Examining VA Benefits: Pension and Fiduciary, and VA Life Insurance Options

Subcommittee will come to order. Without objection, chair may declare a recess at any time. Good afternoon. I want to thank our witnesses for being here today. Thank you both. Today we are taking a closer look at how the Department of Veterans Affairs administers several of the most important benefits programs. VA pension, fiduciary, and life insurance programs provide critical support for many veterans and their families. Often our veterans and or their families seek the assistance of the benefits during a financial and challenging times. Pension is a need-based benefit. It is meant to make life more affordable and provide a baseline level of financial support for wartime veterans and surviving spouses who may not have other means. For some, this is what keeps the lights on for veterans and their families. That means the eligibility process needs to be clear, consistent, and work that way and work that way as it was intended. And this is not a small population we're actually talking about. It's in the millions. For the current benefit this year, for current benefits this year, the maximum net worth limit for pensions eligibility is $163,699. That threshold determines whether many low-income wartime veterans and survivors can access this support. We will also be looking at the fiduciary program. This is one of the most serious responsibilities VA has when a veteran cannot manage their own financial affairs, VA must step in and appoint someone else to do that in their behalf. That requires a high level of trust, and when that trust is broken, whether through misuse, fraud, or lack of oversight, the consequences are very real. When we are talking about veterans who are already in a vulnerable position, VA must absolutely get this correct. That includes how fiduciaries are selected, how they are monitored, and how VA responds when something goes wrong. I also want to acknowledge the department's recent work related to Second Amendment considerations, including steps taken to revisit how certain beneficiaries' information is handled and shared across agencies. Given the subcommittee's engagement on this issue, we will continue to monitor VA actions closely and ensure that veterans' rights are protected across the benefits delivery system. At the end of the day, veterans accessing these benefits they have earned should not come on the expense of their constitutional freedoms. That is absolutely not a tradeoff. We want to make sure VA is getting this right and that the changes are implemented clearly and transparently to the veterans they impact. This is an area where oversight matters and the committee intends to stay engaged as the department moves forward. Finally, we will examine VA's life insurance programs. These insurance products are meant to provide financial stability for veterans and their families who, through their military service, may not be able to acquire life insurance in the private market. These programs operate on a very real scale. In 2023 alone, Servicemembers' Group Life Insurance covered more than 2.2 million service members. Family Servicemembers' Group Life Insurance covered roughly 2.5 million spouses and dependent children, and Veterans' Group Life Insurance covered more than 451,000 individuals. We want to understand how these programs are being administered, how veterans are navigating their options, and whether VA is doing enough to help families make informed decisions. We will also examine who is administering these benefits and if they are providing the right level of value and service to veterans and the taxpayers. At the end of the day, that comes down to a simple question: is VA delivering these benefits in a way that is clear, accountable, and centered on the veteran? Because if the system is too complicated, too slow, or not properly overseen, the people who feel that first are obviously the veterans and their families, and that is not acceptable. I look forward to hearing from our witnesses today. With that, I yield to the ranking member.

Thank you, Mr. Chairman, and absolutely share your thoughts on that about making sure we are putting the veterans front and center in everything we do. Thanks for being here for we need we need to do this. This is when we've got to examine the VA's insurance, pension, and fiduciary programs. Right now, the VA's insurance program provides more than $1.25 trillion in coverage to more than 5.1 million beneficiaries. That is enormous. But despite the size and importance of these programs, Congress hasn't really taken a close look at them in quite some time. So, I'm glad we're doing it today. And I think that on this subcommittee you're going to find we do generally good work, and we work together to make sure that we are doing exactly what you've heard both of us say: putting the veteran at the heart of what we do. We try to conduct real oversight. We try to stay away from some of the theater that you might see, especially in something like this, because it's important. We're good at keeping the veterans at the heart of what we do. And I think that's in especially important as we talk about today's topic. Because although pensions and insurance and fiduciaries might seem like sort of dry topics, there's a really painful story and reality behind so many of these numbers. When you think about someone who receives a life insurance payment, that is someone who has lost a loved one. When you think about someone who's in the fiduciary program, that is someone who is really struggling and in pain and in need of help. When you think about someone who's in the pension program, this is we're usually talking about a veteran. We're usually talking about someone who is in the later stages of life who is facing real financial strain and difficulty. We've got to make sure that these programs continue to exist, continue to thrive for the people who need them, for the stories behind these numbers. On the insurance program specifically, I'm happy that this portion of the hearing isn't being driven by bad headlines or incriminating IG reports, but rather because Congress is actually doing some forward-leaning oversight for a change. I think that's how it should be. And although I will also mention that I do intend to engage the Government Accountability Office to do a deeper dive into these programs, I hope you'll join me in that effort, Mr. Chairman. I'm eager to hear from you all today and to learn more about how this program supports our veterans, active duty service members, and their families. Shifting to the pension and the fiduciary programs, these are areas, unfortunately, that have been in the news for the wrong reasons. They've been the focus of multiple Inspector General reports, and all too often we see criminal behavior in these programs. Just this past February, there was a report of a fiduciary stealing more than $158,000 from elderly and ill veterans. That is beyond unacceptable, and it's exactly why this kind of oversight matters. The people in these programs are some of the most vulnerable people that the VA serves, and to see someone who is taking advantage of people who are uniquely vulnerable is obviously despicable and something we all agree we want to root out. So, the VA's got to have strong protections in place to make sure that these veterans are not being made victims, and the people who try to defraud them are being held fully accountable. But in their testimony for today's hearing, the VA just gave us five paragraphs, mostly basic overviews of what these programs are and how they work. There's very little about actual oversight. It gives me a little pause that the VA is simply stating what the programs are and that they are being modernized. We're talking about a system that some of the nation's most vulnerable veterans rely on. So to see IG reports titled, quote, "Lapse in Fiduciary Program Oversight Puts Some Veterans at Risk," and, quote, "Failure to Flag Fiduciaries Who Are Removed Results in Risk to Vulnerable Beneficiaries," also makes me deeply concerned. We need more from the VA than bare-bones information on these topics. We need real, honest accounting of the challenges of running these programs, the risks involved in running these programs, and the work being done to protect veterans, their families, and taxpayer dollars. I'm glad we're holding this oversight hearing today, both for a program that rarely makes the news and another that when it does make the news makes bad news. This won't be our end of this won't be the end of our work on this and on these programs. Mr. Chairman, I am excited to continue this oversight and work with you today. Thank you, and I yield back.

Thank you, Mr. McGarvey. I would like to welcome our first panel. We appreciate your time and your willingness to speak candidly about these programs. Today on the panel we have Mr. Tim Sirhal, Acting Principal Deputy Under Secretary for Benefits, Veterans Benefits Administration, and Ms. Jennifer Boyer, Executive Director, Pension and Fiduciary Services, Veterans Benefits Administration. Thank you again. I ask that you both stand and raise your right hand. Do you solemnly swear that the testimony you're about to provide is the truth, the whole truth, and nothing but the truth, so help you God? Thank you. Let the record reflect that the witnesses have answered in the affirmative. Mr. Tim Sirhal, you are now recognized for five minutes, sir.

