We know it can be difficult for anyone to think about their own death. However at the Defense Finance Accounting Service, we also know you want to prepare and take care of your loved ones.

The team at DFAS has a special page on our website that outlines the options for reporting the death of a retiree.

The webpage also explains the steps and documents needed to claim a retiree’s final pay and claim Survivor Benefit Plan payments (if the retiree was enrolled).

In addition, the government agency will soon have a new, downloadable checklist on that webpage. You can provide a copy to your loved one so they can understand the steps needed to report your death, the documents needed to claim your final paycheck as well as resources for how to claim Survivor Benefit Plan (SBP) payments if the survivor was enrolled.

Your Last Paycheck

After you pass away, a one-time payment of your final paycheck is made to a designated beneficiary. This is called your Arrears of Pay (AOP).

In most cases, the Arrears of Pay will be only the pro-rated amount of your final month’s retirement pay. This is because your entitlement to retirement pay ends on the date of your death.

When your death is reported, DFAS will stop monthly payments. If a payment was made after your death. DFAS must reclaim that pay and audit your account. The amount of the payment owed to you will then be computed (based on the number of days in the month you were living) and paid to your AOP beneficiary, along with any other money owed to you at the time of your death.

To receive this payment, your AOP beneficiary will need to send us a claim form. When we receive notification of your death, this claim form will be sent in a condolence package to the AOP beneficiary you designated for your account.

The Importance of Designating Your AOP Beneficiary

Retired Army Command Sergeant Major E.G. Mais, the San Antonio Post 8541 service officer, states it is very important that you designate a beneficiary or beneficiaries in your retired pay account for your Arrears of Pay, and that you keep that information current.

“Unless otherwise noted, your AOP beneficiary will also be the person we contact for assistance in closing your account, so it is important to designate a person you trust to handle your affairs,” he added.

Failing to designate an AOP beneficiary and keep their contact information current could cause stress and financial hardship for your survivors during an already difficult time, because the final payment could be delayed, he added

When no beneficiary is named, the payment is made to the highest person in what is known as the “Order of Precedence.” The Order of Precedence is the federally mandated order of inheritance that applies to legacies without a designated beneficiary. It can take many months to locate your survivors, identify who comes highest in the Order of Precedence, and then make the payment.

That’s why having a current, correct and complete beneficiary designation on file is important to prevent delays or errors in your arrears payment.

Mais also suggests you limit the number of your AOP beneficiaries to avoid delays in payment. Remember that the AOP payment is usually less than one month’s pay, and this amount will be divided among all of your designated beneficiaries.

Keep in mind that designating a sole beneficiary in your will does not automatically make that person your AOP beneficiary.

Also, the AOP designation does not entitle the person named as a beneficiary(s) to a Survivor Benefit Plan (SBP) annuity. A separate SBP election must be made to cover the desired individual for SBP purposes, he added.

Telling Your Loved Ones What to Expect

“In the difficult days after your passing, your loved ones will need to notify a long list of people and agencies, Mais continued.

The VFW service officer said DFAS tries to make the process a bit easier and convenient by offering an online notification of death form on our askDFAS website using their askDFAS online form – available online 24/7.

He added loved ones can access the online notification form from several different links at the Retired Military & Annuitants area of our website.