text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Military Survivor Benefits 
  Improvement Act of 2003''.
  
  SEC. 2. COMPUTATION OF BENEFITS UNDER SURVIVOR BENEFIT PLAN FOR 
                SURVIVING SPOUSES OVER AGE 62.
  
      (a) Phased Increase in Basic Annuity.--
              (1) Standard annuity.--
                      (A) Increase to 55 percent.--Clause (i) of 
                  subsection (a)(1)(B) of section 1451 of title 10, 
                  United States Code, is amended by striking ``35 percent 
                  of the base amount.'' and inserting ``the product of 
                  the base amount and the percent applicable to the 
                  month, as follows:
                                      ``(I) For a month before October 
                                  2004, the applicable percent is 35 
                                  percent.
                                      ``(II) For a month during fiscal 
                                  year 2005, the applicable percent is 40 
                                  percent.
                                      ``(III) For a month during fiscal 
                                  year 2006, the applicable percent is 45 
                                  percent.
                                      ``(IV) For a month during fiscal 
                                  year 2007, the applicable percent is 50 
                                  percent.
                                      ``(V) For a month during a fiscal 
                                  year after fiscal year 2007, the 
                                  applicable percent is 55 percent.''.
                      (B) Coordination with savings provision under prior 
                  law.--Clause (ii) of such subsection is amended by 
                  striking ``, at the time the beneficiary becomes 
                  entitled to the annuity,''.
              (2) Reserve-component annuity.--Subsection (a)(2)(B)(i)(I) 
          of such section is amended by striking ``35 percent'' and 
          inserting ``the percent specified under subsection (a)(1)(B)(i) 
          as being applicable for the month''.
              (3) Survivors of eligible persons dying on active duty, 
          etc.--
                      (A) Increase to 55 percent.--Clause (i) of 
                  subsection (c)(1)(B) of such section is amended--
                              (i) by striking ``35 percent'' and 
                          inserting ``the applicable percent''; and
                              (ii) by adding at the end the following: 
                          ``The percent applicable for a month under the 
                          preceding sentence is the percent specified 
                          under subsection (a)(1)(B)(i) as being 
                          applicable for that month.''.
                      (B) Coordination with savings provision under prior 
                  law.--Clause (ii) of such subsection is amended by 
                  striking ``, at the time the beneficiary becomes 
                  entitled to the annuity,''.
              (4) Clerical amendment.--The heading for subsection 
          (d)(2)(A) of such section is amended to read as follows: 
          ``Computation of annuity.--''.
      (b) Corresponding Phased Elimination of Supplemental Annuity.--
              (1) Phased reduction of supplemental annuity.--Section 
          1457(b) of title 10, United States Code, is amended--
                      (A) by striking ``5, 10, 15, or 20 percent'' and 
                  inserting ``the applicable percent''; and
                      (B) by inserting after the first sentence the 
                  following: ``The percent used for the computation shall 
                  be an even multiple of 5 percent and, whatever the 
                  percent specified in the election, may not exceed 20 
                  percent for months before October 2004, 15 percent for 
                  months during fiscal year 2005, 10 percent for months 
                  during fiscal year 2006, and 5 percent for months after 
                  September 2006.''.
              (2) Repeal upon implementation of 55 percent sbp annuity.--
          Effective on October 1, 2007, chapter 73 of such title is 
          amended--
                      (A) by striking subchapter III; and
                      (B) by striking the item relating to subchapter III 
                  in the table of subchapters at the beginning of that 
                  chapter.
      (c) Recomputation of Annuities.--
              (1) Periodic recomputation required.--Effective on the 
          first day of each month specified in paragraph (2)--
                      (A) each annuity under section 1450 of title 10, 
                  United States Code, that commenced before that month, 
                  is computed under a provision of section 1451 of that 
                  title amended by subsection (a), and is payable for 
                  that month shall be recomputed so as to be equal to the 
                  amount that would be in effect if the percent 
                  applicable for that month under that provision, as so 
                  amended, had been used for the initial computation of 
                  the annuity; and
                      (B) each supplemental survivor annuity under 
                  section 1457 of such title that commenced before that 
                  month and is payable for that month shall be recomputed 
                  so as to be equal to the amount that would be in effect 
                  if the percent applicable for that month under that 
                  section, as amended by this section, had been used for 
                  the initial computation of the supplemental survivor 
                  annuity.
