August 25, 2013
Vol. 39 No. 25
INSIDE: BATTLE FOR SOLOMON ISLANDS Pg. 6 PROFILES IN LEADERSHIP Pg. 4
NIMITZ NEWS | AUGUST 25, 2013
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Commanding Officer Capt. Jeff Ruth Executive Officer Cmdr. John Cummings Command Master Chief CMDCM Teri M. McIntyre Public Affairs Officer Lt. Cmdr. Karin Burzynski Media DIVO Ens. John Mike Media LCPO MCC (SW/AW) Mike Jones Media Production Chief MCC (SW) Gregory Roberts Media LPO MC1 (AW/SW) Michael Cole Editor MC2 (SW) Jason Behnke Lead Designer MCSA Andrew Price Media Department MC2 (SW/AW) Jacquelyn Childs MC2 (SW) Ashley Berumen MC2 (SW) Nichelle Bishop MC2 (SW) Devin Wray MC2 (SW) Ryan Mayes MC2 (SW/AW) Alexander Ventura II MC3 (SW) Renée L. Candelario MC3 (SW) Shayne Johnson MC3 Jacob Milner MC3 Christopher Bartlett MC3 (SW) George J Penney III MC3 Raul Moreno MC3 Linda S. Swearingen MC3 (SW/AW) Jess Lewis MC3 Vanessa David MC3 (SW) W. J. Cousins MC3 Derek Volland MC3 Phil Ladouceur MC3 (SW) Sam Souvannason MC3 (SW) Nathan McDonald MC3 Joshua Haiar MCSN Kole Carpenter MCSN Derek Harkins MCSN Kaitlyn Haskett MCSN Eric Butler MCSN Siobhana McEwen MCSA Aiyana Paschal MCSA Kelly Agee MCSA Victoria Ochoa Nimitz News accepts submissions in writing. All submissions must be in by Friday, COB. Submissions are subject to review and screening. “Nimitz News” is an authorized publication for the members of the military services and their families. Its content does not necessarily reflect the official views of the U.S. Government, the Department of Defense, the Department of the Navy, or the Marine Corps and does not imply endorsement thereby.
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By LCDR Jeffery Jenkins
“Like A Good Neighbor” Have you ever found yourself in the middle of a project, or worse near the end, when you realize you are missing a key part or your equipment breaks? Last summer, I was working diligently to accomplish the weekly task of mowing the lawn, intent to be finished on Friday evening and not interfere with my weekend. By habit, I started in the backyard where the mower is stowed and just as I began the front lawn, the mower stopped. I had already filled the gas and recently changed the spark plug and air filter and thus had exhausted my mechanical abilities. The determined, perfectionist side of me could not stop with the front lawn in such a state so I continued to fiddle with the mower as I pondered my options. About that time, one of my neighbors (who happened to be a Sailor) came outside and realizing my position quickly got his lawn mower for me allowing me to accomplish my task. Aren’t you thankful for good neighbors? We’ve probably all had bad neighbors and there is definitely a difference. Once a man asked Jesus a simple question, “And who is my neighbor” in response to the command, “Love your neighbor as yourself.” Potentially the man was looking to be sure he properly obeyed the command. More likely he was seeking to narrow the field of who he really needed to love. Perhaps you are familiar with Jesus’ response in what is known as the Good Samaritan Parable. A man was beaten by robbers and left for dead. As he lay on the side of the road, two “good guys,” a priest and Levite, passed by without lending aid. Later, a “bad guy,” a Samaritan stopped and rendered aid to the point of bringing him to an inn and providing all needed funds for his care. What is the point? Anyone in need of aid is our neighbor. It is very easy to tightly define our view of a neighbor. We naturally define who our neighbor is, usually by proximity or affinity. We also can easily develop a view that our neighbor can fend for him or herself because after all, that’s what we have to do, right? I want to encourage you to adopt the broader view. We have a word, “shipmate,” that all too often is used with a rebuke or as a joke. Have you ever thought about your shipmates as neighbors? First, choose to remove your blinders. There are people in need all around us. Some are need of physical help but others are simply in need of a word of encouragement or perhaps a friend. How many people do we pass by each day looking for someone to ask, “How are you doing” and expect a real answer rather than the customary, “fine”? Look people in the eye and listen to the meaning behind the words. Second, choose to engage with others. Sometimes our problem is lack of awareness but more often it is the decision that is it easier to not engage whether due to our own schedules or even because we’re not sure how to help. Often any action you take to assist is better than inaction. Third, choose to be generous. I have never regretted helping someone but have often later regretted when I didn’t stop and help and the opportunity had passed me by. Not only will generosity help your neighbor, it will give you more joy in your life. Ask yourself the question today. Am I a good neighbor in my berthing? In my workspace? In my department or squadron? If not, why not become one today?
