1. Blended Retirement Overview
Overview Slide, more detail on following slides…
Current Retirement
Blended Retirement Proposal
2.5% per year = 50% of base pay at 20 years (20+ = $)
TSP Available (no matching)
Roth & Regular
No automatic enrollment
Cliff vesting (20 years), 15% Enlisted & 46% of officers reach retirement
No market risk
REDUX has not been embraced (30k at 15 years) VA repay later assuming disability payments
No specific changes to non-regular retirement at this point. (Retired Pay Base X Multiplier %)
2.0% per year = 40% of base pay at 20 years (20+ = $)
Introduces Cost Sharing for Retirement (Blended…)
TSP matching (automatic 1%)
NDAA: Matching Same as FED CIVs
Matching stops at 26 years
1% after 60 days, match starts at 2+ years
Market Risk on TSP portion
Career Bonus, 12 years all Soldiers
Soldier Choice:
12 years or more – 31DEC17 Current plan
Less than 12 years - 31DEC17 Choose plan
After 1JAN18 Blended Retirement
Lump Sum Buyout option I
Program Summary

2. Blended Retirement Proposal
BRS Bottom-Line
Current Retirement
Blended Retirement Proposal
If you are staying for a career, in most cases Soldiers are better off sticking with current plan
No market risk
TSP is still suggested even if you don’t get matching
If the Soldier is not planning on making the Army a career, they may benefit by keeping some TSP matching money
Don’t recommend BRS unless Soldier intends to contribute MAX TSP. If they don’t they lose 20% from old plan I
Website:

3. Blended Retirement Proposal
Retirement Annuity
Current Retirement
Blended Retirement Proposal
Retired Pay 2.5% per year = 50% of base pay starting at 20 years (20+ = $)
The Soldier receives this money as they earn their regular pay, no contribution required
Amount of actual retirement pay is based upon rank and years of service
Funding comes from top of the system set aside (federal money), your State does not lose money from POM budgets to pay for retirement
Cliff vesting (20 years), DoD wide 15% Enlisted & 46% of officers reach retirement
Example: AD E7 with 20 years this pay equals $ 201,282
Retired pay 2.0% per year = 40% of base pay starting at 20 years (20+ = $)
The Soldier receives this money as they earn their regular pay, no contribution required
Amount of actual retirement pay is based upon rank and years of service
BRS 20% REDUCTION
Funding comes from top of the system set aside (federal money), your State does not lose money from POM budgets to pay for retirement
Cliff vesting (20 years), DoD wide 15% Enlisted & 46% of officers reach retirement?
Example: AD E7 with 20 years this pay equals $ 161,025

4. Thrift Savings Program
Current Retirement
Blended Retirement Proposal
TSP (Market Risk)
Available (No matching)
Roth TSP- The Soldier can select the ROTH option which means that their contribution is Taxed along with their regular pay, but it is not taxed when they reach retirement age (59+) and begin withdrawing funds
Traditional TSP- The Soldier can make contributions tax exempt but the funds are then taxed as they are withdrawn
No automatic enrollment
No automatic 1% Federal contribution
Soldier has to enroll in TSP
TSP (Market Risk)
1% federal contribution after 60 days) see chart
Matching of up to 5% base pay (chart)
Soldier automatically enrolled in TSP
Roth TSP- The Soldier can select the ROTH option which means that their contribution is Taxes along with their regular pay, but it is not taxed when they reach retirement age (59+) and begin withdrawing funds
Traditional TSP- The Soldier can make contributions tax exempt but the funds are then taxed as they are withdrawn
Soldier is vested upon 2 years of service, the Soldier can leave with this money, possible impact to retention?
Matching ends after 26 years of service (reverts to current rules?)

5. Blended Retirement Proposal
Career Bonus
Current Retirement
Blended Retirement Proposal
No Career Bonus:
Career Status Bonus / REDUX (30k at 15 years) has not been embraced by Soldiers.
Under REDUX if the Soldier is granted VA compensation they will have to repay the 30K
Career Bonus:
after 12 years of service, members will receive a cash payment if they sign up to a commitment of 4 more years (Commander decision)
The payment will be 2.5 months of basic pay for the AD member and .5 month’s basic pay for the RC member (AGRs are RC, SECDEF should fix with Service policy)
DoD assumes that the Soldier will reinvest the money, but sometimes Soldiers spend money they should save
Money is categorized like a bonus, so it is not subject o VA Offset
How this money is POMed TBD
May dilute impact of other bonuses, service is concurrent with other programs

