Fill in a Valid DD 2656 Form

The public reporting burden for this collection of information, 0704-0569, is estimated to average 15 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or burden reduction suggestions to the Department of Defense, Washington Headquarters Services, at whs.mc-alex.esd.mbx.dd-dod-information-collections@mail.mil. Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to any penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number.

AUTHORITY: 10 U.S.C. 71, Computation of Retired Pay; 10 U.S.C. 73, Annuities Based On Retired Or Retainer Pay; DoD Instruction 1332.42, Survivor Annuity Program Administration; and DoD Financial Management Regulation, 7000.14-R, Volume 7B, Chapter 42.

PRINCIPAL PURPOSE(S): To collect information needed to establish a retired/retainer pay account, including designation of beneficiaries for unpaid retired pay, state tax withholding election, information on dependents, and to establish a Survivor Benefit Plan election.

ROUTINE USE(S): To the Department of Veterans Affairs (DVA) regarding establishments, changes and discontinuing of DVA compensation to retirees and annuitants. To former spouses for purposes of providing information, consistent with the requirements of 10 U.S.C. 1450(f)(3), regarding Survivor Benefit Plan coverage. To spouses for purposes of providing information, consistent with the requirements of 10 U.S.C. 1448(a), regarding Survivor Benefit Plan coverage. Additional routine uses are available in the applicable system of records notice T7347b, Defense Military Retiree and Annuity Pay System Records, available at: http://dpcld.defense.gov/Privacy/SORNsIndex/DOD-wide-SORN-Article-View/Article/570196/t7347b/

DISCLOSURE: Voluntary; however, failure to provide requested information will result in delays in initiating retired/retainer pay.

WARNING

Read the instructions at the end of this form in their entirety prior to completing.

PART I - RETIRED PAY INFORMATION

SECTION I - PAY IDENTIFICATION

9.CORRESPONDENCE ADDRESS (Ensure DFAS - Cleveland Center is advised whenever your correspondence address changes.)

SECTION II - DIRECT DEPOSIT / ELECTRONIC FUND TRANSFER (DD/EFT) INFORMATION (See Instructions)

ACTIVE DUTY ONLY: Check here if you want to continue using financial information currently on file, otherwise fill out Items 10 through 13)

NOTE: If any payment type was selected, attach a COPY OF THE ORDERS which authorized the payment and a COPY OF THE DD FORM 214.

List Of Attachments

If Yes, Attach Page

SECTION IV - VETERANS AFFAIRS (VA) DISABILITY COMPENSATION INFORMATION

15. VA DISABILITY COMPENSATION

SECTION V - DESIGNATION OF BENEFICIARIES FOR UNPAID RETIRED PAY (See Instructions)

Check this box if you want to designate your spouse as 100% beneficiary of any unpaid retired pay upon death OR complete Item 16

16. BENEFICIARY OR BENEFICIARIES INFORMATION

Complete this section if you want to designate a beneficiary or beneficiaries to receive any unpaid retired pay you are due at death.

If you do not complete this section OR check the block above, it will cause significant delay in disbursement of remaining pay upon your death.

SECTION VI - FEDERAL INCOME TAX WITHHOLDING INFORMATION (Submit information in Items 17 – 21 in lieu of IRS Form W-4 for tax purposes.)

SECTION VII - VOLUNTARY STATE TAX WITHHOLDING INFORMATION (Complete only if monthly withholding is desired.)

DO NOT COMPLETE PART II,

If you are not covered by the BLENDED RETIREMENT SYSTEM or do not want to elect a lump sum of retired pay

PART II - LUMP SUM ELECTION

This election must be made NO LATER THAN 90 days prior to the date in Part I, Section I, Item 4, in accordance with 10 U.S.C. §1415

For example, if the date in Block 4 is June 1, 2018, the date in Block 28b must be on or before March 3, 2018

SECTION VIII - BLENDED RETIREMENT SYSTEM LUMP SUM ELECTION

Members covered by the Blended Retirement System may, upon retirement (regular retirement), or upon reaching the age of eligibility to receive retired pay (non-regular retirement) elect to receive a portion of his or her retired pay as a lump sum. The lump sum is a discounted present value of a portion of that member’s retired pay; not the same amount that would be received otherwise. It is highly recommended that you consult with a financial counselor before electing a lump sum of retired pay.

27.LUMP SUM CONSIDERATIONS (Read the following carefully before signing in Block 28.)

•You are only eligible to elect a lump sum if you are qualified for a Regular or Non-Regular retirement under the Blended Retirement System. If you are retiring with a disability retirement under 10 U.S.C., Chapter 61, you are not eligible to elect a lump sum.

