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Legislative UPDATE
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Each aggregate of 90 days’ active duty service yields three months’ early retirement but only if the call-up time is served within a single fiscal year. Conse- quently, many operational reservists are losing the credit. For example, a 120-day call-up com- mencing Aug. 1 and ending Nov. 30 would receive no early reserve retirement credit because the 90-day clock resets at the start of the fiscal year (Oct. 1). The defense bill permits credit of qual- ifying active service totaling aggregates of 90 days served over two consecutive fiscal years.
The change is an important step to-
ward improving compensation for reserv- ists that matches the enormous increase in the nation’s reliance on them for oper- ational missions. Unfortunately, however, the provision only applies to activations after Sept. 30, 2014. Some reservists with active duty ser- vice performed between Jan. 28, 2008, and Sept. 30, 2014, might lose some or all of their earned early retirement credit. Moreover, Guard and Reserve members who retire early are not eligible for TRI- CARE Standard coverage before age 60. They must pay full-cost TRICARE Retired Reserve premiums if they wish to meet Affordable Care Act mandates via govern- ment-sponsored health insurance. MOAA also continues to support cred- iting active duty service from Sept. 11, 2001, until Jan. 27, 2008, but the $2 bil- lion mandatory spending price tag has deterred lawmakers from taking it up. SBP special needs trust: The defense bill also includes a provision authorizing the payment of Survivor Benefit Plan (SBP) annuities into a special needs trust for per- manently disabled dependent children. A special needs trust prevents income means-testing for assistance provided by state governments and social services.
38 MILITARY OFFICER FEBRUARY 2015
MOAA and its partners have been advo- cating for this change since 2007. The Defense Finance and Accounting Service (DFAS) now must establish and implement the administrative rules nec- essary to accommodate retirees who wish to designate a special needs trust as the recipient of their SBP annuity. This guidance likely will involve solic- iting public comments via a federal regis- ter. MOAA will be monitoring the process to ensure comments and concerns from retirees are considered. Our best guess at this point is DoD will
allow an SBP “open season” to accom- modate this new category of beneficiary. Retirees with a permanently disabled child who elected not to enroll in SBP because of the potential adverse effects of the annuity receipt should be considered for open enrollment. MOAA will provide more information as it becomes available. Special needs trusts are complex, and
any retired servicemember contemplating the use of one should consult with a quali- fied lawyer. MOAA cautions it likely will take months for DFAS to develop guidance.
Obama Taps O
New SecDef Ashton Carter gets the nod.
n Dec. 5, 2014, less than two weeks after the announcement of Chuck Hagel’s resignation as
secretary of defense, President Barack Obama nominated Ashton Carter to replace Hagel. Carter previously served as the deputy
secretary of defense for both Leon Panetta and Hagel. His career includes several stints in the
Pentagon, with time spent as undersecre- tary of defense for Acquisition, Technolo-