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NIMITZ NEWS | AUGUST 25, 2013
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WHAT IT MEANS TO BE A
LEADER Story and photos by MCSN Kole Carpenter
Two Sailors are nominated for the Navy-Marine Corps Society Leadership Award
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hand full of people in this world have the ability not only to lead, but to encourage others to do a better by their simple actions and words. Two exceptional individuals on board the aircraft carrier USS Nimitz (CVN 68) have been recognized by their peers for exemplifying this rare and admirable trait of true leadership. The NMCS annually recognizes one O-5, O-4, O-3, and senior enlisted Sailor or Marine for exemplary leadership in maritime service. The recipients are selected by peer vote, and two of this year’s nominees are Cmdr. Lance Harpel, Nimitz’ Chief Engineer (CHENG), and Senior Chief Intelligence Specialist James Williams, the ship’s Training Department Leading Chief Petty Officer. “I feel humbled,” Harpel said. “Honored. It was a complete surprise to me.” When asked what he considers his method for success, Harpel answered, for him, the key is perseverance. He said that it’s all about breaking down large problems into small, easy-to-swallow portions. “The analogy I use is ‘just take one bite out of the elephant.’ If you take one bite at a time, you can eat an elephant,” he said. “This 38-year-old ship, the lead CVN, she needs a lot of care. She needs a lot of maintenance. It has been my goal, since I’ve been here, to fix her one pipe at a time, one valve at a time. We’re going to make her better, one step at a time. I told my department when I came here that I’m a repair guy by nature. I like to fix things. And I want to fix this ship.” The CHENG’s advice to future leaders, those looking to get a nomination of their own, is to forget about awards and focus on the good of the crew. To the up-and-comers, he said, “You know, anyone who really wants this award probably wouldn’t get it. I think if you’re chasing an award, you’re probably doing it for the wrong reasons. And your peers will see that. And you won’t be successful.” He continued, saying that it’s important to find the need – find the gap you could fit in, and fill it. “It’s my belief that as a leader, you inject yourself where you think you can do the most good. Or where you can have the most impact,” he said. “If it’s too much, then people get callused and don’t listen. If it’s too little, then they think you don’t care. So to balance the both of those is a tight rope to walk.” Harpel added that a leader is only as strong as his teammates, and that living by the Golden Rule has been a cornerstone in his success. “Treat others like you want to be treated. That goes a long way toward being successful,” he said. “Largely, Engineering is a service organization. A lot of people depend on us to get their power, their electricity, their heat, catapults, galley equipment. But yet, no man is an island.” “You can’t do it on your own,” he continued. “Personal relationships DO matter. None of this could have happened if it wasn’t for the people who willingly do their job day in and day out without
recognition. They are truly the heroes within the department. It’s not me. I’m just the conductor at the orchestra. It’s the players who deserve all the credit. So, to my department, I say thanks, because it’s for them.” Williams shared the CHENG’s reaction to the award, as well as a deep appreciation for his own teammates, saying that he too felt “honored and humbled” by the formal recognition, and that he recognized his fellow chiefs especially as contributors in his own success. “I want to say thank you to the Chief ’s Mess,” he said. “No one does it alone, and I certainly couldn’t have without someone, several people actually, helping me along the way.” Williams credited his experience with the CPO 365 program as a substantial push toward his nomination, saying that this forward presence in the command gave him not only the experience, but also the visibility that the best leaders require. “I believe CPO 365 was a big help. It’s usually a one-year program, and I actually got to do it for two,” he said. “That, I think, really showed people that I could be that ‘go-to’ leader they could depend on.” He continued, explaining that he considers Navy leadership to be a responsibility that reaches beyond one’s own work center. “It’s not just about your department,” he said. “It’s about being there for the whole ship. You see a chief, and you automatically know that you go to them for help. Even if you don’t know them, you see the collar and you see the reputation that the Chief ’s Mess has built.” Williams said that he believes leadership is all