1. Blended Retirement System Information Brief
CG-13| CAPT Mike Spolidoro
MEC Tim Hoagland
November 2017

2. Agenda BRS Benefits BRS Summary Who is affected? Continuation Pay
Lump Sum Option
BRS Comparison Calculator
Opt-in and Continuation Pay Processes
BRS Myths
Resources

3. Decision to opt-in is the member’s only – CG has no preference
BRS Benefits
Decision to opt-in is the member’s only – CG has no preference
Greater portability of retirement benefits
Earlier savings for retirement
No longer ALL or NOTHING retirement plan
Covers more people
Recruiting incentive
Continuation Pay adds incentive to stay for full career
Lump Sum option gives choices at retirement
Encourages saving for retirement

4. 2.0% x x = Defined Benefit Years of Service Monthly Retired Pay
For non-regular retirement, at age 60 or earlier with creditable active service
Basic qualifications for retirement do not change
The pension is still the primary component of military retirement
Years of Service
High-36 Month Average of Base Pay
2.0% x x =
Monthly Retired Pay
Defined Contribution
Individual Contribution
Agency Automatic Contribution
Agency Matching Contribution
Total TSP Monthly Contribution 0% 1% 3% 2% 5% 7% 4%
3.5%
8.5%
10%
AFTER 60 DAYS
AFTER 2 YEARS
NOTE: Currently serving members who opt-in will see matching contributions immediately
Continuation Pay
Lump Sum
Mid-career incentive designed to maintain force retention
Payable after 12 years of service
Minimum is 2.5 x monthly basic pay (0.5 x for RC)
May elect lump sum of 25% or 50% at retirement
Discounted present value from retirement to age 67
At age 67, reverts back to full annuity

5. Who is Affected? If serving as of December 31, 2017:
GRANDFATHERED in current retirement system
NO ONE will be automatically moved to BRS
Many currently-serving members eligible to opt into BRS
Active: Fewer than 12 years of total service as of Dec. 31, 2017
Reserve: Fewer than 4,320 retirement points as of Dec. 31, 2017
Eligible members have all of CY 2018 to make their decision
Member wants to stay covered under current system – do nothing
Member decides BRS is better – can opt in
New accessions on or after January 1, 2018 covered by BRS
Opt-in using Direct Access self-service page

6. If member has a Date of Initial Entry into Military Service (DIEMS) on or before December 31, 2017:
GRANDFATHERED in current retirement system
NO ONE will be automatically moved to BRS … but many members will have a choice to make...
The legacy “high-3” retirement system is your retirement system
Active: 12 years of service or more on Dec. 31, 2017
Reserve: 4,320 retirement points or more on Dec. 31, 2017
Many members eligible to opt into BRS or stay in legacy “high-3”
Active: Fewer than 12 years of total service as of Dec. 31, 2017
Reserve: Fewer than 4,320 retirement points as of Dec. 31, 2017, and in a paid status
Academy/ROTC/DEP: Entered a service academy or signed service agreement as of Dec. 31, 2017
New accessions on or after January 1, 2018 covered by BRS

7. Continuation Pay Eligibility/Obligation: Continuation Pay Key Aspects
Payable between 8 and 12 years of service,
in exchange for not less than 3 years
Receive notification from PPC via
approximately 180 days in advance
Amount:
Active-duty (including RPAs)
2.5 to 13 times the service member’s monthly basic pay
Reserve
0.5 to 6 times the service member’s basic pay as if on active-duty
Determining Pay Rate:
Each service will publish their own CP rates
CG has published (2.5x at year 12) for calendar 2018.
Investing/Taxes
CP is in addition to any other Service bonuses or incentives
You can receive CP payment in four equal installments over four years
CP can be invested in the TSP. CAUTION: Annual IRS elective deferral limit
Continuation Pay Key Aspects
Mid-career bonus
Payable at 8, but not more than 12 years of service
AC*: 2.5x to 13x monthly basic pay (RC: 0.5x to 6x)
* Active Guard Reserve (AGR)/Full Time Support (FTS) receive AC continuation pay rates

8. Lump Sum Calculating the Lump Sum Choices at Retirement
Calculated from the date of retirement (or receipt of retired pay Reserve service members) until full Social Security Retirement age.
Choices at Retirement
25% or 50% of the discounted present
value of future retirement payments
Lump Sum Timeline
Make request to Service no later than 90-days prior to retirement (or receipt of retired pay for Reserve service members)
Paid out no later than 60 days after retirement
Discount Rate
Determined annually and announced in June each year for the following year.
Calendar Year 2018 rate: 6.99%
Installments/Tax Implications
You can receive the lump sum payment in four equal installments over four years.
Lump Sum Key Aspects
May elect lump sum of 25% or 50% at retirement
Discounted present value from retirement to age 67
At age 67, reverts back to full annuity
6.99%
2018 Discount
Rate is:

9. $ Lump Sum Option $ 50% of future retired pay to age 67 Enlistment
NO LUMP SUM $
Enlistment
Retirement
Age 67
discounted present value
Reverts to Full Pension
50% Lump Sum $
Reduced Pension
LUMP SUM
Enlistment
Retirement
Age 67

10. BRS Comparison Calculator
275,000+ users since June release
Can be used by active/reserve
Allows opt-in eligible members opportunity to compare their potential benefits under both systems
Member can adjust 12 different fields to tailor output
Allows active members to project benefits of reserve service if they are considering switching in the future

11. Comparison Calculator Examples
New E-2 who contributes 5% to TSP and serves 4 years
Current E-5 with 12 years who only contributes 3% to TSP

12. BRS Opt-in Process
Mbr answers “yes” to 3 questions in DA self service page.
If ineligible, mbr receives from PPC.
Once enrolled, mbr receives from PPC.
TSP account established; receive materials via mail.
Federal Retirement Thrift Investment Board
PPC receives request to opt-in via DA.
PPC validates eligibility & enrolls mbr in BRS.
PPC Auditor verifies BRS enrollment.
Government TSP contributions start the pay period after enrollment.