Good afternoon, Chairman Luttrell, Ranking Member McGarvey, and members of the subcommittee. Thank you for the opportunity to appear before you today to discuss the pension, fiduciary, and insurance programs within the Veterans Benefits Administration. I appreciate the committee's continued commitment to improving the lives of our nation's veterans, their families, and their survivors. Joining me today from the Veterans Benefits Administration is Ms. Jennifer Boyer, Executive Director, Pension and Fiduciary Service. At VA, we take our responsibility to serve and protect veterans and their families very seriously, especially those who may be more vulnerable and need extra support. For example, VA's pension program offers vital assistance to veterans and their survivors, particularly in their time of need. In fiscal year 2025, VA provided over $2.8 billion in benefits to more than 200,000 beneficiaries. Through the dedication and hard work of employees in our leadership teams, we've taken great strides to expedite the delivery of these critical benefits. As a result, we have reduced processing times by more than 110 days for veterans' pension claims, by more than 100 days for survivors' pension claims, and by more than 90 days for dependency and indemnity compensation claims. All while upholding quality standards with an accuracy rate of 97 percent. Veterans' pension claims are currently being completed in 57 days on average, and VA is completing survivors' pension and dependency and indemnity compensation claims in 73 days on average. Another way VA protects veterans and survivors is through the fiduciary program. The program supports more than 104,000 veterans and survivors who are unable to manage their own VA monetary payments. VA appoints and oversees fiduciaries to manage the VA monetary benefits in the best interests of the veteran or survivor. VA also oversees several life insurance programs that provide valuable financial security for service members, veterans, and their families. Programs open to new applicants include Servicemembers' Group Life Insurance for those currently serving, Veterans' Group Life Insurance for those transitioning out of service, and our newest program, Veterans Affairs Life Insurance, or VALife, open to all service-connected veterans. VALife launched in January of 2023. Each applicant can elect up to $40,000 in coverage at any time up to age 80. We designed the VALife application process to be quick and transparent. On average it takes just 11 minutes to apply and confirm coverage online, and more than 90 percent of applications are automated. VA is proud to share that the VALife program has been a tremendous success. Currently, there are approximately 80,000 active policies totaling $2.5 billion in coverage. Customer satisfaction is a top priority. Recent surveys show that well over 80 percent of respondents saying they are highly satisfied, and applications received are close to double those of the Service-Disabled Veterans Insurance program that the VALife program replaced. Importantly, 80 percent of veterans insured under VALife are 70 percent or more service-connected, meaning that the program is operating as designed to ensure those most in need are or who are more likely to struggle finding insurance coverage in the market can get their coverage through VA. Overall, VA is deeply committed to serving and protecting veterans and their families while ensuring we are efficient in delivering on our promises. Mr. Chairman, thank you for your oversight of these critical programs and for the opportunity to speak with you today. My colleague, Ms. Boyer and I welcome any questions that you or other members of the subcommittee may have.

The written statement of Mr. Sirhal will be entered into the hearing record. I now recognize the ranking member for five minutes of questioning.

Thank you, Mr. Chairman. Mr. Sirhal, the Fairness for Servicemembers Act was signed into law last December and requires the VA to review insurance coverage amounts every five years and report to Congress about adjusting those amounts for inflation. The first review and report were due in January 2026 this year, but Congress still hasn't received it. So when can we expect that review to be finished and the information sent to Congress?

Thank you for that question, sir. The review is complete. It has not been provided yet. We will look into, I will look into why it has not been provided, but the analysis has been completed by the actuaries.

Thank you. And I won't speak for the chairman, but a lot of times we agree up here on what we call government speak. And saying I'm going to look into it, that is something we hear a lot. Who has that report and how do we get a hold of it?

I do not know which office has the report. I will find out.

Okay. Is it your job to have that report?

My, the team that is under me generates the information for that report and then puts it through for release. The analysis has been completed.

Okay. So we need that report because it was due to us by January. And again, I'm not, I wouldn't actually plan on this being adversarial at all, but it's your team, your team underneath you has completed the report. You don't have the report?

I do not have the report.

Okay. But you should have the report. Right? If it's been completed and it was due to us in January, you should have it, at least.

I have seen the report and it has cleared my office.

Okay. So you've seen it but you don't have it. Who has it?

I do not know which office has it at this time. I will find out though.

I know, but you cleared it. Who did you send it to after you cleared it? January you should have it. At least.

I have seen the report and it has cleared my office.

Okay. So you've seen it but you don't have it. Who has it?

I do not know which office has it at this time. I will find out though.

I know, but you cleared it. Who did you send it to after you cleared it?

It should be with the department for final review.

Okay. You're the final review, your signature is the one that's going to send that to us.

For me, forgive me.

No, no, please, Mr. Chairman.

This is what the ranking member was talking about. You're playing a chess game with us. That's not going to work in this committee, sir. You're the official signature on the bottom of that report since your team's the one that created it. And you either handed it off, you can't say you handed it off to the department. You mean you gave it to the secretary and he's the one that has not given it to us? That's not how this works either. You're responsible for this department and that report was due to us. Now we can play this game for a very long time, sir. And we can make it very uncomfortable in here. So I think the answer to your question is, sir, most likely is, Mr. Ranking Member, I'll have that to you by the end of the day, if you will. I'll let you answer that question.

I will find out where the report is and make sure it is given to you as soon as I possibly can.

When you say as soon as you possibly can, in your calendar, what does that look like? Because for me, that means when you walk out of here.

I will make the appropriate phone calls as soon as I walk out of here to try to move it.

Because it was due in January.

And you've seen it and you've cleared it. I mean, I think that's kind of what we're getting at here. If you told me it's not finished yet, we would have been like, please get that finished. We would be pushing you, we need a date, we knew it was due in January. But you're telling me it's finished, you've seen it, you've cleared it, you don't know who has it, you don't know where it is, but we'll get it somehow, some way, somehow, at some point. Which I hope you see why that seems evasive to us.

It is not my intent to be evasive, sir. The actuaries have completed the information. The information has been validated by our financial folks. It is being cleared before it is released. I will find out where it is.

You're the guy. And you said that. Now if you want to take that back, you can, if you were just trying to hope we weren't paying attention. Or is there a signature on there that we need, that you need, that you're not telling us?

I mean, there's no... I will find out where the report is and what signature's missing that needs to be on there before it gets released to you. I promise that.

I'd say we could do this all day long and we might come back to this even. I think what you're hearing from both of us, again, I'm going to go back to what I said in the opening. This isn't, we're not, I in no way intended for this to be adversarial. I expected just kind of a plain answer. I'm surprised at the answer I've been given. The report exists, it's finished, it's your team, you've cleared it, but we don't have it and you don't know where it is and you can't tell us when we're going to get it. And for us, that's not acceptable because again, these reports, these audits, the reason this is a five-year oversight, why we're supposed to see this is because it takes care of our veterans. And sometimes we get really frustrated with the VA because it seems like a black hole. And what we really want and what we might even get with you offline before we get out of here is exactly when, and I'm talking like today, tomorrow, by the end of the week, when we get that report, especially if it's finished. That's what we need.

Because he and I and Mr. Self here have to answer these questions to every single person that is sitting behind you right now. And we do. And they deserve those answers. And I can assure you sometimes the conversation is a way more abrasive than what you're receiving right now. And because you're doing this to us, you're going to hear this from me as the chairman. Don't dance around these answers and hope that we're not paying attention, sir. Do you understand?

Sir, I will give you direct answers.

Because the department in its history will come to these hearings and then walk out and that's the end of it. And that's not something the ranking member and I tolerate. Do you understand, sir?

Sir, I fully understand and you have my commitment. I will find out what is missing from...

I will hold a hearing every single day with you. I will make this so uncomfortable if you choose to come in here and do this dance with me. Do you understand?

Yes, sir.

Thank you. I'm sorry.

A couple more questions and I'll yield back because I know we've got stuff to do. Thank you, Mr. Chairman. Mr. Sirhal, I'm going to ask you a few more questions. I am from Kentucky. It's a southern state. Sometimes people ask questions, they mean statements. These are actual questions. I don't know the answers to these questions and would love to get answers to these questions. In your testimony, you state that there are approximately 104,000 beneficiaries in the fiduciary program. How many total fiduciaries represent the 104,000 beneficiaries?