about courage. It’s about trusting your experience and taking charge of both your work and your self. He shared that his career-spanning exercise in extroversion has played a major role in his leadership development. “Learn to face your fears, and believe in yourself,” he advised. “I’m an introvert by nature, and I had to really learn how to step out of my comfort zone in order to lead. Because of that, I feel like it’s come full circle. Now I know my peers believe in me as well.” Both nominees expressed that the award would not be the finish line. The expert leadership they have demonstrated in their combined 54 years of naval service will continue on as strong as ever. Harpel affirmed that his focus is as solid as ever. His mind remains first and foremost on Nimitz’ welfare. “The decisions I make will be with the ship in mind, the mission in mind FIRST – Not for a personal stepping stone, not a personal goal in mind,” he said. “So when I make a decision, that’s where I’m coming from. That’s what makes me tick. Whatever comes personally from that decision, so be it. But I’m going to do my best for the department and the ship as a whole.” NIMITZ NEWS | AUGUST 25, 2013
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BATTLE OF THE EASTERN SOLOMONS Story by MC3 Phil Ladouceur
Black smoke pours from USS Enterprise as it lists from damage sustained in attack.
In August 1942, the Japanese controlled the waters north Japanese patrol aircraft, but not before one of them had been of Guadalcanal, and every night the Japanese sent ships south close enough to spot the carrier. The Japanese now knew where the Americans were. But from Rabaul to bombard the Marines holding the island. The island had been invaded Aug. 7, a first step in the campaign except for the Ryujo, no other Japanese carriers had been spotted. At 1 p.m., Fletcher sent aircraft out to search for to bring the war to Japan. In the south the aircraft carriers Enterprise, Saratoga and other carriers, but eventually could delay no longer and the Wasp waited to attack the moment the Japanese committed Saratoga launched her strike force against the Ryujo. But just minutes after they had begun lining up to attheir forces to a counterattack of the island. Adm. Frank Fletcher, who had been at both Coral Sea tack Ryujo, the Enterprise’s scouts had found a bigger threat. The aircraft carriers Shokaand Midway, was ku and Zuikaku, repaired in command. of their damage from Coral Receiving intelSea, were 200 miles to the ligence on the north, heading directly tomovement of Japward the American carriers. anese forces, it inHeavy static and heavy dicated that they radiochatter meant Fletcher would be leaving didn’t receive the news right to invade Guadalaway. He tried to redirect canal Aug. 21. the Saratoga’s strike force As at Coral but they were already lining Sea and Midway, up for their attack, which the patrol and rewould ultimately sink the connaissance airRyujo. craft were out in The planes on the Enforce, searching terprise and Saratoga were for the enemy. A gassed, armed and lined up Japanese scout to launch in anticipation of plane was found an attack. General quarters and destroyed. A was set. Japanese transport At 4:32, radar showed convoy was found, the enemy 88 miles out. The but turned back Sailors engage in damage control efforts in the aftermath of the attack on USS Enterprise. carriers turned into the wind north the moment it was spotted. It was like fencing: Feint, counter-feint. and started launching their planes. Surrounding the carriers were cruisers, destroyers and the new battleship North CaroThrust, counter-thrust. On Aug. 23, Fletcher received intelligence that indicated lina, anti-aircraft guns pointing overhead in anticipation. At 4:55, the fighters made contact with the incoming the earlier report was wrong: the Japanese force had not yet departed. Since there was going to be a delay in the invasion, planes. For twenty minutes they fought overhead, blunting Fletcher decided to use the breathing space to send Wasp the point of the Japanese attack, but not stopping it. The Enterprise still had 17 strike aircraft that they then south to refuel. Unfortunately, there was no breathing space. The intelli- launched to see if they could find the Shoikaku and Zuikaku. gence had been wrong, and Fletcher now found his strength The attempt would be futile, but it had the benefit of clearing the flight deck of aircraft loaded with fuel and bombs. cut by one-third. The last of the planes lifted off the deck at 5:08. Four On the morning of Aug. 24, American patrol aircraft spotted the Japanese light carrier Ryujo and its escorts 200 minutes later, the enemy dive-bombers began their attack on miles to the northwest. The Saratoga’s aircraft shot down two Enterprise.
