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a. Option 1. Provides a monthly annuity payment to your widow (who was your lawful wife at the date of your retirement) until her remarriage or death.

b. Option 2. Provides monthly payments in equal shares to or for your eligible children until they reach age 18 or marry, whichever occurs first. The annuity is continued after age 18 for mentally or physically handicapped children as long as they remain incapacitated and are unmarried, provided the incapacity existed before their 18th birthday.

c. Option 3. Provides a monthly annuity payment to your widow until her remarriage or death, at which time the monthly payments are made to your eligible child or divided among your eligible children. Note: A participating member may allocate a part of his option 3 annuity to his surviving children who are not children of the wife named as beneficiary under this option. He can make this allocation either before or after becoming entitled to retired pay. If he takes this action after he retires, the wife named as beneficiary must still be eligible for the annuity. When she remarries or dies, the annuity is divided equally among all his eligible children.

d. There is another election you can make at the time you make your choice among the three annuity options listed above, but it is not a survivor benefit option. This so-called OPTION 4 actually is an "extra" which provides for ending your retired pay deduction if your wife or children named as beneficiaries die or cease to be eligible while you are still receiving retired pay. This "fourth option," which increases your cost only slightly, can be elected only in connection with one or more of the three survivor annuity options.

e. You have the three separate annuity options to select from and the option 4 rider can be combined with any one of them. You also have the privilege of combining options 1 and 2, if you wish, either with or without the option 4 rider. You cannot combine option 1 with option 3, or option 2 with option 3. Choosing either of these combinations makes your election invalid.

82. Cost of Participation:

a. Costs vary widely in the Retired Serviceman's Family Protection Plan. The governing factors are your age at retirement, your beneficiaries' ages, the option or option combination. elected, percentage of coverage desired, and whether you elected to include option 4.

b. Your cost is based on the rates in effect at the time you actually retire, which may not necessarily be the ones that were in effect when you elected to participate in the plan. Furthermore, even if retired pay increases or decreases or the cost rates change at any time after you retire, the cost to you and the amount of the annuity remain the same as they were on the first day you received retired pay. Information concerning the cost to you may be obtained:

(1) Prior to Retirement. An estimate of the amount which will be withheld from your retired pay can be obtained from your Personal Affairs Officer.

(2) After Retirement. The actual amount of reduction of retired pay, or "cost of coverage" will be computed in each individual case by the Retired Pay Division, AFAFC, using the actuarial tables in effect at the time of your retirement.

83. Methods of Payment:

a. A retired member who will receive retired pay will have the amount of option coverage withheld from his retired pay effective as of the date of his retirement. All necessary action in this respect will be taken by the Retired Pay Division, AFAFC.

b. After a member has made an election and retired, he will be required to deposit with the Treasurer of the United States-during any period (including periods of active duty) in which he is not receiving retired pay for any reason, except in subparagraph c below, an amount equal to that by which his retired pay would have been reduced if he was receiving such pay. For example, if you retired and then waive all of your retired pay in favor of VA compensation, you will be required to make direct remittance of an amount equal to that which would otherwise have been withheld from your retirement pay. Remittances are due on the last day of each month and will be made payable to the Treasurer of the United States.

They will be forwarded on or before the 10th day of the month following the date payment is due to the AFAFC (CF), 3800 York St Denver Colo 80205. The retired member will be notified regarding the amount to be deposited and the due date of such deposits. Compound interest of 14% per month will be charged on all delinquent accounts from the first day of delinquency if not paid within 45 days from the date deposit is due. The Federal Government can file suit against the individual to recover any unpaid amounts. If a member who is delinquent is in receipt of retired pay, any arrears with compound interest will be withheld from the retired pay. If the retired member dies while still owing payments for coverage, his survivors must make up the back payments plus interest to become eligible to receive the annuities.

c. Retired members who voluntarily resign from the services and relinquish all rights to retired pay or who have been involuntarily removed from the retired list may not continue their election under the plan. These members may not be permitted to deposit in the U.S. Treasury the amount that would have been withheld from their retired pay so as to entitle their beneficiaries to the benefits of the plan.

d. Reduction of retired pay will be terminated only under the four conditions outlined below:

(1) Upon the retired member's death;

(2) Upon his removal from the Temporary Disability Retired List for any reason other than permanent retirement;

(3) Upon the loss of all beneficiaries when option 4 has been elected. If option 4 has been elected, no further deductions will be made from the retired pay of a member commencing with the first day of the month following the month in which there was no beneficiary eligible to receive the annuity. It is important to note that if a member has elected option 1, 2, or 3 without including option 4, the deduction from retired remains in effect until his death regardless pay of the ineligibility of his beneficiaries through legal separation, annulment, divorce, death of his wife, or upon his children's reaching 18 years of age, or their marriage or death.