I would defer that question to Ms. Bover.

Thank you for that question, sir. There's about 76,000 fiduciaries that oversee about the 104,000 veterans and beneficiaries in the program.

Thank you for that. And I was looking through this stuff getting ready for the hearing and just curious about how this program actually operates. Is there a maximum number of beneficiaries a fiduciary may represent?

Thank you for that question, sir. I had a similar one when I first took over this position a little less than six months ago. There is not a maximum, but there are additional oversight measures that are put in place if a fiduciary has more than one beneficiary.

Okay. And this is again, just this is a legit question. In your experience, do you think there should be a maximum? Or is the monitoring program you have right now, do you think that's sufficient?

Based on what I know about the program right now, no matter how many beneficiaries a fiduciary may have, each beneficiary deserves to receive the same level of care. And if we find through our oversight measures that that same level of care does not exist, we move to take appropriate actions.

How do you find that out?

So we can find that out through a number of different ways. One of the ways is every single year, each beneficiary receives a letter from us reminding them that they're in the fiduciary program, letting them know what their rights are and letting them know to contact us if they think anything isn't working as they think it should or they're not receiving the care that they believe they should. They also receive a phone call from us as well as an in-person visit and that alternates every year as well. And then for our fiduciaries, we have oversight measures where they have to complete certain actions in a timely manner. So there are annual accountings where they must tell us how that money is being spent. We can do fund usage reports, which is three months' worth of bank statements. And we also do in-person site visits with them as well as appropriate.

Okay. And I'll just ask one more question then yield back to you, Mr. Chairman. We might have time for more questions later. Has the fiduciary program or the Office of Inspector General found that fraud and abuse is more or less likely with what we would consider for lack of a better word professional fiduciaries as opposed to like family members or loved ones?

I'm not sure I have the exact answer to your question, sir, to be honest with you. But what I can tell you is that we always aim to assign the fiduciary of the veteran or beneficiary's choosing. And so that may be a spouse, a family member, a friend. And as a last resort is when we assign professional fiduciaries. And I can tell you that it's less than two percent of all fiduciaries are professional.

Thank you for that. And Mr. Chairman, before I yield back, I would just be remiss if I didn't say, Mr. Sirhal, we need that report. And we need to know exactly when we're going to get it. I yield back.

Thank you, Mr. McGarvey. Mr. Self, you're recognized for five minutes, sir.

Thank you, Mr. Chairman. Mr. Sirhal, I'm going to throw you a lifeline here. From your answers, I'm trying to parse them. Is this report in one of your bosses' offices and you have no control over it?

Sir, the analysis is complete on the report.

No, my answer is a yes or no question. I'm trying to throw you a lifeline here and if it's not a lifeline, just let me know. Is it in one of your bosses' offices?

I will confirm what is pending signature and what is pending review.

I can assure you, I'm about to get a hold of you again. Okay. Now if we're in a place where we can no longer hold this committee hearing because you are way outside your comfort zone and don't want to give us our answers, then I'll do that. And I warned you earlier, sir, not to play this chess game with me. Okay. Are we clear?

Sir, I assure you I am not trying to play a chess game. Mr. Self.

I agree with the chairman. When you come here, we kind of need, we ask simple direct questions, we need simple direct answers. So I want to talk about the veteran engaged in asset transfer to meet the pension requirements. Okay? Now, if my memory serves me correct, there are a couple of elder benefits that it is perfectly acceptable to divest yourself of your assets in order to meet the criteria. So are we talking about a true transfer, true asset transfer here, in other words, giving it all to your kids, your grandkids or something? Or are we suggesting that you're hiding your assets in order to meet the criteria?

I will defer that question to Ms. Bover.

Thank you for that question, sir. In terms of the three-year look back, that is to ensure that beneficiaries, the veterans or the survivors are receiving the needs-based benefit that they have earned and making sure that their income and net worth limitations are under the rate that is set by Congress every year, sir.

Okay. I'm not sure that answers the question. I'm trying to determine if this is consistent with our other policies in elder benefits. But this three-year look back and the criteria, is this a statute or is this a rule in the VA? This requirement for no more than $163,699. Is that statute or is that rule?

I'm going to need to look into that and get back to you to find out if it's in a statute or if it's something that the VA did prior to my time to be able to ensure that the veterans and the survivors were receiving the right amount of needs-based benefit based on their assets that they have.

Okay, so the veteran, and I think this is true, can be banned for up to five years if they are not meeting the actual requirement. Is that correct?

Thank you for that question, sir. I believe that is correct, sir.

Yes, sir. We have an actuary team who sets that every year and revisits premiums every year to ensure that premiums and expenses align with the appropriate reserves.

Let's move on to something you might be able to answer. Your VA life risk. We like to talk about outputs here. Let me get to the right document here. You've got, you're very satisfied with, you now have 2.5 billion in coverage, but you don't tell us, and people are very satisfied with it, 82.6 percent are very satisfied with it. What is the loss ratio on this? What is the risk to the federal government? How does this, how does the loss ratio work in this particular insurance policy? Okay, very good. Mr. Chairman, I yield back.

Thank you for the question, sir. VA life policies are whole life policies, so they build cash value. The program by statute must be self-supporting, which it is. Our reserves have been building over the last three years since January 23, so we have the appropriate reserves for the number of folks in the program, which is approximately 80,000.

Mr. Sirhal, since the SGLI and the VGLI programs were created in 1965 and respectively 1974, has VA ever sought additional insurance providers outside of Prudential to provide coverage to veterans? And if not, why?

Okay, so you're meeting the commercial reserve standards.

Thank you for that question, sir. I cannot attest to whether there was competes 15, 20 years ago, but I can tell you that there has not been formal market research in the last 10 years. That program, the SGLI and VGLI program under the current construct, has been able to consistently increase coverage available, most recently in 2023 with 500,000 and...

Would it make sense in 2026 to compete these programs for lower costs?

Well, testing the market could bring advantages. Doing so would just have to be done very carefully so as not to inadvertently disadvantage those veterans in the program.

I think the transition from one program to another, if it was more cost effective for the VA but more beneficial for the veteran, would make sense. Has your office competed that in any way since you've been in this seat?

Our office has done initial research and...

What does that mean?

It means that we've validated that under the current statutory construct, very few companies would be eligible to compete for the product. And our office has also done analysis to ensure that administrative costs at Prudential...

So Prudential's been there since 1965, so they're so dug in on this after so many years, no other company can carry that kind of weight.

Sir, the statute has requirements of who's even eligible.

Say that one more time?

The statute has requirements on what companies could even compete, and it's less than 10.

Less than 10 companies in the continental United States?

Based on our analysis. The requirements are, and they're pretty simple requirements, but they're difficult to satisfy. A company can only compete for this product if they're licensed to issue insurance in every state and DC and they have one percent or more of the total group policy life insurance in place in the nation. And so it's essentially the top...

How often do we compete this?

It has not been competed to my knowledge since 1974.

To my knowledge it has not. I do not know if there was an effort made prior to that time or prior to the last... So Congress needs to request a report to see if there's any other company besides Prudential that can lower the cost for the VA and increase the benefits for our veterans. Is that what you're telling me? Out of the 10 that you said exist.

Sir, we have looked into and conduct robust oversight. We're very comfortable with our level of oversight. As I noted, testing the market, there can definitely be advantages to that. However, we want to be sure that in doing so, we don't inadvertently do more harm than good by disrupting this important benefit, which I will have to note that in the VGLI program, for example, that there is no underwriting for the first 240 days. And not only is there no underwriting, there's also no health questions, which is very unique in that private insurers are not used to doing typically even in insurance programs in the private industry where they say there's no underwriting, there's still health questions.