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Radar could see that they were directly overhead, but 74 men had died and 91 had been wounded. But the ship had the lookouts didn’t see them. They were spotted by 1st Sgt. survived. Joseph Schinka, the Marine in charge of Enterprise’s numBut then, at 6:43, the rudder suddenly swung hard right, ber four 20 mm anti-aircraft battery. He opened fire, and although the planes were not yet within range of his guns, then left, then jammed right. Momentarily out of control, the tracers pointed the way for everyone else. Soon the guns Enterprise nearly sliced one of the escorting destroyers in from the destroyers, cruisers and battleship, in addition to two. Speed was reduced, but the carrier was now stuck movthe guns on Enterprise, were filling the air with lead. As the dive-bombers came down, some of the fighters ing in a circle, open to both submarine and air attacks. To followed them in an attempt to stop them from hitting the make matters worse, radar had just picked up an approachships, despite the risk of being hit by their own anti-aircraft ing Japanese squadron, a second wave from the Shokaku and Zuikaku. fire. When the first casualty had occurred, the steering room They came down, one every seven seconds. At 5:14, a bomb hit forward of the aft elevator, in the same general had been sealed to prevent smoke from entering the space. area where the planes had been, literally minutes before. It But the heat from nearby fires and the steering mechanism crashed through flight deck and detonated five decks down. itself had raised the temperature to 170 degrees Fahrenheit, The ship, millions of pounds in weight, was tossed side to overwhelming the machinery and the seven men working it. For 40 minutes damage control teams fought their way side. In the magazines, ammunition and bombs flew about. They had been secured, but not enough. It hadn’t occurred to into the space, saving the men who’d passed out, and then anyone that an entire aircraft carrier would move so violently starting the backup steering motor. Meanwhile the Japanese planes flew within 50 miles of the vulnerable Enterprise, but under attack. The holes were 16 feet wide in the decks, and the force of never found her. They had won. Dethe explosion created a two-foot spite the fact the Japanese high bulge in the flight deck. outnumbered the AmerIt left holes six feet wide in the icans, their invasion skin of the ship at the waterline. force and carriers turned The ocean began flooding in. around. Once again, as at Fires erupted. Smoke began fillCoral Sea and Midway, ing spaces. the Americans had held Ammunition handlers, a the Japanese back, dodgrepair party, and men working ing and deflecting the on the elevators were killed in blows. the blast; 35 men in total. Enterprise would Only 30 seconds later, a head back to Pearl Harsecond bomb hit the aft starbor for repairs that would board five-inch guns, destroykeep her from the South ing them. Rather than piercing Pacific for two months. the ship, it exploded on impact, When she returned, it killing 38 more. More smoke would be for a rematch began to pour out of the ship. with Shokaku and ZuiAfter witnessing the second kaku at the Battle of the bomb hit, Aviation Machinist’s Mate 2nd Class Bernard Peter- Damage to the hull of the Enterprise, patched with mattresses, wire mesh, and plugs. Santa Cruz Islands. Fletcher would have son started looking around the no rematch. Adm. Ernest King, Commander in Chief of the flight deck and examining the damage. “I almost tripped over a Sailor pulling himself over to the United States Fleet, had never forgiven him for the loss of edge, where he went over the side,” said Peterson. “His right either Lexington at Coral Sea or Yorktown at Midway. He also viewed him as too cautious, too timid of a commander. leg was torn off and lying about 20 feet away.” Damage control teams