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Life Event - Entering or Leaving Active Military Service

Serving on active duty in the Armed Forces of our country can have an effect on your benefits through the Trusts. Please review the items on this page to see if they pertain to your service.

Plan Checklist

  • Notify the Plan Office when your active service will begin and is expected to end. Also, notify the Plan Office when your service actually ends.
  • If your service will be for 31 days or less, and you are eligible, the Plan will continue your coverage at no expense to you.
  • If your service will be for more than 31 days, your hour bank reserves under the Plan will be frozen effective with the first of the month following the month that eligibility will be provided from your last hours of employment before entering a uniformed service. For example, if you last worked in January, you will have your hour bank frozen as of March, with coverage for April provided at the Plan’s expense.
  • If you wish to continue coverage for up to the additional 23 months after your last month of eligibility generated by active employment, you may then do so by timely remitting monthly COBRA-like payments to the Plan Office. After you return to Covered Employment (with proper notice and documentation), your hour bank will be reinstated in accordance with Plan rules.
  • Vesting and benefit credit may be earned in both the Pension and Retirement Savings Plans depending on the length of your active duty. See the SPD sections listed for the specific rules for each Plan.

Also Consider...

Military reservists who are called up for active duty will encounter unique financial planning needs. These must be addressed, before leaving for military service.

It is vital to quantify the net changes to your household income. Many reservists find that their income decreases significantly, upon being called to active duty.

If the reduction in household income will bust your current budget, your next step is to consider some combination of the two possible remedies; increasing household income and reducing household expenses. Your household expenses will already be reduced for food, clothing, transportation and miscellaneous for the person going on active duty. You can also consider additional employment for the non-military member of the household.

Quantify what your current financial situation really is. Fill out a net worth statement listing all assets and liabilities. As a last resort if income drops significantly, you may be forced to liquidate some assets to obtain needed living expenses.

Document all credit debts including home mortgages, automobile loans, credit cards and home equity credit lines. Under the Soldiers' and Sailors' Civil Relief Act of 1940, you may qualify for reduced interest rates on mortgage payments, credit card debt, and other debt (except Federally subsidized student loans) because creditors can only charge 6 percent simple interest on any debt existing before you go on active duty. This remains in effect for the entire period you remain on active duty. The debt must be the military person's and must be incurred before active duty begins. Notify your creditor in writing with documentation of your call to active duty and request the interest rate reduction for the period of your active service. The creditor must either honor the request or go to court to demonstrate that you do not financially need the interest rate reduction. Check the details with each creditor as their policies and practices differ.

If your car or other vehicle will not be used while you are on active duty, notify the insurance company to get a reduction in premium and refund for any advance payments.

All active military personnel stationed overseas get an automatic two-month extension of the federal April 15 tax filing deadline. But interest will accrue if money is owed to the government. Those who are not able to make tax payments because of a substantial income drop can apply for a deferment using Form 1175, Request for Deferment of Collection of Income Tax. If the deferment is approved, taxes will not be owed until six months after the end of the initial tour of duty; no interest or penalty will accrue.

If you are the one who usually handles the financial affairs of the household, be sure someone else (spouse or other trusted individual) knows where important papers and financial accounts (assets and debts) are located, who the financial advisers are, when bills are due, how to balance the checking account, and any other important information related to managing financial affairs for someone in their absence.

If you don't already have these documents or plan prepared, try to get them done before you leave for active duty.