All right, just to clarify something for me. So we haven't competed this contract since 1974.

That is correct. And we're okay with that. We are okay with the level of oversight and the performance of Prudential. Is there an opportunity to test the market to see if there's improvements? Yes, there is that opportunity and we...

But we haven't done that.

We have not done that as of now.

That's 50-something years, right? We might want to take a look at that. What is the conversation rate at transition from SGLI coverage to VGLI coverage?

Thank you for that question. In general, VGLI, the application rates are around 23 to 25,000 a year and the conversion rate is around between eight and 12 percent.

But it doesn't make sense to have more options inside the coverage network to lower rates. Obviously not since we haven't done it in over 50-something years.

I will say, sir, that the current construct allows us to focus our oversight on Prudential so that we can ensure that their rates are competitive and VA sets the rates, which we've been able to drop consistently over the years. Our last time in July 2025, we dropped the rates for all active duty service members, all veterans, all spouses, and it should save them based on our projections over $2 billion over the next 10 years.

I mean, that's great. I mean, those are fantastic numbers. I just out of morbid curiosity I would think there out of the other 10 that exist that could possibly do this, could it be better? But we don't know that because we haven't done it in over 50-something years.

Sir, the one other note I could make if you wouldn't mind is because the contract was put in place in 1965, without getting into the details here in a public forum, there are advantages...

Is it classified?

It's not classified.

Okay.

But there is advantageous provisions in that contract, so I would want to be very careful not to disrupt that and inadvertently put VA in a position where we had less bargaining power if we were to either engage with Prudential or test the market.

I feel like I should unpack that. In 1965. Okay. That's 61 years, right? Okay. Last question.

I'm going to kind of go into an area that the chairman was just getting into a little bit as well and this is about the life insurance program. I want to raise a real concern I have about the transition from SDVI to VA life. And you know, kind of what you're, I hope you're gathering from this committee, this committee is not about scoring points or getting one over on one another, this is about doing what's right for our veterans, our men and women who put on that uniform, put that flag on their shoulder and said we're going to, we're going to serve and be willing to sacrifice everything to keep this country safe and free. When the grace period expired, veterans lost the ability to keep their existing SDVI coverage during the two-year waiting period before VA life coverage began. Now that created a coverage gap. So I understand and I grant this, it is one thing to apply a two-year waiting period to new applicants, people who were not previously enrolled in an insurance plan. It's a totally different thing to talk about people who are doing the right thing, who were carrying life insurance, who were paying their premiums, but then are being told that they have to go without coverage for two years before the new plan kicks in. That's administrative. Right? That's not acceptable. And I don't think we should put our veterans at that sort of risk, a two-year gap, and we all know a lot can happen in two years just because of an administrative change. So has the VA tracked how many SDVI policyholders have switched to VA life insurance since January when the ability to carry both policies expired?

I can confirm that number, sir.

Okay. Okay, and this is one we want those numbers. And I understand you don't have it today, but we want it and we want it as soon as you can gather. You know, just a couple of quick things I wanted to get to in our first round of questioning. Go back to the fiduciaries. And you know, obviously this is something I'm very concerned about because for a veteran who is using a fiduciary, that is someone who's in trouble. Right? You know, they're in crisis, they've had something in their life where they need a fiduciary to handle their affairs. But I want to talk about what's happening when fiduciaries are assigned to minors, minors related to veterans, because you know, obviously there's a lot of opportunity for potential wrongdoing or abuse in that type of system. How often does the VA review the finances of a fiduciary assigned to a minor?

So thank you for that question. So all of our fiduciaries do, we do have oversight over all the fiduciaries. And so there are, for example, annual accountings that we would do and then we assign a fiduciary for a minor as it's based in statute.

Okay. And again, I'm asking you legit questions. You guys are the experts on this. We're just trying to make sure our veterans and their families are taken care of. And tell us if you don't think this is the case. Like we want to help. Do you think that, do you think that's often enough?

So I think the oversight procedures that we do have in place, you know, I've mentioned some of the accountings and fund usage reports and insight visits, also reaching out to the beneficiaries themselves, not if they're a minor. And we also run clear reports on them every single year just to make sure that nothing has changed in their life that may lead them down a path that's not acceptable. So and we also try to assign the fiduciary of the beneficiary's choosing. So I do believe the oversight that we have is adequate and that we have to continue with what we're doing to ensure that every single veteran and beneficiary is being well taken care of and that their funds are being well managed for their own benefit.

Thanks. And that's what I mean, these aren't trick questions, right? Like if you think it's adequate and it's working, we want to know that. If you don't think it's adequate, we want to get you what you need to make sure that it's adequate. I think, Mr. Chairman, I can stop there.

Mr. Self.

Thank you, Mr. Chairman. Mr. Sirhal, the criteria used to determine when a beneficiary requires a fiduciary, what due process protections are in place? And specifically, I want to talk about the in the past, the allegations that someone that might have been able to handle his finances had a fiduciary because of other factors. So criteria, due process, and exactly who gets a fiduciary.

Sir, I can address parts one and two of that question, and part three I'll defer to Ms. Bover. No fiduciary should be appointed unless there's medical evidence of their incompetency to handle their VA funds. And I will make that distinction, the medical determination is only about managing VA funds, it does not extend beyond that into your ability to conduct yourself in any other way. And as far as the due process, prior to any finding of a need for a fiduciary, there is a due process period, it's at least 60 days. After the expiration of that 60-day notice, the veteran or beneficiary could submit any information or evidence to dispute and show that they in fact can handle their funds. And after that point, if the incompetency rating is completed, it is referred to the fiduciary hub who then finds a fiduciary and works with the veteran or beneficiary. As far as the process once the referral happens to the fiduciary hub, I will defer that to Ms. Bover.

So to assign a fiduciary, we have to first do our due diligence to make sure that the right person is assigned that can appropriately care for that veteran or beneficiary. So we do a criminal background check on the fiduciary as well as a credit history check. In addition, we personally meet with the...

No, I'm sorry. My question deals with the veteran him or herself. Is it only do you decide on mental acuity? Are there other factors outside of a mental acuity to handle financial funds that you might assign a fiduciary?

So the VA doesn't necessarily make that determination. We are taking the medical evidence as Mr. Sirhal said. So for example, a doctor may state that a particular veteran or beneficiary for whatever reason is not able to manage their VA finances, and that's what we use as our evidence to make a decision. So we don't override what a medical doctor would say.

Okay. Mr. Sirhal, how many allegations of misconduct have you received in the last year in the fiduciary world?

I would defer that to Ms. Bover for the data points.

Thank you for that question. On average, we have about 165 cases a year that are substantiated for misuse.

So that is confirmed misuse, 165.

Correct. And that's less than one percent of our complete portfolio.

Okay. So what is the restitution process? Is there one?

Thank you for asking that. I think first and foremost, as we've talked about, we're always looking out for the best interests of our veterans and beneficiaries. So if misuse is substantiated, the most important thing to know is that that veteran or beneficiary is made whole, meaning they get that money back. Additionally, when that happens, we also refer all of these cases to the Office of Inspector General. And if there's a surety bond on the financial account, we would go after getting back that money through the surety bond. We also encourage anytime that somebody believes that some kind of misuse has happened to report that to the Federal Trade Commission as well.

Okay. Mr. Sirhal, last in my last 30 seconds, why does VA allow surviving spouses who remarry but later to divorce to reapply for DIC and survivors pension?

I would defer that question to Ms. Bover.

So I think your question was if there is a survivor that is currently receiving pension or DIC, I believe your question was what happens if they remarry? Is that correct?

No, it's a surviving spouse who remarries and then divorces can reapply for the benefits.

Yes, sir.

Surviving spouse.

Yes, sir.

