"...Army Reserve and Guard members who chose the new Blended Retirement System and who will be eligible for continuation pay this year will see thousands of dollars more cash.
The Army has increased the continuation pay formula by eight times its previous rate for its Guard and Reserve members. The change doesn’t apply to Army active duty members, nor does it apply to any of the other branches of service...
About 1,500 members of the Army Reserve and 983 members of the Army National Guard will be eligible for continuation pay this year, under the Blended Retirement System, or BRS..."
Showing posts with label blended retirement system. Show all posts
Showing posts with label blended retirement system. Show all posts
May 12, 2019
Some Service Members Will See Thousands More in Cash This Year under BRS
Jan 18, 2019
Final Blended Retirement Opt-In Rates Yield Surprises
"...The Defense Department has released final numbers on military folks, by branch of service, who switched into the new Blended Retirement System (BRS) during a year-long opt-in period that ran through Dec. 31.
The lower-than-expected results defied forecasting tools relied on by the department, and earlier by the Military Compensation and Retirement Modernization Commission, to project budget savings from the new plan.
Also, opt-in rate comparisons across service branches show the singular effectiveness of the Marine Corps' approach to deepening member interest in the BRS, given that it relies more on youth and vigor, and therefore has fewer careerists.
A total of 84,324 active-duty Marines, 59.4 percent of its eligible population, opted into the BRS. That was double the rate of nearly every other service. ..."
Jan 9, 2019
1 in 3 Active Duty Troops Signed Up For New Blended Retirement System
"...Less than one in four eligible service members opted in to the new Blended Retirement System, according to preliminary numbers from the Defense Department.
The percentage is higher in the active component — one in three, or 33.1 percent. About 12 percent of reserve component members opted in to the system by the deadline, Dec. 31.
As defense and service officials made a final push to inform service members about their options and the resources available, the number of opt-ins increased by 13 percent in the last two weeks of December, when 45,178 people signed up for the Blended Retirement System...."
Jul 17, 2018
23% of Enlisted Retirees Expected to Cash Out
"...The DoD has released a report that projects that 5.2 percent of retiring officers and 22.8 percent of retiring enlisted will be enticed into taking the lump sum of cash in exchange for deep cuts in their future retired pay.
This controversial feature of the new Blended Retirement System (BRS) gives retirees the option to forfeit 25 or 50 percent of their earned retired pay until age 67 in exchange for a six-figure lump sum buy-out.
Read more about this study and the impact it could have on future retiree's long term retirement benefits...."
Sep 18, 2017
Key Changes for TSP in Blended Retirement System
"...The Federal Retirement Thrift Investment Board (FRTIB), the agency that oversees the Thrift Savings Plan, has issued proposed regulations for the rollout of the Blended Retirement System (BRS)...
The proposed rules published by the FRTRIB outline four major changes made to the TSP portion of a military service member’s retirement package by BRS and how they will be implemented. Those are:..."
Sep 15, 2017
An Overview of the New Blended Retirement System
"...After nearly two years of planning, significant changes are coming soon to the military retirement system.
The Federal Retirement Thrift Investment Board (FRTIB), the agency that administers the TSP, has been preparing and working with individual military services to prepare and train eligible service members on their options.
But the FRTIB’s Sept. 11 proposed rule offered more specific details about how the agency will implement the new blended retirement system (BRS) — and exactly who is eligible and when they’ll receive their first contributions.
Generally, the new plan moves military members from a retirement system that mostly relied on a vested defined benefit plan to one that includes a reduced defined benefit plan with greater TSP benefits, continuation pay and some lump-sum options.
“Blended retirement” incorporates four major changes to the current retirement system for uniformed military...."
May 11, 2017
What Military Personnel Need to Know About the New Retirement Plan
"...The military’s introduction of its new Blended Retirement System leaves nearly all current service members in a quandary. Those with between one and 12 years of service must choose between the old and new retirement plans—and there is nothing easy about the calculation.
Why one to 12 years? Because on Jan. 1, 2018, all military personnel whose length of service is in that time bubble are eligible for either the old or the new programs. Both have pros and cons. Service members will have one year to make an irrevocable choice. About 88% of active-duty military—or 1.15 million service members—fall into this category...
The military just rolled out a calculator that service members can use to compare their options, which is labeled as the beta version of the Blended Retirement System Comparison Calculator. Some unofficial calculators are also available, including one from USAA, a financial services company that serves military families.
To choose wisely, those in the bubble years will need to take a hard look at their expected tenure in the military and..."
May 10, 2017
Military Retirement Comparison Calculator Released
"...The long-awaited Defense Department retirement calculator has arrived, designed to help service members choose between the existing and incoming retirement systems as they plan their long-term financial future.
The calculator, labeled a "beta version" but available to anyone at militarypay.defense.gov/Calculators/BRS/, asks for basic information such as age, years of service, rank and estimated years of service at the time of separation and retirement. It fills in the blanks for items such as expected rate of investment return, life expectancy, Thrift Savings Plan contribution percentage and career progression, but users can alter those fields, and others, to tailor their results.
After the user enters all the data, the calculator will offer a comparison between the plans...."
Apr 14, 2017
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...."
Apr 3, 2017
5 Key Points About the New Retirement System
"...Starting Jan. 1, 2018, all new entrants to the military will receive a new retirement system, known as the Blended Retirement System.
This system is a dramatic departure from the military’s current retirement system, which awards a pension of at least 50 percent of base pay to qualifying service members immediately upon retirement.
The Blended Retirement System combines the military’s defined benefit plan with what is known as a defined contribution plan, which is similar to the retirement offering found in most civilian 401K plans.
Service members who joined the service from Jan. 1, 2006 to Jan. 1, 2018 will have a choice: stay with the current defined benefit plan or opt into the new blended system.