scrambled to engage the casual- After a torpedo damaged Fletcher’s flagship, Saratoga, he was ties and get survivors to safety, all while the ship continued made Commander, Thirteenth Naval District, based out of its evasive maneuvers, speeding at 27 knots, swerving from Bremerton, Wash. Despite King’s opinion, when one looks back and tallies side to side. A minute and thirty seconds later another bomb hit. De- up the score, in the three great carrier battles of 1942 Fletcher fective, it never detonated, but still tore a ten-foot hole into participated in, battles that helped turn the tide of the war, he sank six Japanese carriers at the cost of two American carrithe flight deck. A few minutes after it had begun, the assault was over. ers. His solid competence, using what tools he had on hand, The Enterprise was listing and spilling black smoke, but it helped hold off the Japanese onslaught while America’s imtook just an hour for her crew to get the fires under control. mense industrial capacity could be ramped up. Adm. Chester Nimitz was confident of his abilities, and The listing was corrected with counter-flooding, and the later sent him an autographed photo of himself. It said, “Vice holes in the waterline patched with wood and mattresses. The battle had lasted for little over 40 minutes. The attack Admiral Frank Jack Fletcher, a fine fighting admiral and a on the Enterprise itself lasted only a few minutes. In that time splendid shipmate.” It is a fitting summation. NIMITZ NEWS | AUGUST 25, 2013
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WOMEN IN BLUE
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Story by MC3 Chris Bartlett
omorrow will be the observance of Women’s Equality Day. This day not only commemorates the passage of the 19th Amendment, but also calls attention to contributions women have made in the nation’s history. Women first entered naval service in 1908 with the establishment of the Navy Nurse Corps, 12 years before women were granted the right to vote. Women continued to serve in the Navy in varying capacities throughout World War I and World War II, but it was not until June 12, 1948, with the passage of the Women’s Armed Services Integration Act that women gained permanent status in t he U.S. armed services. The first six enlisted women were sworn into regular U.S. Navy service July 7, 1948. Four months the first eight female naval officers were commissioned Oct. 15, 1948. Today 67,301 women serve in the Navy on active duty or in the Reserve, comprising 17.9 percent of the force. Additionally, nearly 50,000 women serve across the navy in a wide range of specialties as civilian employees. Sailors from the Nimitz speak their minds on what Women’s Equality means to them, their experiences, the changes they have encountered and what changes they would like to see.
Master Chief Aviation Ordnanceman Jennifer Vollstedt “I think everybody plays their role whether you’re a male or a female I don’t think that should really have any bearing. Hopefully one day we’ll get to where we won’t talk about that and that won’t have a bearing.” Logistics Specialist 1st Class Andrew Grace “Female Sailors have been breaking down stereotypical barriers from the beginning and I do not see a slow in their pace anytime soon.”
Aviation Ordnanceman 1st Class Jasmin Shackelford “Each new generation of young Sailors tends to yield more individuals who’ve come from single parents homes and were raised solely by their mothers, aunts, or grandparents. I think this contributes greatly to the increased support and accepted normality of associating women with technical work.” Lt. Cmdr. Sarah Lawson “Surviving as a culture means that we need to listen to one another, and challenge each other, demonstrate our potential as individuals. We all have surprising strengths. Get over the outside package and try to hear the real person by listening before judging.”
