Is the New Blended Retirement Fair?

"...When the first wave of active-duty personnel who opt into the new Blended Retirement System (BRS) next year start to retire a decade later, they will face a decision on retired pay so unusual that the Department of Defense Board of Actuaries has called it inappropriate and asked Congress to rescind the choice.

The decision they will face might be explained like this:

Congratulations on your pending retirement. Do you want your full immediate annuity? Or do you prefer to get part of its value in a discounted lump sum at retirement, in return for forfeiting either one half or one quarter of your retired pay until age 67, when you would see full annuities restored?

Lump-sum buyouts of pension obligations are common in the corporate world but not the formula Congress has prescribed for setting military lump sums. The amounts offered will be too large to ignore for many retirees seeking to get out of debt, buy a home or start a business. But the lump-sum choice also will have members lowering the lifetime value of their own retirement packages significantly...."

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