Do you believe that that's what Congress intended with the black and white letter law?

I believe that what we all want is for surviving spouses to receive earned benefits.

Well, the question is earned benefits when they remarry are terminated.

There are remarriage restrictions for both our dependency and indemnity compensation as well as our pension benefits. So for pension benefits, if they remarry at any age, they lose that benefit. For dependency and indemnity compensation, if they remarry before the age of 55, they lose that benefit, sir.

Right. My time is up without answers, Chairman. I yield back.

Thank you, Mr. Self. You know, if the VA just let them keep it and didn't take it away from them in the first place, we wouldn't have that problem. [Applause.] Ms. Bover, what do you believe are the biggest communication challenges for surviving spouses and what they face with the VA today?

So I think this is an area that the VA has made tremendous strides in over the past year. I can tell you since I've been...

Over the past year?

Since I've been here, about the last six months, I have done my part in ensuring that I'm actively engaging with the survivor community to hear what their concerns are and take action on their concerns. We want nothing more than to ensure that they know about what benefits they're eligible for and that they're able to apply for them.

How are we doing that? Generationally it can be challenging. The younger spouses, I don't mean any disrespect when I say this, but the younger generation is very engaged in digital media. The older generation may not be. How are we touching them both?

I appreciate that question. So while VA is moving more towards a digital platform, we still have our paper. So we still send things out via mail. Surviving spouses are still able to come and see us in one of our public contact team units in person. There's one in every state. And so for those that are comfortable, there is online resources, they can apply online for all of our benefits, research our benefits. For those that are not comfortable, again, we do have paper forms of paper of explaining those benefits.

I'm sure the digital pipeline is very streamlined. It's start to finish from the spouse to whomever's on the receiving end. What does the paper trail look like? How many hands does that have to go through? Because then it has to be inputted digitally from somebody internal to the VA, correct?

So I'll answer that twofold. If the surviving spouse goes online to va.gov and applies, that information is automatically received by the VA to be worked. If they choose to fill out a paper form and mail that, that goes to our scanning vendor and our scanning vendor then scans that and puts that into our system. So if something is mailed, right, we have that delay of the postal service, and so it is a little bit quicker if they go online. And if they don't have those resources to your point, sir, we can assist them with that in one of our public contact team units in every state, or we also encourage them to work with an amazing veteran service organization.

How does the VA respond and how long to a spouse that submits it through the mail? Do they respond? They'll have to obviously respond with a letter. So when it hits the VA, then it has to be scanned in. And then once it's scanned in, they'll populate a report or that says, hey, this is done. And then that report has to be mailed back to the spouse, correct?

So whether they apply online or...

No, no, no. Not online, just snail mail.

Yes, sir. Either way that they apply, we are providing those decisions about 100 days sooner and those benefits are getting into their hands well with under 90...

I'm kind of running in a different lane all of a sudden, I apologize. I want some of the questions that we get is I'm not getting any response from the VA that this has been done. So my again, my question is if snail mail comes in and is scanned into the system, now they're in the system, but they don't know that. Does the VA populate a letter and mail it back to them or are they just kind of...

Great question, sir. So years ago, because processing times were so high, there used to be a lot of different communication going out so that people knew that they were not forgotten and that their claim was being processed. Because we are processing claims so quickly now as well as accurately, they do not receive as much communication because that time span has greatly shortened.

Okay, you're still kind of dancing around my question here. How does my mother, who doesn't know how to turn on a computer, receive a response from the VA in the mail? Or will she receive a letter in the mail from the VA that we have scanned your information and it is in the system?

Because we're processing those cases so quickly now, a lot of those interim communication points are no longer existing. However, when a decision...

Does that mean no? I'm sorry.

Yeah, when a decision is made, they will receive something via paper, sir. And I can also tell you that for dependency...

When the decision is made, but not, hey, we have received your letter.

Correct.

Now help me out on this because where I live, it is country. All right? And my veterans, which I have 40,000 veterans in my district, and some of their biggest complaints to me is like, I don't know if the VA has received me.

And so one of the advances that we've made or changes we've made over the last year, especially with our dependency and indemnity compensation cases, is that we are reaching out via telephone personally to these survivors. So if we are missing information, we are reaching out and making sure that they understand what they need to get us so that we can quickly provide them the earned benefits that they have.

Okay, I think we've got kind of an every district's different. Some of my folks don't have telephone, oddly enough, and they absolutely do not have a cell phone. I live, that's the kind of folks that I represent and they are all in. Do I need to have my VA, how does, they're not getting the information, I guess is basically how I'm saying it. They're not receiving any notifications whatsoever by mail because they don't have internet, they don't do the phone thing. So I think my question now is, does the VA respond by paper mail once an applicant's information is input into the system? That's a yes or no question.

Understood, sir. No, not...

No, they do not. Okay. We're going to have to, we're going to have to figure that one out. That's a big deal. All right, not so much for folks who live around the city and can do all the live in the metaverse, but for the country folks that I represent, they need that. All right? We're going to have to figure something out. Fair enough?

Yes, sir.

All right. What are the most common financial mistakes or missed opportunities the survivors can, what that happened to them? Is there a, is the VA tracking, like if they submitted an application and it's processed and they're going to resubmit, it's like, hey, you missed something. I think that's a breakdown of communication. Is there a, do we have a, I don't know if you want to take a survey or kind of a, is there a language model that we're utilizing inside the VA that populates something for the spouses to say, hey, make sure you're taking a look at this because we've noticed that most of the spouses may miss this opportunity?

So we do not have something like exactly what you're talking about, but what I can tell you is that we have made a lot of changes over the last year. So for example, we have started sending pre-need, pre-planning information to veterans while they're still alive so they can have these conversations with their spouses on what benefits they may be eligible for. When we hear that a veteran has passed away, we're immediately, to your point, sending a letter to let them know what benefits they may be eligible for. And I think something that's super important that we have done is that if in certain circumstances, and I'll give you an example, if a veteran is 100 percent service-connected for more than 10 years and they pass away and they have a spouse on record, VA is automatically providing them their survivor benefits without them having to apply within six days. And we have done about 100,000 of those just so far this fiscal year.

Within six days.

Yes, sir.

Okay, so if I pass away, talking hypotheticals.

Yes, sir.

If I pass away, my spouse will receive benefits. There's a six-day gap or...

So from the, again, there are certain situations. So if we know that, for example, in your, if you were 100 percent service-connected for more than 10 years and you pass away because we don't have to look into whether the cause of death was related to service and there was a spouse on the award, yes, sir, we are automatically paying those benefits from the time we find out about the death to that spouse on record within six days. In fact, about 40,000 of those this year have been within one day and the spouse does not have to apply for those benefits, sir.

So the survivor's pension application is roughly 20 pages long, correct?

The current application is, yes, sir.

In that application, does it describe every single pension benefit possible for the spouses or is it something they've got to go hunt for?

So the, I may not be asking that right, but go ahead. Yes, sir. That exact form, the 21-534EZ, is a claim for three benefits, which is the accrued benefit, pension, as well as dependency and indemnity compensation.

Three benefits?

Yes, it's three benefits.

Is there only three or is there more than that?

There's also burial benefits. And there is a, it's a little nuanced. There is a separate form for burial benefits. However, if we do grant service-connected death, we can also automatically pay burial benefits, sir.

Can or do?

We do if we grant service-connected death, we can automatically pay those benefits based on the form they submitted, sir.

Why can't we package all that together?

So that is our way of having all three benefits on one form. Sometimes for burial benefits, it is not necessarily the surviving spouse who may have incurred that cost, or it may not be service-connected. But again, when it is, we are paying those benefits based on that one application.

So there's five total, if I understand. Burial and the other one you mentioned.

