First Command News & Media


First Command Reports: Career Military Cool To Survivor Benefit Proposal

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FORT WORTH, Texas — America’s career servicemembers are turning a cold shoulder to a proposal to reform a government insurance plan that pays lifetime monetary benefits to the survivors of military retirees.

The latest results of the First Command Financial Behaviors Index® reveal that the majority of middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) like the military’s current Survivor Benefit Plan better than the Military Compensation and Retirement Modernization Commission’s recent recommendation to create a new option that is fully funded by servicemembers but removes the unpopular Dependency and Indemnity Compensation offset. Roughly two out of three (67 percent) survey respondents say they prefer to be grandfathered in under the current system.

While 58 percent of servicemember families say they are in favor of the new proposal, that broad backing doesn’t necessarily translate into support for the change. The proposal gives existing servicemembers the option of staying with the current Survivor Benefit Plan.

“These survey results show that most career servicemembers are not interested in trading in their current Survivor Benefit Plan for a newer model,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Cost appears to be a significant consideration. A survey by the Military Officers Association of America found that nearly two-thirds of respondents said they would be unwilling to pay higher premiums in exchange for the elimination of the Dependency and Indemnity Compensation offset.”

Under current law, retirees contribute 6.5 percent of pre-tax retired pay for Survivor Benefit Plan coverage. The Military Officers Association of America writes that “survivors who are eligible for both the Survivor Benefit Plan (SBP) and Dependency and Indemnity Compensation (DIC) must forfeit a dollar of their SBP annuity for every dollar of DIC received from the Department of Veterans Affairs (VA). Often, the offset wipes out the SBP annuity for which the military retiree paid.” The Commission’s recommendation to remove the offset would raise retirees’ Survivor Benefit Plan contributions to 11.5 percent.

Retirement benefits are of high interest to career servicemember families. September survey results reveal that 35 percent of respondents say they are being impacted by sequestration-related reductions in retirement benefits.

About First Command Financial Behaviors Index®

Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. Financial Behaviors Index

About Sentient Decision Science, Inc.

Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.

About First Command

First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.


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