Master Chief Culinary Specialist Coasa Brannon “Since my 26 years in the Navy I’ve seen so many doors open up in so many areas, women on the front line in the combat zone, women become pilots, soon the first women on submarines. I don’t think I would change anything I would just hope that we continue moving forward towards progress in opening all the rest of the doors. I’m still looking forward to the first female MCPON and even the President of the United States.”
NIMITZ NEWS | AUGUST 25, 2013
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UP STEPPING
THE
PADDLE
GAME
Late at night, aboard the aircraft carrier USS Nimitz (CVN 68), one individual can usually be found on the forward mess decks. Instead of sitting at the tables playing video or card games, Aviation Electronics Technician 3rd Class Chadd Russell can be found challenging others to a game of ping pong. Story and photos by MC2 (SW) Devin Wray
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AT3 Chadd Russell plays ping pong on the forward mess decks..
“I always wanted to play ping pong on board, but the trouble was finding people to play with,” said Russell. “They started playing religiously a couple months ago.” Although most people on board have just been picking up this game since it arrived on Nimitz this deployment, Russell said he picked up his first paddle long before he joined the Navy. “I played off and on since about 2006,” said Russell. “I was playing at the Brevard Music Center in North Carolina for about three months. Musicians like to play off-brand sports and I progressively got better over those three months playing with them.” Russell’s earlier years of school also connected him to this sport. He said he started playing racquetball when he was 13, and played club racquetball in high school. He has continued playing sports like these since. “When I joined the Navy I asked the recruiter if there were ping pong tables, pool tables and racquetball courts on most naval bases and they said yes,” said Russell. Getting the most out of each
game is what drives Russell to keep playing. “If you play as hard as I do, you work up a sweat,” he said. “It is a form of physical activity; I enjoy that and the pure competition.” Russell said he has been challenging people during the last few port calls after liberty expiration. “My best streak on board was when we were in Bahrain,” said Russell. “I had a three day streak where no one could beat me.” One reason Russell said gives him an edge over the competition is that he plays left handed. “I’m one of the few left-handed people that play racquet sports,” he said. “The reason it can get interesting playing lefties is that they put opposite spin on their hits and their forehand is the opponent’s backhand.” Due to his love of this sport, Russell said he would like to see more attention brought to the game on board. He said he would like to see the ship get more paddles and would even like to start a Nimitz ping pong club to challenge other commands when the ship returns to it’s home port. 11 NIMITZ NEWS | AUGUST 25, 2013
BLAST FROM THE PAST CHILDHOOD FRIENDS REUNITE ON THE NIMITZ AZAN Darron Lewis, left, poses with friends, MM3s Steven and Michael Wilson.
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f all the experiences Sailors past and present will recount of their time in the Navy, one of the most memorable remains the friendships they made and the times they have shared. For three Sailors on board the aircraft carrier USS Nimitz (CVN 68), the time they have spent together so far in the Navy is a continuation of friendship that started almost 10 years ago in the California town of Modesto. Aviation Maintenance Administrationman Airman Darron L. Lewis and twin brothers Machinist’s Mate 3rd Class Steven Wilson and Machinist’s Mate 3rd Class Michael Wilson were childhood friends and are currently stationed together on board Nimitz. “I’ve been friends with the Wilsons for about 10 years,” said Lewis. “We met at Hanshaw Middle School in Modesto when we were 12 years old.” The Wilson twins, who are originally from Castro Valley, Calif., moved to Modesto when they were in the first grade and met Lewis a few years later. “They lived in the rural part of town and they had a house with a huge backyard where we would play