So there's the 534EZ has accrued, dependency and indemnity compensation, and pension. So three. And then again, if we do grant service-connected DIC, we will automatically pay that.

How would a surviving spouse that lives in Coldspring, Texas know all that's available? If you don't know where Coldspring, Texas is, I mean, we're really excited about it. They just got power out there. We don't always use water, you know, that kind of thing. It's a very remote place. And if you're listening, Coldspring, I love you to death. I'm here for you. But those spouses out there, they're not, how do they know all that information? Because they're not going to get online to get it.

Yes, sir. So in those cases where we're not able to process automatically, we are sending them a letter. So they will, those folks will receive a letter in the mail.

Okay. You got anything else? Mr. Self?

No, sir.

Okay. Ms. Bover, Mr. Sirhal, thank you very much for your time today. Mr. Sirhal, look forward to hearing from you, the ranking member and I, okay? Thank you. Are we ready? Ms. Sipes, you ready? It's going to be a great day. It's going to be a great day. And we appreciate you guys coming to chat with us. I would like to introduce Ms. Tamera Sipes, National President, Gold Star Spouses of America, and Mr. Joseph Barnett, Vice President of the Office of Servicemembers' Group Life Insurance, Prudential Financial. I'm sure you got a kick out of what I was just, we'll talk about that. I ask that the witnesses please stand and raise your right hand. Do you solemnly swear that the testimony you're about to provide is the truth, the whole truth, and nothing but the truth, so help you God?

I do.

Let the record reflect that the witnesses have answered in the affirmative. Ms. Sipes, you're now recognized for five minutes to present the testimony on behalf of Gold Star Spouses of America.

Thank you. Chairman Luttrell, Ranking Member McGarvey, and distinguished members of the subcommittee, thank you for the opportunity to testify today on behalf of Gold Star Spouses of America. My name's Tamera Sipes, and I serve as the national president, and I'm also a surviving spouse. Like so many others I represent, many here today, my life and my family's life was changed forever by my husband's service and sacrifice. For us, VA programs are not abstract benefits. They are the foundation of our financial stability, our access to care, and our ability to move forward. Surviving spouses navigate grief, financial transition, and complex administrative systems all at the same time without clear guidance, timely communication, or processes that reflect the realities of their lives. These are not minor inconveniences. They have real consequences. While there have been improvements, further efforts are needed across the pension fiduciary and VA life programs. Many surviving spouses are confused about how the survivor's pension works, especially alongside dependency and indemnity compensation, DIC. Survivors turn to the pension program only to find that the income threshold, approximately $11,700 annually, is set well below the poverty level. The term pension can be confusing for survivors as it's understood as a collective benefit as opposed to just one component of possible survivor benefits. As a result, many survivor spouses spend time and emotional energy applying only to be denied. The issue is not just eligibility, it is clarity. Survivors need plain language explanations up front so they can understand whether they qualify before entering the process. And we urge Congress to examine the current threshold for survivor pension eligibility to better align at least up to the federal poverty level. While we appreciate the VA's efforts to modernize, a digital-first approach will unintentionally leave many survivors behind. Nearly a quarter of seniors do not regularly use the internet, or they live in rural areas. For many surviving spouses, mailed correspondence is not outdated, it is essential. An annual benefits letter, while many do not receive, sent to all surviving spouses would serve as a reliable touchpoint. We have also heard from survivors who were not informed about the one-year window to move death gratuity and SGLI benefits into tax-advantaged accounts. By the time they make these decisions, the opportunity has often passed. Survivors should be proactively informed, are given structured options before funds are distributed, rather than be expected to navigate these decisions during the first year of profound loss. One of the most immediate and personal issues for many of our members is the fiduciary program. We have heard consistent concerns about burdensome and confusing requirements, specifically involving biological children. In some instances, surviving spouses who were previously recognized as competent beneficiaries for their children are required to establish fiduciary arrangements solely due to remarriage. This can feel misaligned with reality and adds unnecessary stress. While oversight is important, current policies create unnecessary burdens on surviving spouses. In addition, we would like to recognize and commend the VA for voluntarily moving the Office of Survivors Assistance back under the Office of the Secretary in May of 2025. Although this administration action alone is not a durable safeguard, without a statutory requirement, OSA can be moved again, leaving survivors without consistent access, authority, and visibility at the department's highest level. We respectfully ask for action on HR 1228 clarifying the law is necessary to ensure this does not happen again. In closing, unclear communication and eligibility requirements can result in delayed benefits, financial instability, and unnecessary hardship during an already difficult chapter in life. We can better honor our surviving spouses with not only our gratitude but our commitment to ensuring the systems designed to support them are clearly communicated, equitable, and responsive. Gold Star Spouses of America stands ready to work with this subcommittee and the VA to advance solutions. Thank you for your time and I look forward to your questions.

The written statement of Mrs. Sipes will be entered into the hearing record. Mr. Barnett, you're now recognized for five minutes, sir.

Chairman Luttrell, Ranking Member McGarvey, and members of the subcommittee. My name is Joe Barnett and I am Vice President of the Office of Service Member Group Life Insurance. On behalf of Prudential, thank you for the opportunity to testify today. Prudential is proud to serve as the administrator of the Service Member Group Life Insurance program, also known as SGLI. We recognize the trust the VA has placed in us to support service members, veterans, and their families during moments of profound loss, injury, and transition, and we take that responsibility very seriously. Today, the program provides approximately $1.25 trillion in life insurance coverage to more than 5.1 million service members, their dependents, and veterans. Since inception, the program has paid more than $35.2 billion in benefits, including life insurance benefits and traumatic injury payments under Traumatic Service Member Group Life Insurance. Prudential was founded more than 150 years ago with a simple purpose: to help working families find peace of mind at a time when few financial protections existed. As our CEO Andy Sullivan, a veteran himself, often notes, Prudential started with something as basic and human as burial insurance. While our business has evolved over generations, our focus remains the same: being there for people when it matters most. That commitment is reflected in Prudential's role in partnership with the Department of Veterans Affairs administering life insurance programs for the military community, beginning with Service Member Group Life Insurance. The SGLI program was established by Congress to ensure that service members have access to affordable guaranteed issue life insurance. Under the statutory framework, Congress sets the requirements, the VA provides oversight and issues implementing regulations, and Prudential administers the program through OSGLI in strict accordance with those requirements. Coverage under the program is automatic for service members and includes continuation of coverage following separation, extensions for totally disabled service members, and protection for qualifying traumatic injuries. Through OSGLI, Prudential administers claims with care, processing them, processing claims initiated through the military service in accordance with VA policy and communicating directly with beneficiaries as appropriate. In addition to SGLI, OSGLI disperses timely payments of Traumatic Service Member Group Life Insurance or TSGLI benefits, which provides tax-free lump sum financial support to service members who suffer qualifying traumatic injuries, and VGLI, which allows veterans to continue their life insurance coverage following separation from service. OSGLI plays a central role in outreach during transition, helping ensure awareness of continuation of coverage under VGLI after military service, including the opportunity to apply for coverage without the need to qualify medically and the potential for disability extension coverage. In closing, Prudential's role in regards to these programs is not simply an operational responsibility, it is a solemn trust. We deeply value our close partnership with the Department of Veterans Affairs in fulfilling these promises to those who serve and the families who stand behind them. Thank you for the opportunity to testify and I look forward to answering any questions that the committee may have.

The written statement of Mr. Barnett will be entered into the hearing record. Mr. McGarvey, sir, you're recognized.

Thank you, Mr. Chairman. Mrs. Sipes, thank you so much for being here. Thank you for your service. Thank you for your sacrifice. Thank you for turning that pain into purpose and for helping so many people across the country. I'll start with you, and you raised concerns in your testimony about the fiduciary program and how it treats minor children, especially those receiving dependency and indemnity care or DIC as we call it, and who are living with a parent who just happened to remarry and find love again. Can you elaborate a little bit on that, please?

