About 1.6 million service members will have a big decision to make in 2018: stay with the traditional military retirement system or move to the new Blended Retirement System.
Those service members include those who have less than 12 years of service on active duty as of Dec. 31, or less than 4,320 retirement points as a member of the Guard or Reserve.
The new benefits package is called the Blended Retirement System, or the BRS, because it blends elements of the traditional 20-year, all-or-nothing pension system with some new payments, designed to give at least some retirement benefits to those who don’t stay for a full 20-year career. Currently only about 19 percent of active duty troops and 14 percent of reserve component members stay long enough to earn a full retirement.
Those who are eligible to make a choice have all of 2018 to decide, but if you’re going to opt into the new system, you’re better off doing it sooner rather than later.
The blended retirement system offers new matching contributions to your individual retirement account known as Thrift Savings Plan. Those payments will start immediately at the first pay period after you opt in. And once that cash is in a TSP, it belongs to the individual service member outright, regardless of when he or she separates from the military.
But once you opt in to the new system, you can’t change your mind.
The BRS still offers a pension after 20 years of service, but it’s about 20 percent smaller than the current system. It offers some new benefits — such as a government contribution of up to 5 percent of basic pay to the service member’s Thrift Savings Plan. Under the traditional system, service members can contribute their own money to the TSP, but there is no government match.
The new system also offers a continuation pay, which is payable at 12 years of service. The services have all determined that the calculation for continuation pay will be 2.5 times the monthly basic pay for active duty; and for Guard and Reserve members that will be 0.5 times the monthly basic pay that reservists would receive if mobilized for active duty.
Service members who want to stay in the traditional system don’t have to take any action and will automatically remain grandfathered under the traditional retirement system. (Except for Marines, who must register their decision in Marine Online either way.)
For troops who want to opt into the BRS, you must complete mandatory training through Joint Knowledge Online, which requires a Common Access Card, or through Military OneSource, which doesn’t require a CAC and allows spouses to complete the training, too.
More information, including a BRS comparison calculator, is available on the DoD Blended Retirement System site.
Active-duty members with more than 12 years of service, and reservists with more than 4,320 retirement points, there is no choice to make. They will automatically stay with the current legacy system.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.