Here are five factors to keep in mind for those of you who are facing the opt-in decision yourself or are advising subordinates on which plan to choose..."
Mar 25, 2017
How the New Blended Retirement Affects Your Survivor Benefit Plan
"...The majority of retiring service members elects a benefit that provides a payment of 55 percent of their retirement pay to qualified survivors. And as the Blended Retirement System reduces retirement pay in favor of Thrift Savings Plan matching funds, it also reduces this benefit in the event of a service member’s death...
The current system calculates retired pay by multiplying 2.5 percent of the final base pay by the number of years served, for those who serve at least 20 years. So after 20 years, retired pay would be 50 percent of base pay. Under the BRS, after 20 years, retired pay would be 40 percent of base pay, with a lesser multiplier of 2 percent — a reduction of 20 percent..."
Feb 15, 2017
Study Infers Blended Retirement Won’t Hurt Retirees or Force
"...A new study commissioned by the Marine Corps concludes that the new Blended Retirement System won’t endanger force retention under any reasonable set of economic and behavioral assumptions.
It also suggests that young career-minded service members who opt into the BRS to get government matching of their Thrift Savings Plan contributions will still have potential career retirement benefits that most civilian peers would envy.
As the Defense Department last week launched a new BRS “Opt-In Course” to educate members being offered the chance in 2018 to choose the BRS, the think tank CNA released a report on how the plan would affect Marine Corps force objectives as well as the lifetime take-home income of career personnel.
The report has a 17-word title, 10 co-authors and can be read online at: http://bit.ly/2kMQfp1..."
Feb 2, 2017
Troop Training Begins on New Blended Retirement System
"...Just one day after the launch of an online training program about the new Blended Retirement System, more than 1,000 service members had already logged in to start their courses, according to a defense official.
The training is available on Joint Knowledge Online for those with a common access card. But family members and others without a CAC can also take the course at Military OneSource.
No one can make the decision about the retirement system yet – eligible service members will be able to opt in to the new system between Jan. 1 and Dec. 31, 2018..."
Sep 8, 2016
Nearly 1M Estimated to Opt In for ‘Blended’ Retirement
"...More than 740,000 currently serving active duty members and 176,000 drilling Reserve and National Guard personnel are expected to opt in to the new Blended Retirement System when the choice becomes available in 2018 to military members with fewer than 12 years’ service.
The opt-in estimates are the product of a “dynamic retention” computer model developed by RAND Corporation and used to predict how personnel will react to a new retirement choice. The BRS was designed by the Military Compensation and Retirement Modernization Commission and approved by Congress last year after lawmakers tweaked a few features.
The number of current members who will opt to leave their “High-3” retirement plan with its higher lifetime value for the near-term rewards and flexible features of the BRS is important Department of Defense Board of Actuaries..."
Aug 12, 2016
Push to Educate Troops on New Retirement Plan
"...The U.S. Defense Department is in the midst of a push to educate troops about the military's new blended retirement system.
The Pentagon is making a "full-court press" to bring officers, enlisted personnel and their families up to speed on the new benefit, slated to take effect Jan. 1, 2018, according to Wayne Boswell, director of financial readiness in the office of the assistant secretary of defense for readiness.
The department's June rollout of the so-called blended retirement system, or BRS, course on the website Joint Knowledge Online and other informational materials on the website Military OneSource marked the "first step in making sure that we reduce the speculation and the rumors, but get the facts out there so that as a force we can move forward into this new era ..."
Jun 2, 2016
Pentagon Moves to Educate Troops on Its New Retirement Plan
"...The Defense Department has begun to educate military leaders, rank-and-file service members and their families about the coming changes to its retirement plan, a months-long effort to provide personnel with enough financial literacy to confidently, competently navigate this new "blended" system.
The first of four programs, unveiled Wednesday at the Pentagon, is called the “Leader Course.” It’s available to anyone and doesn’t require access with a Common Access Card. It provides an introduction to and an overview of the new blended retirement system, with information about who is affected, and the options available to them. A link to the information is on the Joint Knowledge Online site; it can also be found through MilitaryOneSource.mil...."
Read more at militarytimes.com
May 5, 2016
What is the Blended Retirement System?
"...In November 2015, the President signed the FY 2016 National Defense Authorization Act. Included among the thousands of items in the act was a significant change in the military retirement system.
The change, based upon recommendations from the Military Compensation and Retirement Modernization Commission, is intended to provide Service members with a portable retirement benefit whether serving four years or forty years, while providing cost savings...
The new blended retirement system retains the 20-year cliff vested annuity, but reduces the multiple from 2.5% to 2.0%.
Under the new plan, you would receive 40% of the average of your highest three years of base pay after 20 years of service. Each additional year of service in excess of 20 years provides you with an additional 2% of your high three base pay.
To offset the reduced defined benefit, the defined contribution component, TSP, becomes an integral part of the retirement plan...."
Read more at MCCS
May 3, 2016
Experts Warn New Retirement System Has Major Flaw
"...Top financial experts are worried about a key piece of the military's new blended retirement system and are urging the Pentagon not to shortchange career troops — especially enlisted service members.
Specifically, the American Academy of Actuaries is scrutinizing the new system's lump-sum payout option and precisely how the Pentagon will calculate it for those who elect to cash such a large portion of their pension.
Military retirement reform became law last year and takes effect in 2018, giving future retirees the option of taking traditional monthly pension checks or accepting smaller monthly pay along with a lump-sum cash payment at the time of separation. The lump sum would total either 50 percent or 25 percent of a service member's promised pension benefits.
It’s similar to the military's longstanding "REDUX" retirement option, which..."
Read more at Military Times
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