•A lump sum election must be made NO LATER THAN 90 days prior to the date of your retirement (for Regular Retirement) or 90 days prior to the date you are eligible to begin receiving retired pay (for Non-Regular Retirement), as indicated in Part I, Section I, Block 4.

•You may elect to receive either a 25 percent or 50 percent discounted portion of your future estimated retired pay as a discounted lump sum in exchange for reduced monthly retired pay until you reach your full Social Security Retirement Age.

•As a result of electing a lump sum, your monthly retired pay will be reduced to either 75 or 50 percent of its normal amount depending on whether you elect to receive 25 or 50 percent. At Full Social Security Retirement Age, your monthly retired pay will be restored to its full amount.

•The discount rate used to calculate your lump sum is the rate published by the Department of Defense in June of the year prior to the year of your retirement or year you first become eligible for retired pay, based on the date in Part I, Section I, Block 4.

•A lump sum payment is earned income for purposes of Federal Income Tax – receipt of it may have significant tax implications.

•The amount of the lump sum is based on your calculated military retired pay, the discount rate in effect for the year in which you retire or become eligible to begin receiving retired pay, and the remaining amount of time until you reach full Social Security Retirement Age. Once distributed, you do not have the ability to seek review of or challenge the amount of the lump sum with regard to any assumptions or factors used to compute the amount of the lump sum.

•Survivor Benefit Plan premiums (Part III) will still be deducted from your remaining monthly retired pay should you elect the lump sum. The premiums and your beneficiary’s coverage will be based on the unreduced amount of your monthly retired pay, as if you had not elected a lump sum, unless you indicate otherwise in Block 35 of Part III.

•If you expect to receive a disability rating from the Department of Veterans Affairs, dependent upon your rating, your ability to receive disability compensation could be affected by the lump sum.

•It is important to understand that a lifetime of full monthly payments will most likely be worth more than the lump sum with reduced monthly retired pay. It is highly recommended that you consult with a financial counselor before electing a lump sum of retired pay.

COMPARE YOUR ESTIMATED RETIREMENT BENEFITS WITH OR WITHOUT THE LUMP SUM:

http://militarypay.defense.gov/Calculators/

28. LUMP SUM ACKNOWLEDGEMENT

By signing below, I am indicating that I am aware that I am electing to receive a discounted portion of my retired pay as a lump sum, and that this lump sum will likely be less than I would have received if I had not elected to receive it. I am aware that there are resources available to assist me in making this decision, and that I have reviewed a comparison of my retirement benefits with and without a lump sum. I am also aware that once accepted, I may not seek review of, or otherwise challenge the amount of the lump sum, particularly in regard to deviations from future cost of living adjustments, actuarial assumptions, or other factors used in computing this amount.

PART III - SURVIVOR BENEFIT PLAN

SECTION IX - DEPENDENCY INFORMATION (This section must be completed regardless of SBP Election.)

29. SPOUSE

SECTION X - SURVIVOR BENEFIT PLAN (SBP) ELECTION (You should consult a Survivor Benefit Plan counselor before making an election.)

If you make no election, maximum coverage will be established for your spouse and/or eligible dependent children

33.RESERVE COMPONENT ONLY (This section refers to the decision you previously made on the DD Form 2656-5 when you were notified of eligibility to retire, in most cases you do not have the right to make a new election on this form)

Reserve/National Guard members who achieve 20 qualifying years of service make the election to participate in the Reserve Component (RC) SBP on DD Form 2656-5 within 90 days of being notified of eligibility for a non-regular retirement not when applying for retired pay, unless that member previously elected to defer coverage. You must indicate your previous election in Block 33a through 33c before proceeding to Block 34. If you previously elected Option B or Option C, DO NOT enter an election in Block 34. (Check only one in Block 33a. through 33c.)

OPTION A - Previously declined to make an election until eligible to receive retired pay (Proceed to Block 34 to make election)

OPTION B - Previously elected coverage to begin at age 60 (Do not make an election in Block 34, you have already elected coverage.)

OPTION C - Previously elected or defaulted to immediate RC-SBP Coverage (Do not make an election in Block 34, you have already elected coverage.) NOTE: If you were married at the time you were notified of eligibility for non-regular retirement and did not complete DD Form 2656-5,

you defaulted to full coverage under OPTION C – do not make an election in Block 34

Marital status has changed since your initial election to participate in RC-SBP.