football,” said Lewis. “We went to junior high together and I became friends with Michael first through a mutual friend, and later I became friends with Steven after I started hanging out after school at their house.” According to Lewis, the Wilson twins had different interests in high school than he did, but it was their differences that brought them together. “Michael and Steven were extremely athletic in high school and were competitive with each other,” said Lewis. “They did football, wrestling and track and field, whereas I did track and field, government and theatre. We got along because we were different.” Before they joined the Navy, both Lewis and the
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Story and photo by MC3 Linda S. Swearingen
Wilson twins attended college. The Wilson twins joined the Navy in 2010 and Lewis joined nearly two years later. “We didn’t join the Navy together,” said Michael. “My brother and I explained to Darron that the Navy was a good way to help get a good career later on, and it looked good on a resume to have been in the Navy.” According to Lewis, it was a coincidence that he and his childhood friends ended up at the same command at the same time. “They didn’t influence me to join, but they were able to give me some useful tips since they had already been in the Navy for a bit when I joined.” Steven said that his and his brother’s department schedule conflicts with Lewis’ schedule frequently while out to sea, but while in Nimitz’ homeport of Everett, Wash., they are able to spend time together more often. “We go to the movies, hang out, go to Tacoma to see a friend that we also went to high school with who’s in the Army and sometimes we have a few drinks together,” said Steven. Lewis said that having the Wilson twins with him makes life on board Nimitz easier because he has something that helps to keep him tethered to home, aside from letters and phone calls. “It’s always good to see an old friend around the ship and to talk about the old time and where certain friends are and what they are doing,” said Michael. Steven echoes Lewis’ sentiments of having someone he knows while at sea. “It definitely makes life easier because not only do I have a twin brother on board, I have another friend from home who’s pretty much considered a brother to me and my family,” said Steven.
NIMITZ NEWS | AUGUST 25, 2013
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14 Finance
Survivor Benefit Plan (SBP)
A fun and easy guide by Cdr. Matthew Miller N33/N35 Sub Ops/Future Plans
Introduction
This week’s article is one I’ve had a lot of people ask questions about. It only applies to those nearing retirement from the Navy for two reasons 1) Once you retire, it is the only opportunity to select this coverage and 2) I suspect there will be many changes on the horizon based on funding issues within the Department of Defense and there may be long term changes that we don’t know about yet. I’ll also try and answer the most basic question of “should I get SBP or not?” One thing I’d like to stress is the fact there are a number of considerations regarding the SBP and each person will have their own set of variables they will need to consider before enrolling or not. I’ll give a generic example in this article to show what the costs would be. One surprising benefit that you may not be aware of is the fact that you already are enrolled if you are active duty. That’s right! You are automatically enrolled while on active duty (at no cost to you). That means if you should die, the full SBP annuity will be paid to your beneficiary. If you have any further questions on this topic or any other topic, please feel free to email me.
What is SBP? In short, the SBP is an annuity. Many of you who have read my articles may remember that in general,
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I’m not a fan of annuities. That being said, this may be beneficial to your particular situation. When you retire and elect SBP, you pay a premium (varies depending on base amount of coverage) every month for this coverage. If you (the retiree) dies, then your spouse and/or kids (or someone else you identify) will receive 55% of the base amount of your retirement until they pass away (or turn 18/22 for kids). That’s really all there is to it.