              (2) Time for recomputation.--The requirement under 
          paragraph (1) for recomputation of certain annuities applies 
          with respect to the following months:
                      (A) October 2004.
                      (B) October 2005.
                      (C) October 2006.
                      (D) October 2007.
      (d) Recomputation of Retired Pay Reductions for Supplemental 
  Survivor Annuities.--The Secretary of Defense shall take such actions 
  as are necessitated by the amendments made by subsection (b) and the 
  requirements of subsection (c)(1)(B) to ensure that the reductions in 
  retired pay under section 1460 of title 10, United States Code, are 
  adjusted to achieve the objectives set forth in subsection (b) of that 
  section.
  
  SEC. 3. OPEN ENROLLMENT PERIOD FOR SURVIVOR BENEFIT PLAN COMMENCING 
                OCTOBER 1, 2004.
  
      (a) Persons Not Currently Participating in Survivor Benefit Plan.--
              (1) Election of sbp coverage.--An eligible retired or 
          former member may elect to participate in the Survivor Benefit 
          Plan under subchapter II of chapter 73 of title 10, United 
          States Code, during the open enrollment period specified in 
          subsection (f).
              (2) Election of supplemental annuity coverage.--An eligible 
          retired or former member who elects under paragraph (1) to 
          participate in the Survivor Benefit Plan at the maximum level 
          may also elect during the open enrollment period to participate 
          in the Supplemental Survivor Benefit Plan established under 
          subchapter III of chapter 73 of title 10, United States Code.
              (3) Eligible retired or former member.--For purposes of 
          paragraphs (1) and (2), an eligible retired or former member is 
          a member or former member of the uniformed services who on the 
          day before the first day of the open enrollment period is not a 
          participant in the Survivor Benefit Plan and--
                      (A) is entitled to retired pay; or
                      (B) would be entitled to retired pay under chapter 
                  1223 of title 10, United States Code, but for the fact 
                  that such member or former member is under 60 years of 
                  age.
              (4) Status under sbp of persons making elections.--
                      (A) Standard annuity.--A person making an election 
                  under paragraph (1) by reason of eligibility under 
                  paragraph (3)(A) shall be treated for all purposes as 
                  providing a standard annuity under the Survivor Benefit 
                  Plan.
                      (B) Reserve-component annuity.--A person making an 
                  election under paragraph (1) by reason of eligibility 
                  under paragraph (3)(B) shall be treated for all 
                  purposes as providing a reserve-component annuity under 
                  the Survivor Benefit Plan.
      (b) Election To Increase Coverage Under SBP.--A person who on the 
  day before the first day of the open enrollment period is a participant 
  in the Survivor Benefit Plan but is not participating at the maximum 
  base amount or is providing coverage under the Plan for a dependent 
  child and not for the person's spouse or former spouse may, during the 
  open enrollment period, elect to--
              (1) participate in the Plan at a higher base amount (not in 
          excess of the participant's retired pay); or
              (2) provide annuity coverage under the Plan for the 
          person's spouse or former spouse at a base amount not less than 
          the base amount provided for the dependent child.
      (c) Election for Current SBP Participants To Participate in 
  Supplemental SBP.--
              (1) Election.--A person who is eligible to make an election 
          under this paragraph may elect during the open enrollment 
          period to participate in the Supplemental Survivor Benefit Plan 
          established under subchapter III of chapter 73 of title 10, 
          United States Code, as added by section 1404.
              (2) Persons eligible.--Except as provided in paragraph (3), 
          a person is eligible to make an election under paragraph (1) if 
          on the day before the first day of the open enrollment period 
          the person is a participant in the Survivor Benefit Plan at the 
          maximum level, or during the open enrollment period the person 
          increases the level of such participation to the maximum level 
          under subsection (b) of this section, and under that Plan is 
          providing annuity coverage for the person's spouse or a former 
          spouse.
              (3) Limitation on eligibility for certain sbp participants 
          not affected by two-tier annuity computation.--A person is not 
          eligible to make an election under paragraph (1) if (as 
          determined by the Secretary concerned) the annuity of a spouse 
          or former spouse beneficiary of that person under the Survivor 
          Benefit Plan will be computed under section 1451(e) of title 
          10, United States Code. However, such a person may during the 
          open enrollment period waive the right to have that annuity 
          computed under such section. Any such election is irrevocable. 
