REVISED PREMIUM COMPUTATION FOR SURVIVOR BENEFIT PLAN ANNUITIES

SEC. 1402. REVISED PREMIUM COMPUTATION FOR SURVIVOR BENEFIT PLAN ANNUITIES (a) Revision in Retired Pay Reduction.—Subsection (a) of section 1452 of title 10, United States Code, is amended by striking out the matter preceding paragraph (2) and inserting in lieu thereof the following: “(a) Spouse and Former Spouse Annuities.— “(1) Required reduction in retired pay.—Except as provided in subsection (b), the retired pay of a participant in the Plan who is providing spouse coverage (as described in paragraph (5)) shall be reduced as follows: “(A) Standard annuity.—If the annuity coverage being provided is a standard annuity, the reduction shall be as follows: “(i) Disability and nonregular service retirees.— In the case of a person who is entitled to retired pay under chapter 61 or chapter 67 of this title, the reduction shall be in whichever of the alternative reduction amounts is more favorable to that person. “(ii) Members as of enactment of flat-rate reduction.—In the case of a person who first became a member of a uniformed service before March 1, 1990, the reduction shall be in whichever of the alternative reduction amounts is more favorable to that person. “(iii) New entrants after enactment of flat-rate reduction.—In the case of a person who first becomes a member of a uniformed service on or after March 1, 1990, and who is entitled to retired pay under a provision of law other than chapter 61 or chapter 67 of this title, the reduction shall be in an amount equal to 6^ percent of the base amount. “(iv) Alternative reduction amounts.—For purposes of clauses (i) and (ii), the alternative reduction amounts are the following: “(I) An amount equal to 6 ½ percent of the base amount. 103 STAT. 1578 “(II) An amount equal to 2½ percent of the first $337 (as adjusted after November 1, 1989, under paragraph (4)) of the base amount plus 10 percent of the remainder of the base amount. “(B) Reserve-component annuity.—If the annuity coverage being provided is a reserve-component annuity, the reduction shall be in whichever of the following amounts is more favorable to that person: “(i) An amount equal to 6½ percent of the base amount plus an amount determined in accordance with regulations prescribed by the Secretary of Defense as a premium for the additional coverage provided through reserve-component annuity coverage under the Plan. “(ii) An amount equal to 214 percent of the first $337 (as adjusted after November 1, 1989, under paragraph (4)) of the base amount plus 10 percent of the remainder of the base amount plus an amount determined in accordance with regulations prescribed by the Secretary of Defense as a premium for the additional coverage provided through reserve-component annuity coverage under the Plan.” . (b) Persons Providing Spouse Coverage.—Such subsection is further amended by adding at the end the following new paragraph: “(5) For the purposes of paragraph (1), a participant in the Plan who is providing spouse coverage is a participant who— “(A) has (i) a spouse or former spouse, or (ii) a spouse or former spouse and a dependent child; and “(B) has not elected to provide an annuity to a person designated by him under section 1448(b)(1) of this title or, having made such an election, has changed his election in favor of his spouse under section 1450(f) of this title.”, (c) Conforming Amendment.—Subsection (a)(4) of such section is amended by striking out “amount under paragraph (1)(A)” in subparagraphs (A) and (B) and inserting in lieu thereof “amounts under paragraph (1)”. (d) Recomputation of SBP Premium for Current Participants,— (1) Recomputation.—The Secretary concerned shall recompute the SBP premium of persons described in paragraph (2), Any such recomputation shall take effect on March 1, 1990. (2) Persons covered.—A person referred to in paragraph (1) as described in this paragraph is a person who on March 1, 1990— (A) is entitled to retired pay; (B) is providing spouse coverage (as described in paragraph (5) of section 1452 of title 10, United States Code, as added by subsection (b)); and (C) is subject to an SBP premium in excess of 614 percent of the base amount of that person under the Survivor Benefit Plan. (3) Amount of recomputed premium.—The amount of an SBP premium recomputed under this subsection shall be 614 percent of the base amount under the Survivor Benefit Plan of the person whose premium is recomputed. (4) SBP premium defined.—For purposes of this subsection, the term “SBP premium” means a reduction in retired pay under section 1452 of title 10, United States Code.