(4) Service Secretaries have the authority to allow a retired member to withdraw from participation in the plan for severe financial hardship reasons, when requiring the member's continued participation would violate fairness and good conscience. Specifically stated, however, is the point that the absence of an eligible beneficiary shall not, of itself, be a basis for such a step. When permission to withdraw is granted by the Secretary concerned, no amounts by which retired pay was reduced will be refunded, since the member had the protection of the plan up to that time.

84. Eligible Beneficiaries and Payments of Annuities:

a. Eligible beneficiaries entitled to benefits under the Family Protection Plan are:

(1) Widow or widower-the spouse to whom the retired member is lawfully married at time of retirement which may not necessarily be the spouse at time of election. (2) Child-refer to

(a) An unmarried legitimate child. (b) A stepchild who is dependent on the member for over half of his support.

(c) A child legally adopted before the date of retirement. All must be under 18 years of age, or if child is over 18, he must be unmarried and incapable of self-support because of being mentally defective or physically incapacitated, a condition which must have existed before reaching age 18. In all cases, the term "child" refers to a member's child or children who meet the foregoing requirements at time of retirement.

b. Survivors of retired members who have made an election under the plan need not obtain legal assistance in collecting the annuities upon the death of the retired member. Upon receipt of notice of death, the Retired Pay Division AFAFC, will furnish the eligible survivor a DD Form 768, "Application for Annuity under the Retired Serviceman's Family Protection Plan," unless a legal guardian has to be appointed to receive the annuities, then application form will be furnished to the guardian upon receipt of a copy of the court order appointing the guardian. A legal guardian will be required if the annuity is payable on behalf of minor children or a mentally incompetent annuitant.

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d. An annuity due on behalf of a widow will terminate only upon her death or remarriage. An annuity due on behalf of a child or children will terminate as of the last day of the month preceding that in which the youngest child attains the age of 18 or marries, whichever occurs first, unless, in the former instance, the child is incapable of self-support because of being physically incapacitated or mentally defective and that condition existed before attaining the age of 18. If so, annuity will terminate as of the last day of the month preceding that in which the child recovers from the disability or marries, whichever occurs first. The full amount of the annuity established by an option elected on behalf of children is payable until the last child becomes ineligible for payment. Such payment is divided in equal shares among the surviving children remaining eligible at the time payment is due.

85. Reporting Annuity Payments for Tax Purposes. Annuities received under the Serviceman's Family Protection Plan must be reported on Federal income tax returns. The Internal Revenue Service, however, will allow a portion of the amounts received to be excluded from gross income. Such amounts are contingent upon the life expectancy of the annuitant and the amount contributed by the retired member toward providing the annuity. The amount contributed, i.e., cost of the annu

ity, is divided by the annuitant's life expectancy, to determine the annual exclusion from gross income. For example, through a period of years the retired member has paid in $6,000; the widow's life expectancy is 8 years; $6,000 divided by 8 is $750; this amount is excludable income. If the widow receives $100 a month. in annuity payments ($1,200 a year) the $750 will be excluded, leaving a balance of $450 annually that must be included in gross income. The amount to be excluded annually will remain constant as long as the annuitant lives. The life expectancy of the annuitant is determined from actuarial tables provided by the Internal Revenue Service.

a. Information relative to the "cost" of an annuity will be furnished to each annuitant by AFAFC at time payment of the annuity is commenced. In addition, each annuitant will be furnished a statement (TD Form 1099) shortly after the end of each year, showing the amount of annuity paid during the preceding calendar year. This statement is for use in preparing Federal income tax returns. No tax will be withheld from annuity payments, except in cases of nonresident aliens of the United States. In the case of a nonresident alien, section 1441 (b) of the Internal Revenue Code of 1954 requires the withholding of a flat 30% of the amount included in gross income. The statement furnished at the end of the year in this case is TD Form 1042S (U.S. Annual Information Statement of Income Paid Subject to Chapter 3, Internal Revenue Code).

b. Information relative to Federal estate taxes on annuities and any assistance needed. in determining the amount excluded from gross income and assistance in preparing Federal income tax returns should be obtained from the local Director of Internal Revenue.

PART FOUR

TRAVEL AND TRANSPORTATION

Chapter 13

TRAVEL INCIDENT TO RETIREMENT

86. Personal Travel of Member:

a. Travel to Home of Selection Authorized. A member on active duty-who is (a) retired for physical disability or placed on the Temporary Disability Retired List (without regard to length of service); (b) retired with entitlement to retired pay for any other reason with 8 or more years of continuous (no single break therein of more than 90 days) active duty immediately preceding retirement-may select a home and receive travel allowances thereto from his last duty station. Such travel must be completed within 1 year after termination of active service except under circumstances in subparagraph b below.

