SURVIVOR BENEFIT PLAN MODIFICATIONS.

SEC. 645. SURVIVOR BENEFIT PLAN MODIFICATIONS.(a) Eligibility of Dependent Children for Survivor Annuities in Cases of Deaths of Members on Active Duty.—(1) Paragraph (2) of section 1448(d) of title 10, United States Code, is amended to read as follows:“(2) Dependent children.—“(A) Annuity when no eligible surviving spouse.—In the case of a member described in paragraph (1), the Secretary concerned shall pay an annuity under this subchapter to the member’s dependent children under section 1450(a)(2) of this title as applicable.“(B) Optional annuity when there is an eligible surviving spouse.—In the case of a member described in paragraph (1) who dies on or after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2004 and for whom there is a surviving spouse eligible for an annuity under paragraph (1), the Secretary may pay an annuity under this subchapter to the member’s dependent children under section 1450(a)(3) of this title, if applicable, instead of paying an annuity to the surviving spouse under paragraph (1), if the Secretary concerned, in consultation with the surviving spouse, determines it appropriate to provide an annuity for the dependent children under this paragraph instead of an annuity for the surviving spouse under paragraph (1).”.(2) Paragraph (1) of such section is amended by striking “The Secretary concerned” and inserting “Except as provided in paragraph (2)(B), the Secretary concerned”.(b) Vitiation of Survivor Annuity Elections Made by Disability Retirees Who Die of Disability-Related Causes.—(1) Section 1448(b)(1) of such title is amended by adding at the end the following new subparagraph:“(F) Vitiation of election by disability retiree who dies of disability-related cause.—If a member retired on or after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2004 under chapter 61 of this title dies within one year after the date on which the member is so retired and the cause 117 STAT. 1519 of death is related to a disability for which the member was retired under that chapter (as determined under regulations prescribed by the Secretary of Defense)—“(i) an election made by the member under paragraph (1) to provide an annuity under the Plan to any person other than a dependent of that member (as defined in section 1072(2) of this title) is vitiated; and“(ii) the amounts by which the member’s retired pay was reduced under section 1452 of this title shall be refunded and paid to the person to whom the annuity under the Plan would have been paid pursuant to such election.”.(2) Section 1458 of such title is amended by adding at the end the following new subsection:“(j) Vitiation of Election by Disability Retiree Who Dies of Disability-Related Cause.—If a member retired on or after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2004 under chapter 61 of this title dies within one year after the date on which the member is so retired and the cause of death is related to a disability for which the member was retired under that chapter (as determined under regulations prescribed by the Secretary of Defense)—“(1) an election made by the member to provide a supplemental spouse annuity under this subchapter is vitiated; and“(2) the amounts by which the member’s retired pay was reduced under section 1460 of this title shall be refunded and paid to the person to whom the supplemental spouse annuity would have been paid pursuant to such election.”.(c) Insurable Interest Annuity Deemed Elections.—Section 1448(d) of such title is amended by adding at the end the following new paragraph:“(6) Deemed election.—“(A) Annuity for dependent.—In the case of a member described in paragraph (1) who dies on or after the date of the enactment of the National Defense Authorization Act for Fiscal Year 2004, the Secretary concerned may, if no other annuity is payable on behalf of the member under this subchapter, pay an annuity to a natural person who has an insurable interest in such member as if the annuity were elected by the member under subsection (b)(1). The Secretary concerned may pay such an annuity under this paragraph only in the case of a person who is a dependent of that member (as defined in section 1072(2) of this title).“(B) Computation of annuity.—An annuity under this subparagraph shall be computed under section 1451(b) of this title as if the member had retired for total disability on the date of death with reductions as specified under section 1452(c) of this title, as applicable to the ages of the member and the natural person with an insurable interest.”.117 STAT. 1520