross retired pay for full coverage.
Example (full coverage):
- A retiree with a $1,000/month pension would pay about $65/month for full coverage.
Reduced coverage is also possible. For example:
- Selecting a base amount of $700 would lower the monthly premium to roughly $45.50.
One practical impact in divorce cases is that because premiums reduce the retiree’s disposable retired pay, they can also affect the amount available to be divided under the USFSPA.
Election Deadlines (And Why Timing Is Critical)
SBP is deadline-driven. In a divorce, the former spouse must generally be named within one year of the divorce decree.
Key Considerations and Alternatives
1) Life Insurance as an Alternative (or Backup)
Some couples use life insurance to replace or supplement SBP. Life insurance can be tailored to specific goals and, unlike SBP, may continue even if the former spouse remarries.
That said, life insurance premiums depend on age and health, and the cost can be higher than SBP. Also, insurance requires ongoing premium payments and policy management—details that should be addressed clearly in the settlement.
Practical Steps to Protect SBP Rights
- Address SBP during negotiations. If SBP is part of the plan, your property settlement agreement (or judgment) should state clearly:
- Whether former spouse coverage is required, and
- How premiums will be handled.
- File the correct forms promptly. Former spouse elections typically use DD Form 2656-1. Former spouses seeking a deemed election typically use DD Form 2656-10. Submitting the right paperwork on time matters.
- Watch for confirmation from DFAS. Don’t assume it’s done because the court order says so. Keep copies of all paperwork and confirmations, and verify that DFAS processed the election.
- Revisit the plan if remarriage occurs. Former spouse SBP coverage ends if the former spouse remarries before age 55. If remarriage is on the horizon (or has happened), it’s worth discussing whether life insurance or other planning is needed to address the potential loss of SBP income.
Closing Thought
SBP is often the difference between a retirement division that looks fair “on paper” and a plan that actually protects a former spouse long-term. If you’re negotiating a military divorce settlement—or enforcing an order that already requires SBP—make sure the election language, deadlines, and paperwork are handled correctly. A small missed step can have permanent consequences.
If you have questions about how SBP fits into your military divorce, it can help to speak with a lawyer who regularly works with USFSPA retirement division and DFAS requirements, so your agreement is not only well-written, but also workable in practice.
This article is for general informational purposes and is not legal advice.
