When SBP was enacted in 1972, Congress intended that the government would pay 40% of the cost -- to roughly parallel the subsidy for the Federal civilian SBP.  Because of conservative actuarial assumptions, the government's cost share has declined to less than 25%.  Retirees' premiums now cover over 75% of expected long-term program costs, vs. the intended 60%.  Even worse, the military SBP annuity drops sharply for survivors attaining age 62.  Instead of providing 55 percent for life, the annuity drops as low as 35 percent for survivors age 62 or older.  Many retirees and survivors weren't told of the age-62 reduction when they signed up for SBP in the 1970’s, and are shocked to learn of it.

In contrast, the federal civilian SBP enjoys a 33% subsidy for employees under the 1984 Federal Employees Retirement System (FERS).  For those under the pre-1984 Civil Service Retirement System (CSRS), the subsidy is 48%.  Further, FERS survivors receive 50% of retired pay for life, and CSRS survivors receive 55%, with no reduction at age 62.  Although federal civilian premiums are 10% of retired pay compared to 6.5% for military retirees, military retirees pay SBP premiums for far longer than most civilians because they are required to leave service at a younger age.