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Research Questions

  1. What are the purposes of SBP, and how does it interact with other federal programs?
  2. How do SBP benefits compare with those available to government and private-sector employees?
  3. How effective is SBP in shoring up survivors' income?
  4. Is it feasible and advisable to have commercial sources provide SBP?

The Survivor Benefit Plan (SBP) provides income security for the survivors of U.S. service members who perform in an authorized-duty status — whether active or inactive — and die in the line of duty, as well as for the survivors of retired members enrolled in SBP. This report responds to Congress's request for an assessment of SBP. The assessment includes information about SBP participation and available benefits, how SBP compares with similar plans in public organizations and private companies, and how large a contribution SBP makes to survivors' incomes. Congress also requested that the assessment consider the feasibility and advisability of having SBP provided by commercial sources. Overall, the authors find that SBP is well structured to serve the role of providing survivor benefits to service members and military retirees, and SBP benefits generally compare well to those of public and private plans. Using commercial sources to provide survivor benefits appears feasible; however, the advisability of shifting to commercial sources requires information not currently available about internal and external cost and quality of service under different approaches to outsourcing.

Key Findings

SBP Benefits Generally Compare Well to Those of Public and Private Plans and Are a Significant Component of Widows' Total Income

  • The financial status of military widows in terms of average income is broadly comparable to that of nonmilitary widows, especially for widows who receive Social Security.
  • As with other widows who receive survivor benefits, these benefits are a key contributor to their financial status, contributing about half of total income, on average, for younger military widows who do not receive Social Security and about a third of total income for those who do.
  • In 2016, nearly all annuitants were survivors of military retirees, and participation was 66 percent of all retirees and 78 percent of the 2016 cohort of retirees.
  • The base amount covered by SBP has also been rising, reaching 98 percent for the 2016 retiree cohort. The Department of Defense (DoD) subsidizes SBP, allowing premiums paid by retirees to be lower than what would be required to cover the full SBP liability.
  • Survivor benefits in private retirement plans are often available in defined benefit retirement plans. Because these plans are less common today than they were 30 years ago, workers rely on other means to provide for survivors, including life insurance, defined contribution plans, workers' compensation, and Social Security.

Commercial Sources Could Provide Survivor Benefits, but More Information Is Needed About Cost and Quality of Service Under Different Approaches to Outsourcing

  • Commercially available products do not have the features of SBP, but the commercial expertise behind the many existing commercial products could be applied to develop commercial SBP.
  • There are costs of administration, contracting, and transition associated with commercialization to consider, as well as the requirement that commercial providers receive a competitive return on investment and yet hold capital to protect against the possibility of bankruptcy.
  • If SBP is outsourced, DoD should continue its subsidy to SBP because of its importance in keeping premium rates low and enrollment high.

Table of Contents

  • Chapter One


  • Chapter Two

    A Description of SBP and Military Survivor Benefits

  • Chapter Three

    How Do SBP Benefits Compare with Survivor Benefits Available to Government and Private-Sector Employees?

  • Chapter Four

    Evaluating the Effectiveness of SBP

  • Chapter Five

    Feasibility and Advisability of Providing SBP Commercially

  • Chapter Six


  • Appendix A

    Other Benefits and Sources of Support Available to Survivors of Service Members and Military Retirees

  • Appendix B

    Description of CSRS and FERS

  • Appendix C

    Descriptions of Detailed Examples in Chapter Three

  • Appendix D

    Additional Detailed Examples

  • Appendix E

    Adjustment for Differences in Widows' Characteristics Using an IPW Approach

  • Appendix F

    Example Illustrating DoD's Subsidy to SBP

This research was sponsored by Office of the Secretary of Defense and conducted within the Forces and Resources Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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