          A person making such a waiver may make an election under 
          paragraph (1) as in the case of any other participant in the 
          Survivor Benefit Plan.
      (d) Manner of Making Elections.--An election under this section 
  must be made in writing, signed by the person making the election, and 
  received by the Secretary concerned before the end of the open 
  enrollment period. Any such election shall be made subject to the same 
  conditions, and with the same opportunities for designation of 
  beneficiaries and specification of base amount, that apply under the 
  Survivor Benefit Plan or the Supplemental Survivor Benefit Plan, as the 
  case may be. A person making an election under subsection (a) to 
  provide a reserve-component annuity shall make a designation described 
  in section 1448(e) of title 10, United States Code.
      (e) Effective Date for Elections.--Any such election shall be 
  effective as of the first day of the first calendar month following the 
  month in which the election is received by the Secretary concerned.
      (f) Open Enrollment Period Defined.--The open enrollment period is 
  the one-year period beginning on October 1, 2004.
      (g) Effect of Death of Person Making Election Within Two Years of 
  Making Election.--If a person making an election under this section 
  dies before the end of the two-year period beginning on the effective 
  date of the election, the election is void and the amount of any 
  reduction in retired pay of the person that is attributable to the 
  election shall be paid in a lump sum to the person who would have been 
  the deceased person's beneficiary under the voided election if the 
  deceased person had died after the end of such two-year period.
      (h) Applicability of Certain Provisions of Law.--The provisions of 
  sections 1449, 1453, and 1454 of title 10, United States Code, are 
  applicable to a person making an election, and to an election, under 
  this section in the same manner as if the election were made under the 
  Survivor Benefit Plan or the Supplemental Survivor Benefit Plan, as the 
  case may be.
      (i) Additional Premium.--The Secretary of Defense may require that 
  the premium for a person making an election under subsection (a)(1) or 
  (b) include, in addition to the amount required under section 1452(a) 
  of title 10, United States Code, an amount determined under regulations 
  prescribed by the Secretary of Defense for the purposes of this 
  subsection. Any such amount shall be stated as a percentage of the base 
  amount of the person making the election and shall reflect the number 
  of years that have elapsed since the person retired, but may not exceed 
  4.5 percent of that person's base amount.
      (j) Report Concerning Open Season.--Not later than July 1, 2004, 
  the Secretary of Defense shall submit to the Committees on Armed 
  Services of the Senate and House of Representatives a report on the 
  open season authorized by this section for the Survivor Benefit Plan. 
  The report shall include the following:
              (1) A description of the Secretary's plans for 
          implementation of the open season.
              (2) The Secretary's estimates of the costs associated with 
          the open season, including any anticipated effect of the open 
          season on the actuarial status of the Department of Defense 
          Military Retirement Fund.
              (3) Any recommendation by the Secretary for further 
          legislative action.
target: Military Survivor Benefits Improvement Act of 2003 - Adjusts the basic Survivor Benefit Plan (SBP) annuity amount for surviving spouses, age 62 and older, of former military personnel to: (1) 35 percent of the retired pay of the decedent (current law), for months before October 2004; (2) 40 percent for months during FY 2005; (3) 45 percent for months during FY 2006; (4) 50 percent for months during FY 2007; and (5) 55 percent for months after FY 2007. Adjusts similarly percentage amounts with respect to survivors of reserve personnel and survivors of persons who die while on active duty. Provides a corresponding phased elimination of the SBP supplemental annuity authorized to be provided to such surviving spouses. Requires periodic recomputation of: (1) annuity amounts beginning in October 2004; and (2) retired pay reductions for supplemental survivor annuities.Provides a one-year open enrollment period for SBP participation, commencing October 1, 2004, for those currently not participating, those electing to increase current coverage, and those wishing to participate in the supplemental SBP.Authorizes the Secretary of Defense to require appropriate premiums for SBP participation.
feat_title: To amend title 10, United States Code, to increase the minimum Survivor Benefit Plan basic annuity for surviving spouses age 62 and older, to provide for a one-year open season under that plan, and for other purposes.