34.SBP BENEFICIARY CATEGORIES (Check one only. See Instructions and Section X.)

d. I ELECT COVERAGE FOR THE PERSON NAMED IN BLOCK 37 WHO HAS AN INSURABLE INTEREST IN ME (See Instructions)

e.I ELECT COVERAGE FOR MY FORMER SPOUSE INDICATED IN BLOCK 38 (See Instructions) Complete DD 2656-1, "Survivor Benefit Plan (SBP) Election Statement for Former Spouse Coverage"

f. I ELECT COVERAGE FOR MY FORMER SPOUSE AND DEPENDENT CHILD(REN) OF THAT MARRIAGE

35.SBP LEVEL OF COVERAGE (Check one only. Complete UNLESS Option B or Option C was selected in 33 OR Check Box 34 d or 34 g was selected. See Instructions.)

a. I ELECT COVERAGE BASED ON FULL GROSS PAY

(If I elected the Career Status Bonus under REDUX or a lump sum of retired pay under the Blended Retirement System (Part II), full gross pay is the amount of retired pay I would have received had I NOT elected the Career Status Bonus or Lump Sum.)

b. I ELECT COVERAGE WITH A REDUCED BASE AMOUNT OF $ (Spouse concurrence is required in Part V)

I understand that this represents a Reduced Base Amount and requires Spouse Concurrence. (See Instructions)

d. I ELECT COVERAGE BASED ON THE THRESHOLD AMOUNT IN EFFECT ON THE DATE OF RETIREMENT.

(Spouse concurrence is required in Part V)

36.SPECIAL NEEDS TRUST (Check only if you intend to designate a special needs trust (SNT) as beneficiary for a child/children designated in Item 32e. as disabled. You must elect either 34b., 34c., or 34f. to be eligible to designate an SNT. See DoDI 1332.42 for procedures for designating an SNT.)

I INTEND TO DESIGNATE AN SNT AS BENEFICIARY FOR THE CHILD OR CHILDREN DESIGNATED AS DISABLED IN BLOCK 32.

(It is your responsibility to separately submit a written statement of the decision to have the annuity paid to the SNT, an attorney’s certification of that SNT, and the name and tax identification number for the SNT)

37.INSURABLE INTEREST BENEFICIARY (See instructions prior to completing this section - DO NOT complete if you have an ELIGIBLE SPOUSE or FORMER SPOUSE)

38.FORMER SPOUSE INFORMATION (Complete only if you have a former spouse)

PART IV – CERTIFICATION

SECTION XI - CERTIFICATION

39. MEMBER

Under penalties of perjury, I certify that the number of withholding exemptions claimed does not exceed the number to which I am entitled, and that all statements on this form are made with full knowledge of the penalties for making false statements (18 U.S.C. §287 and §1001) provide for a penalty of not more than $10,000 fine, or 5 years in prison, or both). Also, I understand that if I elected less than full SBP coverage for my spouse, I will need my spouse’s notarized concurrence signed no earlier than the date of my signature and prior to the date of my retirement; otherwise, by law, I will automatically be covered at the maximum spouse coverage.

40. WITNESS

PART V – SPOUSE SBP CONCURRENCE

Required ONLY when the member is married and elects either: (a) child only SBP coverage, (b) does not elect full spouse SBP coverage; or (c) declines SBP coverage. The date of the spouse's signature in Block 41c MUST NOT be before the date of the member's signature in Block 39c, or on or after the date of retirement listed in Part I, Section I, Block 4. The spouse's signature MUST be notarized.

SECTION XII - SBP SPOUSE CONCURRENCE

41. SPOUSE

I hereby concur with the Survivor Benefit Plan election made by my spouse. I have received information that explains the options available and the effects of those options. I know that retired pay stops on the day the retiree dies. I have signed this statement of my free will.

appeared (Name of Spouse in Block 41a.)

to be the person whose name is signed in block 41.a. of this document in my presence.

INSTRUCTIONS

GENERAL

1.Read these instructions and Privacy Act Statement carefully before completing the data form.

2.The Defense Finance and Accounting Service (DFAS)-Cleveland will establish your retired/retainer pay account based on the data provided on this form and your retirement/transfer orders. Your personnel office, disbursing/finance office, and SBP Counselor will assist you in the proper completion and submission of this form. You should maintain these instructions along with a copy of the form as a permanent record. Please complete the form electronically or by typing or printing in ink.

3.Ensure that you promptly advise DFAS-Cleveland of changes to your marital/family status and any changes to your correspondence address or direct deposit information. Gray Area retirees should contact their Reserve Component directly to report changes. Retired members of the Coast Guard should contact the Coast Guard Pay and Personnel Center.

4.If completed electronically, this form automatically disables certain fields based on information you entered. If one of the items listed below does not appear on the form, it is due to information you previously entered that indicates this item is not applicable to you.