6. Soldiers have a Choice (OPT IN)
Current Retirement
Blended Retirement Proposal
Soldier OPT IN:
Soldiers under current retirement plan are in the program they are in based upon the date they entered military service (High Three)
The Career Status Bonus / REDUX was a choice for Soldiers Starting on 31JUL86 (Details in Notes section)
Soldier OPT IN:
Certain Soldiers can choose:
12 years or more on 31DEC17 Current plan (4321 or more points)
Less than 12 years on 31DEC17 Choose plan (4320 or less)
After 1JAN18 Blended Retirement
DoD is basing the time of service on points for ARNG Soldiers (4320 pts), ~315K traditional Soldiers will be in a choice group because this point value represents 12 of active service time
Soldier decision will be selected online using MYPAY (Audit Standards?)
DoD wants a legally binding decision, but has not provided a legal review of their proposed process
DoD wants this to be a “one-time” decision, not revocable
Assumption: DFAS will have to get HR Data to record the decision to HR Systems?
CSB/REDUX
Members who entered the service after July 31, 1986 are given a choice of two retirement plans when they reach their 15th year of active service:
High-3 Year Average
Career Status Bonus (CSB)/REDUX
Military members who elect CSB/REDUX are eligible to receive a $30,000 bonus when they reach their 15th year of active service, but will also have their retired pay calculated at a reduced rate.
CSB/REDUX is a two-part deal. It includes the $30,000 bonus, but also results in a reduced retired pay. While the $30,000 Career Status Bonus may seem like an incentive now, it is important to be aware of the effects electing to retire under CSB/REDUX will have on your retired pay.
CSB REDUX Retired Pay Calculation
Retirement Calculator
Your monthly pay may differ from the calculator’s estimate. The formulas used to calculate retired pay are complex and differ depending on individual circumstances.
CSB/REDUX Retirement Calculator
Non-Disability retirees will have their percent multiplier reduced by:
1 percent for each full year of creditable service less than 30, and
1/12th of 1 percent for each full month of creditable service less than a full year.
This will also affect your retired pay by reducing the cost of living adjustments (COLA) by one percent.
This reduction remains in effect up to the age of 62. Once you reach age 62, your retired pay will be restored to the same amount paid under the High-3 System. Full COLA rates will be applied to your new computation, but the COLA will continue to be applied at the reduced rate each year following.
Disability Retirees and Reserve/Guard members retiring at age 60 (or younger in some cases) are exempt from all provisions of the CSB/REDUX provisions except the 1 percent COLA reduction.

7. Blended Retirement Proposal
Lump Sum
Current Retirement
Blended Retirement Proposal
No Soldier Lump Sum:
To receive retired pay, 20 plus years
Payments of annuity monthly for life
Lump Sum Available:
Soldier can elect to receive lump sum payment upon retirement
Lump Sum choice reduces retired pay between retirement date and age 67
50% or 25% of retirement annuity payable when the Soldier is eligible for retired pay (Age 60 for traditional)
SUBJECT TO FULL VA OFFSET, over 50% VA may be concurrent?
Proposed Discount Rate 7.3%
Unknown Components:
The impact on Survivor Benefit plan TBD
Nothing about rights of spouse in legislation
DFAS’s system to push data back to Services TBD

8. Blended Retirement Proposal
Soldier Training
Current Retirement
Blended Retirement Proposal
Soldier Training:
NDAA requires Financial Literacy training, this is beyond Blended Retirement 10USC992
Soldiers can access Personal Financial Counselors (OSD Contract) for financial questions
PFCs mostly support Active Duty installations. There are 140 ARNG and and 77 ANG PRCs
The PFC is a DoD asset, so we are sharing with the Navy, etc.
Concern over local leaders becoming liable if Soldier makes wrong BRS decision and regrets it
PFCs will have 4 year degree and be certified as financial counselors
If Soldier does nothing, they stay is current retirement plan
Soldier Training:
ARNG approach to link BRS and Financial Literacy Training
BRS implementation guidance will call for ATMS to track training completion by loading certificate
All OPT IN group will require JKO based BRS Training Before 1JAN18
JKO (CAC) and Army One Source (non-CAC) will both provide the training, it will be a challenge to record the training was completed
Army Directive creates added training challenge
4 DoD online Classes (JKO)
Leader’s Course (intro)
OPT IN Group (<12 years on 31DEC17)
New Soldier Group (After 1JAN18)
Counselor Course

9. Backup

11. MCRMC Assumes 100% investment by Soldier, this may not be the case
Soldier’s Money
Note Difference
GOV 1% TSP Money
TSP Concern: The OPM Federal Employee TSP Participation Patterns Report on page 26 stated that, “By the end of 2012, close to half of FERS participants deferred less than 5 percent of their salary. Those participants are not receiving the full agency matching contribution.”