1. SOTS OCTOBER 21-23, 2009 CONCURRENT RETIREMENT AND DISABILITY PAYMENTS (CRDP)

2. CRDP Provides for a 10 year phase out of the offset to military retired pay due to receipt of VA disability compensation. Provides for a 10 year phase out of the offset to military retired pay due to receipt of VA disability compensation. Rates increased by approximately 10% a year and totally phased out in 2014 Rates increased by approximately 10% a year and totally phased out in 2014

3. SERVICE REQUIREMENTS Must be retiree based on 20 years service and elect compensation in lieu of retired pay. Must be retiree based on 20 years service and elect compensation in lieu of retired pay. Includes guard and reservists at age 60. Includes guard and reservists at age 60. Includes CH 61 retirees with 20 years service. Includes CH 61 retirees with 20 years service.

4. DISABILITY REQUIREMENT Must have disability of 50% or more as rated by the VA. Must have disability of 50% or more as rated by the VA. No application necessary. Automatic data exchange. No application necessary. Automatic data exchange. Benefits under this program ARE taxable. Benefits under this program ARE taxable.

5. PROGRAM PHASE IN (Began 1-1-04) Initial Rates Additional Calendar Initial Rates Additional Calendar Calendar Year 04 Years 05 - 14 Calendar Year 04 Years 05 - 14 100% 750 2005 - 10% 90% 500 2006 - 28% 2011 - 98.18% 90% 500 2006 - 28% 2011 - 98.18% 80% 350 2007 - 49.60% 2012 - 99.64% 80% 350 2007 - 49.60% 2012 - 99.64% 70% 250 2008 - 69.76% 2013 - 99.96% 70% 250 2008 - 69.76% 2013 - 99.96% 60% 125 2009 - 84.88% 2014 - 100% 60% 125 2009 - 84.88% 2014 - 100% 50% 100 2010 - 93.95% 50% 100 2010 - 93.95%

6. HOW DOES IT WORK? Example: Example: Vet 50%, No dependents Vet 50%, No dependents Initial Calendar YR 04 Amount $770 Initial Calendar YR 04 Amount $770 - 100 - 100 $670 $670

7. Example Cont. Calendar Year 09 $670 Calendar Year 09 $670 x 84.88% x 84.88% $568.70 $568.70 Plus $100 Plus $100 $668.70 $668.70

8. Example Cont. VA Compensation $770 VA Compensation $770 Minus CRDP Amount $668.70 Minus CRDP Amount $668.70 Amount of retired pay $101.30 Amount of retired pay $101.30 withheld withheld

9. CRDP AND I/U Effective 10-01-08 individuals receiving 100% based on unemployability will receive full CRDP. Effective 10-01-08 individuals receiving 100% based on unemployability will receive full CRDP. Benefits not payable until after 10-01-09 Benefits not payable until after 10-01-09 Retro will be paid to 01-01-05 Retro will be paid to 01-01-05 Payment due from DFAS not VA Payment due from DFAS not VA DFAS toll free # - 1-800-321-1080. DFAS toll free # - 1-800-321-1080.