Well, if you're a parent, if you're a surviving spouse and you have minor children, you receive dependency indemnity compensation for your children, for yourself. There is no site visits, there's no quarterly reports that I have to give as a parent. There's no, I am their biological parent. So when I, if I were to remarry or that surviving spouse remarries, all of a sudden it turns into where you're not the parent anymore, now you're a fiduciary. You have to go through site visits, you have to go through quarterly reporting, you have to account for, you know, if all of those funds come in, where they go. And so as a biological parent, you are treated differently.

Which makes no sense. Correct. Thank you. You know, it makes absolutely zero sense to me whatsoever. And I think it highlights another aspect of how completely unreasonable and out of touch the remarriage penalty is for survivors and why passing the Love Lives On Act is so important for us to get done this Congress. [Applause.] Don't, don't clap for me. The biggest champion of this in Washington is sitting right here at the head of the dais in the Chairman Morgan Luttrell. [Applause.] And I say all that, none of those were applause lines. I mean, we really, he does this, we do this because it's the right thing to do by our veterans and their families. And again, Mrs. Sipes, I really appreciate your willingness to speak up. I know it's not easy. And the fact you're doing it is going to help a lot of people in this country out. I also want to ask you a little bit about the income limits for the VA pension programs. In your opinion, are those limits high enough?

The pension program is is set up, I mean, $11,700, you have to be destitute. I mean, they they don't qualify for anything else. They they're not even at a federal poverty level and it's just an offset. So so if you're making 10,000, they're going to send you a $1,700 check for the year to get to that 11,700. I mean, how can you even live off of that?

You can't. Right. The federal poverty level is just above $15,000. This is just above $11,000. And of course you are dealing with all the other complexities that go with losing a spouse and all of the other paperwork and forms and potential needing to get yourself back on your feet or whether you have a job or don't have a job or can keep a job and just everything. And then you're filling out these paper, you fill out this paperwork to either one, go all the way through it and then find out you don't get it. Right. Or two, find out you get it and it's, I mean, I guess it is better than nothing but it's still a little bit of a slap in the face that it's so low. So, Mr. Barnett, in my remaining time I'm going to switch to you. As I understand it, premiums in the insurance program increase with five-year age increments. They increase with age in five-year increments, I should say. Logically that makes sense. Older someone gets, the more it costs to insure them. But I worry that these rate increases hit just as policyholders are moving into their later years and often onto a fixed income. And that makes the insurance harder to afford at the moment they need it most. So do you or VA track how many people drop their insurance coverage and if you do, do you get reasons for why they do it?

Thank you for that question, Ranking Member. I would be able to, I don't have that information with me right now. I would be able to go back and and bring that to the committee.

Yeah, and I think, you know, having both the number, having the number is helpful just in and of itself. To the extent you have the reasons why, also instructive for us. And again, the goal of this committee is to do right by our veterans and find out what's happening to them, what's impacting their lives, what we can do to make that better and easier for their service. What kind of flexibility are you able to offer when a policyholder is having trouble making payments?

Thank you for that question. With respect to to policyholders who are struggling with payments, what we what we would do is, you know, counsel the individual. They have the opportunity to lower their coverage obviously to save cost. I know that's not necessarily the the best solution, but as individuals age they may not have a need for a higher level of of insurance coverage. Other than that, what we do is we operate the program under the terms, you know, as dictated in Title 38 and statute and the regulations approved by the VA.

And I'll just ask you one more question, Mr. Chairman, if I can. One of the selling points of VA's insurance programs is that they offer better rates and better premiums than most private sector insurance. But that's not true in every circumstance, is it?

So generally speaking, with respect to, you know, what's open in the available market versus what the VGLI program represents, the again, with guaranteed issue coverage at time of separation for a service member, you know, provided you apply within a 240-day window, there is no need to provide evidence of good health. So what we have under the VGLI program is a mix of individuals who are healthy and a mix of individuals who may not be and would not be able to receive, you know, private insurance in the open market. So it really is going to depend on the underlying insured whether or not they'd be able to obtain those rates in the market.

Normally I don't accept it depends as an answer, but in this particular instance I know that it's a little bit complicated with how it does. I think what I want you to take away from my question and hopefully what you've heard throughout today's testimony, we want to do everything we can to help our veterans. We want to do everything we can to, I think it's honor, we make our veterans two promises. We make them a promise we're going to be there for them, but that promise is a legal promise and in my opinion that promise is a moral promise. And I think we have to honor both of those. So Mr. Chairman, I yield back.

Thank you, Mr. McGarvey. Mr. Barnett, how much does Prudential collect off the veteran community as opposed to they pay out each year?

Thank you, Chairman, for that question.

Because you said that you're going to drop rates on someone who can't make the payments. I'm curious of how much money you guys make as opposed to how much you pay out, would you actually have to take that money from the veterans if they're in need?

Yeah, first thing, if I could just refer back to the last question. You know, premium rates are set by the Department of Veterans Affairs. Prudential simply serves as administrator of those. So with respect to VGLI, we would be providing the billing, the record keeping and billing for those, but we're not responsible and do not influence what those rates are. With respect to—I'm sorry, can you repeat your question?

How much do you guys collect?

Yes. So Prudential receives premium under the contract.

Which is how much?

Premium we receive about $1.4 billion in premium.

$1.4 billion each year is how much you guys collect?

$1.2, $1.4 billion in premium.

How much goes out?

$1.2 to $1.4 billion.

You pay out every penny you bring in, you pay out each year?

Yes, and for the way in which the program works under statute, it needs to be self-sustaining, right? That means the premiums need to be able to support the administrative expenses and the claims being paid under the program. It's defined by statute, the regulation.

All right, administrative expenses aside.

Okay.

How much do you pay out to the spouses?

To beneficiaries?

Yes.

Approximately $1.25 billion.

And what do you pay your admin? Admin expenses aside, because if I'm understanding how you just said that, you take in $1.2 billion and you pay out $1.2 billion. Aside of admin costs, how much go to the beneficiaries? Do you pay your admin staff $1 billion and you pay the spouses $2 million?

No. No. The claims being paid is $1.2 billion.

Claims being paid is $1.2 billion.

Yes. And and if I could, premiums come in, claims get paid out, administrative expenses get paid out. In the instance that there is a net gain in that situation, that money is retained by the program, held under a reserve under the group policy to protect against adverse mortality in the future. So that means if there was a situation where all of a sudden death claims skyrocketed.

Yeah. Okay, still trying to do the math on $1.2 is taken in, $1.2 is given to the beneficiaries, and I'm trying to figure out where the admin money is.

Oh, so Prudential, yeah, so one other thing is, right, so Prudential in taking in this premium and holding this money in reserves, we do invest those funds within Prudential. We are subject to regulatory oversight by the New Jersey Department of Banking and Insurance. Again, under strict insurance regulation with the VA approving how returns are reflected through the crediting rate. So at the beginning of every policy year, Prudential declares a crediting rate for the reserves held under the group policy, and then that is applied to the reserves that are being held.

Seems like I need to take a deeper dive on this. Does Prudential I'm assuming you guys are aware of each beneficiary in the program, correct? Their names on your books and how much is going out, correct?

Yeah.

All right. Here's my question. The VA is a very large machine. All right. And please don't take away what happened earlier today, it's normally not the case, but when they warrant a wire brushing, they will absolutely get it from the ranking member and I. Okay? But as large as this machine is, and Ms. Sipes even hit on this, communication to each beneficiary is very challenging. Does Prudential engage in communications or is all communications to the beneficiary done by, with, and through the VA only?

