The Survivor Benefit Plan: Getting What Was Promised and Paid For

April 6, 2004

The Survivor Benefit Plan (SBP) was established by Congress in 1972 to provide a monthly income to survivors of retired military personnel upon the servicemember's death. The plan replaced earlier programs that were far too costly for the average servicemember. SBP was originally intended to provide an annuity to the surviving spouse equal to 55 percent of the deceased servicemember's covered military retired pay. Congress set the premium formula in law intending that retireesí monthly premium payments would cover 60 percent of the long-term costs of the survivor benefit and the government would pay the remaining 40 percent. The formula was based on program cost assumptions prepared by Department of Defense actuaries who took into account indicators such as future inflation rates, pay raises, and the longevity of retirees and survivors.