b. Members Undergoing Hospitalization or Medical Treatment on Date of Termination of Active Service. A member who is confined in, or undergoing treatment at a Government hospital (or a civilian hospital at Government expense) on the date of termination of active service under conditions outlined in subparagraph a above may select a home and receive travel allowances thereto from his last duty station provided that travel is performed to the selected home within 1 year after the date of discharge from the hospital or termination of medical treatment, or 2 years after the date of termination of active service, whichever is earlier. Placement on the Temporary Disability Retired List with a requirement for periodic physical checkups is not, in itself, basis for extension under this provision. Personnel who believe they are eligible for an extension of time to make a home of selection should forward a re

quest to the transportation officer of their last duty station. Requests should include a statement from the attending physician or hospital commander giving the nature of the treatment and the termination date. Requests for determination of eligibility should be submitted at least 90 days before expiration of the normal 1-year period specified in subparagraph a above.

c. Recall to Active Duty Before Selection of a Home. A member who is otherwise eligible to select a home under the provisions of paragraph 4158, Joint Travel Regulations (a above) but is recalled to active duty before the selection of a home and travel thereto, may upon termination of active duty for any reason under honorable conditions, select a home and receive travel allowances thereto from his last duty station, provided that travel is performed to the selected home within one year after his last release from active duty.

d. Recall to Active Duty Subsequent to Selection of a Home. A member who is recalled to active duty subsequent to the selection of a home and travel thereto will, upon termination of active duty under honorable conditions, be entitled to travel allowances from last duty station to the home previously selected, or to the place from which he was called to active duty, whichever the member may elect. Members entitled to mileage under this provision may receive such allowances upon termination of active duty without regard to the actual performance of such travel.

e. Members on Temporary Disability Retired List Who Are Discharged or Retired. A mem

ber who is on the Temporary Disability Retired List at the time he is discharged with severance pay or retired for any reason, will not be entitled to travel allowances in connection with such discharge or retirement. This limitation will not affect the member's right to travel allowances to which he was entitled in conjunction with his placement on the TDRL.

87. Personal Travel of Dependents:

a. The following persons are dependents for purposes of transportation entitlement:

(1) Lawful wife.

(2) Unmarried legitimate children, under 21 years of age.

(3) Unmarried legitimate children, over 21 years of age, incapable of self-support because of being mentally defective or physically incapacitated, and who are in fact dependent on the retired member for over one-half of their support.

(4) Stepchildren and adopted children who are in fact dependent upon the retired member.

(5) Husband, when dependent upon the retired female member for over one-half of his support.

(6) Parent(s) of the retired member, (step-parent(s), parent (s) by adoption, and any other person who has stood in loco parentis to the retired member for a continuous period of not less than 5 years during the minority of the retired member, are included in the definition). Such parent must meet the dependency requirements of 37 USC 401.

b. Travel to Member's Home of Selection Authorized. Upon retirement from the Air Force, all commissioned officers, warrant officers, and airmen in pay grade E-4 with over 4 years' service, and in grades above E-4, who qualify as outlined in paragraph 86a above, for travel to a home of selection, are entitled to transportation allowances for their dependents, to the same destination. The dependent's travel will be authorized from the member's last duty station or from the place to which the dependents were last transported at Government expense. Dependent's travel must be completed within 1 year after the member's termination of active duty except where the member qualified for extension. of the time limitation as outlined in paragraph

86b above. In such case, the period in which dependents must perform travel will be extended to correspond to that of the member.

c. Travel of Dependents Prior to Effective Date of Retirement Orders. Travel of dependents before effective date of retirement orders is at the risk of the member. This means that, if orders are changed before the effective date, the member must bear the expense of the travel. The expression "within 1 year after member's termination of active duty" is used to establish the final date of entitlement, and not to eliminate the possibility of travel before the effective date of retirement orders. Travel of dependents before the issuance of retirement orders precludes payment of a travel allowance since the certificate required by paragraph 7000-8, JTR is not issued incident to retirement.

d. Travel of Surviving Dependents if a Member Dies Subsequent to Retirement. When a member, as specified in paragraph 86a, dies after he claims travel and transportation allowances to his home of selection and his dependents have not traveled thereto, they will be entitled to travel at Government expense to the member's home of selection, or to some other place selected by them, but not to exceed the cost of travel to the home selected by the member. If the member dies before submission of his claim for personal travel and transportation allowances to a selected home, his dependents will be entitled to travel at Government expense to a home of their selection. In either event, entitlement will be from the last duty station or from the place to which the dependents were last transported at Government expense.

88. Travel Allowance Claims:

a. Election of Destination. When a home has been selected and reimbursement for travel thereto has been claimed, such selection is irrevocable. Advance payment of travel allowances to a selected home is not authorized. When a member does not qualify for entitlement to travel to a selected home as outlined in paragraph 86a, but does qualify for travel to his home of record or the place from which he was ordered to active duty, as he may elect, mileage may be paid in advance at the time of separation without regard to the actual performance of travel. In connection with oversea movement,

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