110 STAT. 2574
PUBLIC LAW 104-201—SEPT. 23, 1996
"(3) SPECIAL RULE FOR CERTAIN RCSBP PARTICIPANTS.— In
the case of a participant in the Plan who is participating
in the Plan under an election under section 1448(a)(2)(B) of
this title and who provided child-only coverage during a period
before the participant becomes entitled to receive retired pay,
the retired pay of the participant shall be reduced by an Eimount
prescribed under regulations by the Secretary of Defense to
reflect the coverage provided under the Plan during the period
before the participant became entitled to receive retired pay.
A reduction under this paragraph is in addition to any reduction
under paragraph (1) and is made without regard to whether
there is an eligible dependent child during a month for which
the reduction is made.
"(4) CHILD-ONLY COVERAGE DEFINED.— For the purposes of
this subsection, a participant in the Plan who is providing
child-only coverage is a participant who has a dependent child
and who—
"(A) does not have an eligible spouse or former
spouse; or
"(B) has a spouse or former spouse but has elected
to provide an annuity for dependent children only.
" (c) REDUCTION FOR INSURABLE INTEREST COVERAGE.—
"(1) REQUIRED REDUCTION IN RETIRED PAY.—The retired
pay of a person who has elected to provide an annuity to
a person designated by him under section 1450(a)(4) of this
title shall be reduced as follows:
"(A) STANDARD ANNUITY.—In the case of a person
providing a standard annuity, the reduction shall be by
10 percent plus 5 percent for each full five years the individual designated is younger than that person.
"(B) RESERVE COMPONENT ANNUITY.— In the case of
a person providing a reserve-component annuity, the reduction shall be by an amount prescribed under regulations
of the Secretary of Defense,
"(2) LIMITATION ON TOTAL REDUCTION. — The total reduction
under paragraph (1) may not exceed 40 percent.
"(3) DURATION OF REDUCTION. —The reduction in retired
pay prescribed by this subsection shall continue during the
lifetime of the person designated under section 1450(a)(4) of
this title or until the person receiving retired pay changes
his election under section 1450(f) of this title.
"(4) RULE FOR COMPUTATION.—Computation of a member's
retired pay for purposes of this subsection shall be made without regard to any reduction under section 1409(b)(2) of this
title.
"(d) DEPOSITS To COVER PERIODS WHEN RETIRED PAY NOT
PAID. —
"(1) REQUIRED DEPOSITS. —If a person who has elected to
participate in the Plan has been awarded retired pay and
is not entitled to that pay for any period, that person must
deposit in the Treasury the amount that would otherwise have
been deducted from his pay for that period.
"(2) DEPOSITS NOT REQUIRED WHEN PARTICIPANT ON ACTIVE
DUTY. —Paragraph (1) does not apply to a person with respect
to any period when that person is on active duty under a
call or order to active duty for a period of more than 30
days.
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