13. DA Self-Service Opt-in Page

14. Continuation Pay Process
CP Eligibility Report
Direct Access
2018 CP 12 YOS: Active duty officers and enlisted: 2.5x│4 years
Reserve officers and enlisted: 0.5x│4 years
PPC sends partially completed CP Election Form to mbr approximately 180 days from reaching 12 YOS.
Follow up s 30 and 60 days from 12 YOS if not in receipt of election form.
PPC receives signed CP Election. If elected, sends transaction for payment.
Payment made when mbr reaches 12 YOS. Form retained in PDR.
Mbr receives form via . Considers agreement for continued service.
Receives CP in lump sum or installments. Payment based on “over 12” pay cell.
Completes form. Returns witnessed election to PPC.

15. BRS Myths
The Blended Retirement System does not offer a pension (annuity).
Members will have to opt out of the Blended Retirement System.
Opt-in eligible members will always receive continuation pay if they elect to enroll in the Blended Retirement System.
Once enrolled in the Blended Retirement System, a member will immediately receive TSP automatic and matching contributions in their next paycheck.
The Coast Guard created the Blended Retirement System to save money.
The Blended Retirement System starts in 2019.

16. Resources BRS Resource Website TSP Coast Guard Website
Most comprehensive, single resource on blended retirement
Posters, infographics, fact sheets, FAQs, policy, Service websites, videos, etc.
TSP
TSP portal, education videos, forms, fact sheets and pamphlets
Coast Guard Website
ALCOASTs, Flag Voice, All hands Blogs
Videos, infographics, articles

18. Back Up Slides

19. Length Of Service Curve

20. 92% 82% Officers 51% 47% 42% Enlisted 17% 13% 88% 59% 56% 35% 31% 100%
After Completion of YOS
Percent Retained
100%
90%
80%
70%
60%
50%
40%
30%
20%
10% 0%
13%
59%
31%
51%
17%
35%
82%
47%
Officers
Enlisted
92%
42%
88%
56%

21. Continuation Pay Continuum
CP below Optimal = ↓ LOS
↑ LOS
CP above Optimal = ↑ LOS
Optimized - Enlisted
(2.5x)
Optimized - Officer
(11.34x)
2.5x Active Duty x
Base Pay Multiple:
0.5x Reserve x
Terms of Continuation Pay (CP):
CP multiple x monthly base pay
Payable between 8-12 YOS
No less than 3 yrs obligation
Optimized - Enlisted
(0.54x)
Optimized - Officer
(4.11x)
* LOS = Length of Service Curves

22. Discounted Present Value
Would you take $200,000 now or $700,000 over the next 30 years?
Option 1: Take full retired pay of $1,400,040 from age 38 to age 67
Option 2: Take lump sum of $204,721 and reduced retired pay of $700,020 from age 38 to age 67
Active Component E-4
Born: January 1995
Entered Service: February 2013 (age 18)
Retires as E-7: February 2033 (age 38)
Reaches Full Retirement Age: January 2062 (age 67)
Life Expectancy: January 2080 (age 85)
NO LUMP SUM
LUMP SUM $0 $
No Lump Sum
$204,721
Lump Sum
$1,400,040
$700,020
$1,618,278
$1,618,278
Total Retired Pay (Defined Benefit Only)
$3,018,318
Total Retired Pay (Defined Benefit Only)
$2,523,019
$700,020
Cost of the 6.99% discount
$204,721
$495,299

23. Lump Sum VA Disability Payments Survivor Benefits Plan (SBP)
If the service member expects to receive a disability rating from the Department of Veterans Affairs, depended upon their rating, disability compensation could be offset.
Members still eligible for CRDP and CRSC
Survivor Benefits Plan (SBP)
Members will still have all of the same options to protect dependents through SBP
Should member elect a lump sum:
Premiums for SBP will be deducted from the remaining monthly retired pay
Premiums and annuity will be calculated as if the member had not elected the lump sum based on what retired pay would have otherwise been

24. TSP Vesting begins vested begins vested
Opt-In Members Serving as of December 31, 2017
immediately
2 years
immediately
immediately
next pay period after opt-in
beginning of 25th month of service
next pay period after opt-in
vested upon receipt
1% Automatic
Matching
begins
vested
begins
vested
New Accessions Who Join on or after January 1, 2018
60 days
2 years
2 years
2 years
60 days after entering service
beginning of 25th month of service
beginning of 25th month of service
beginning of 25th month of service
…vested means it’s yours to keep even after you leave the service.

25. Contribution Limits + +
To maximize the advantage of government and civilian employer contributions, Guard/Reserve members will have to be aware of contribution limits
BRS allows Reserve members to save for retirement + receive government automatic and matching contributions +
1% Automatic
Up to 4% Match
But… Reserve members with civilian retirement plans need to track their own contributions (“elective deferrals”) to their 401(k), Uniformed Service TSP, and Individual Retirement Accounts (IRA)
Elective deferrals from all sources of income are subject to a combined annual limit set by the IRS +
Civilian 401(k)
$18,000 for 2017