Highlights of SBP Some of the key highlights of the SBP include the following: • Unlike term life insurance, SBP never expires. • Your premiums (amount you pay) are not taxed; i.e., the money is taken out before taxes are applied to your retirement pay. • The SBP adjusts for Cost of Living Allowance (COLA). Very similar to Social Security, this is tied to the Consumer Price Index (CPI). • The SBP is not affected by Social Security; meaning the amount will not decrease when you start withdrawing Social Security. • Payments stop after the age of 70 AND 30 years (360 payments). • Payments stop if you have no beneficiaries. • Payments stop when you die. • Your beneficiary can be your spouse, spouse and child, child only, former spouse, or another person with an insurable interest. • No proof of insurability required. Life insurance companies generally charge much higher premiums for riskier lifestyles or conditions, e.g., smoking, overweight, family history of ailments, etc. • If your spouse and/or child predecease you, there are no additional benefits for the premiums you will have paid. • Beneficiaries are very limited. Unlike life insurance, you can’t just name a new beneficiary whenever you want. Example Costs Let’s take an example to show what it would cost vs. the coverage gained. For illustrative purposes only, I’m going to use the spouse option. I’m also going to make the assumption that you and your spouse are 44 years old now with your spouse living until age 80. The premium (cost of coverage) is 6.5% of the base amount elected or 2.5% of the first $635 and 10% of the remainder; whichever is LESS. In return, your spouse would receive 55% of your base amount when you die with payments continuing until they die. For example, let’s say you are eligible to receive $2000/month in retirement and elect to enroll in SBP. Shown below are some key financial considerations. Retirement pay: $2,000/month SBP costs: $130/month Net retirement pay: $1,870/ month Spousal benefit: $1,100/month Total payment over 30 years: $46,800
The maximum benefit of the SBP, would happen if you immediately passed away after retirement. You would have paid $130 in premiums but your spouse will have received $475,200 (not adjusting for COLA) if they live to age 80. The minimum benefit would occur if you paid all 30 years of premiums and your spouse immediately died. In that case, you will have spend $46,800 with zero benefit. What if you paid 30 years of premiums and died immediately thereafter with your spouse living until age 80? In that case, you would have paid $46,800 in premiums and your spouse would receive $79,200. Using the example above, your spouse would have to live another 3.5 yrs after you die in order for you to “break even” assuming you made all 360 payments. So, is SBP a “great deal?” Again, I would caution you and say “it depends.” What if you already have a life insurance policy that will pay $1,000,000 when you die? Would you really need to pay premiums for 30 years? What is the opportunity cost associated with the money you would have spent in premiums? How much income do you need from your retirement? Can you get a term life insurance policy that would pay more and cost much less? Again, the answer is “it depends.”
Things to consider
Closing In this article, I’ve covered the major points regarding the SBP. There are quite a number of fine print details you will want to explore on your own. I would suggest using the Navy Mutual Aid website (www.navymutual.org). They have a number of calculators, power points, and point papers covering this topic. Other websites to consider include www.afpc.randolph.af.mil, www. dod.mil/actuary, and www.dod.mil/dfas. My last piece of advice for you is to make sure you’ve taken time to “work the numbers” and see if SBP is the right option for you. Also, your spouse/partner will need to sign a consent form if you choose NOT to enroll in the SBP, so you’ll want to make sure you have this conversation well ahead of time. The time to figure out if this is the right thing to do is not on retirement day when you may be pressured into enrolling without careful evaluation on whether or not it’s in your best interest.
There is no shortage of literature regarding the SBP and again, every person will probably have a different situation because of the number of variables. I’ve listed some of those variables below: • How much life insurance do you already have? • What type of life insurance do you have and when does it expire (if it does)? • How many dependents do you have and what are their ages? • How much have you saved for your retirement already? • What do you intend to do with your retirement money? • Do you plan on working after the Navy retirement? If so, what amount of income will you need based on your living standards? • What are the life expectancies for you and your spouse? • Can your spouse/partner fully support the household? • Do you or your spouse/partner have an inheritance? • Do you and your spouse live healthy lifestyles? There are other things to consider as well. You may be better off paying for term life insurance since the payout is usually much higher while the cost is significantly less than SBP. The benefit of term life insurance is that it provides the entire sum at one point in time. Your spouse can then redistribute that money into other investment vehicles that could significantly increase the overall net gain. Be cautious here as well; did you know that less than 1% of all TERM life insurance policies are ever paid out? Term life insurance is usually used for peace of mind during the most critical earning years (typically when you have kids). NIMITZ NEWS | AUGUST 25, 2013
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ON THE COVER: AWSCS Gregory Ott, a SAR swimmer assigned to HSC-6, prepares to be lowered into the water during a training excercise.- Photo by MC3 (SW/AW) Jess Lewis
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