No, this would be through Prudential.

It will be?

It is through Prudential.

So you're the one reaching out to all the beneficiaries, not the VA.

Correct.

Then you're the problem.

With respect to?

Well, the lovely young lady sitting next to you says that the beneficiaries receiving information is not adequate. And if it's not adequate, it's got to be coming from you guys, which you just said it was. So now my conversation is directed at you, not the VA.

I did not hear that specific to the life insurance programs.

Did I miss something? What was it?

Specific to the my apologies to the insurance programs in regards to options available for investments within the one year after their loss.

Yeah. So what Prudential does is, right, we will provide a beneficiary election form to individuals. They're able to elect whether they receive that payment via EFT or check. We do offer beneficiary financial counseling services to those individuals under the terms of the program, and again, this is all under the oversight of the of the VA. It's a non-solicitous program that allows for 20 hours of financial counseling for individuals. We do send those under the oversight of the VA. I'm not aware this is the first time I'm hearing of that being an issue. And with respect to being able to place those funds into like a Roth or some kind of yes. Yes. We we are unable as Prudential to provide financial advice or solicit any type of products under the SEGLI program.

I'll come back to you, Mr. Barnett. Thank you.

Sure thing.

Ms. Sipes, this is a request. The amount of information that you and the other young ladies and gentlemen in the room have because again, you're on the receiving end of all this. And as hard as the VA works, and they do. And I will say that all day long, they do. And the amount of information that they can kind of take in and process is coming from every direction, a thousand different directions from a thousand different issues. Okay? How do we to help the VA navigate these challenging waters, how do we get out in front of it, so to speak? How do we take all the information that you all have that is challenging for you all and put that in a place that the VA can either either it may exist already and they just need a little streamlining or is there a way that we can provide that information to remove the problem entirely? Because by the time it shows up here, it's a problem. Do you have the ability to communicate with the VA openly and are they listening?

They are listening. They are I do believe that they are they are trying and they are trying to find some solutions. However, I can tell you that if you asked everyone in this room even on the on if they receive a letter of benefits or not, you're going to have a different response.

Say it one more time?

That you're going to have a different response on surviving spouses on whether or not they receive annual benefits letters, on what's on that letter, on the communication that they receive from the VA and having clear communication has been our most challenging it really has been. The the one-year time frame for folks to be able to invest funds, the SGLI, the death gratuity, there are spouses that have not been able to do that within that one-year time frame, didn't even know it was available.

Mhm. So how do we help the spouses that don't know that? Don't throw it back at the VA. Right. They're on their they're going to that I got it. How else can we fix that problem? How else can we communicate to our our service members and the spouses to to kind of hey frontload this issue? I'm going to be dead one day, I know that.

Well, we've moved the office recently of the survivors assistance back to under the Secretary.

What is the best way to get that information to folks that don't get on the worldwide web?

They they need to mail it. They need to mail it. They need to they need to do a multi-communication. They need to do a digital and a mail. They need to get the information because there's not a lot of us.

You know and we're transitioning transitioning into a generation that knows nothing but digital. And it's our older veterans that are absent of that. Right. And I've had conversations with many folks good, bad, and different. How long do you wait to make the full transition or do you go put it in place and do whatever you can to make sure that our World War II, Korea, Vietnam, Gulf War veterans are taken care of? That's a very hard question to ask because where we currently sit with the advancements in machine learning and artificial intelligence, everybody in this room's got a phone in your pocket. That's where we're going. We're there. We're not going, we are there. And we are on the VA on a daily basis to say you need to upgrade and advance your AI systems to take care of our veterans and you leave a small segment of those of those veterans behind because they don't they do not touch the digital space. So back to the question that I asked you is like how do we continue to do that? Now the VA will mail out as best they can and touch those folks.

Rather than an rather than automatic can they not have an opt-in? Can they not can they not work alongside the rest of the world how they choose to opt-in to something electronic?

We're talking about we're talking about a generation that is already we can do that with service members that are entering into the VA space now. But what about the ones that are we got to you know then we'd have to find them.

Right. Well, there's that. Yes.

And that's the challenging part. You got anything?

I just wanted to ask one more. Mr. Chairman, I as usual I appreciate your work and your advocacy in all these areas. Mrs. Sipes, I couldn't help but when thinking about some of the things you're talking about right now and these issues as you said, Mr. Chairman, for the people not just you but all the people behind you and all the people who aren't in this room who I know are working on this. You guys have a lot of really valuable insight and input to share. There is a Veterans' Family Caregivers and Survivors Advisory Committee within the VA. I just looked it up really quickly from what I can tell online it has not met since June of 2024. Is that correct? Am I missing something there?

Well, I am not aware of it.

Okay. Do we know who was appointed to that committee?

We do not. I I'm sure that our the office could tell us who that was, but

Okay. I think that's a we have that there for a reason. I think that's something we should also look into, Mr. Chairman. I yield back. Thank you. In closing, after being here and hearing some of the things we've heard today, I'm actually, aside from the promise we've made to our veterans to honor their service, to honor their sacrifice, to be there for them after they have served us to keep us safe and free. I'm reminded actually of a quote I sometimes use from an old John Prine song: "It don't make no sense that common sense don't make no sense no more." I think we could use a lot of common sense on some of these issues, Mr. Chairman. When you have Gold Star spouses, they don't, they need to be treated as heroes and as parents, not as guardians and fiduciaries. When we have Gold Star spouses, they should be allowed to remarry without penalty of losing their benefits. When we have reports that are due to Congress by January of 2026 and apparently they are completed and reviewed and cleared, we should know where they are and be able to see them and feel like we have a partnership, not a black hole in certain areas. The common sense thing to do is again to take care of our veterans. And I think that is something that you'll see us continue to do and Mr. Chairman, something I, I appreciate your approach to these matters on and look forward to working with you with.

Absolutely. Thank you, sir. The VA staff is still with us and your job is never supposed to be easy. I'm saying that as a veteran. You get up every single morning and you show up to work and it's a grind. You're never going to have the right answer, you're always going to make somebody upset, but you keep showing up and you keep grinding and for that, you have my utmost respect. Thank you so much. In this wonderful place that we live in, there has to be oversight, there has to be the hard questions. You have to field those questions because you touch the veterans directly. We hear from our veterans, you are the touchpoint. It will never be easy. If it's easy, you're in the wrong department. But it's necessary. And the Ranking Member and I have made an agreement when we got in this thing together that we would be unified on our efforts to hold the VA accountable for everything that our veterans are asking for. And we will not stop because they deserve it. To our Gold Star families that are in the room with us today, we pray for you every single day. I don't have the right answers, I don't have the perfect thing to say and I never will. The weight that you carry every day and the things that you ask for are very warranted. And no one will ever know that more so than you. Period. And Mr. McGarvey and I and the rest of the members in this subcommittee and on the main committee will do everything in our power to get you what you ask for because we know you deserve it. We do. And that communication goes from us, it goes to the VA, goes to the secretaries, it goes to the President, goes to the Vice President, goes to everyone because there's no more cherished asset in the United States of America than the veterans, service members, and their families. Period. We wouldn't be sitting here today if it wasn't for you. And now, no longer in the game of fistfight, but I'd argue that with anybody all day long. So this oversight hearing pulled out a lot of information that we've going to be paying attention to. So Mrs. Sipes, God bless you. Mr. Barnett, I'm not going to ask you if you're the greatest insurance provider on the planet because you've been doing this for over 60 years for our veterans, so obviously you're doing something right. Okay? Mr. McGarvey, that's all I've got. So with that, this hearing is adjourned. I ask unanimous consent that all members have five legislative days to revise and extend their remarks and include extraneous material without objection, so ordered.