Welcome back to Military Monday and everybody’s favorite topic, the Blended Retirement System. Today I’m bringing you some information straight from the Office of the Secretary of Defense.
A few weeks ago, I asked a forum whether they had any unanswered questions about the Blended Retirement System. Some of them were easy to answer, so I did that on the spot. If you have any questions, a great first place to start is the Frequently Asked Questions section of the Blended Retirement System website. Or for all of the official resources, including the non-CAC required training courses (so you can take it at home with your spouse), visit the main DOD BRS page.
However, some questions aren’t so easily answered. For those, I went to Major Mike Odle. Major Odle is the Assistant Director, Military Compensation Policy for Blended Retirement System and Strategic Communications in OSD at the Pentagon. He was able to answer some of the more unusual questions for me to pass along to you. Below you will find those questions, as well as the answer straight from the expert.
Now let’s get into those questions! Note: the green text is what I considered the key element of the answer, but you should still read everything to make sure you understand.
Transferring To The Guard Or Reserves
1. If you opt-in to Blended Retirement System as an Active Duty member, then transfer to the Guard or Reserves after 2018, does that affect your BRS choice at all? What if you stay in the legacy system as an Active Duty member, then transfer to the Guard or Reserves after 2018?
Answer: Opting into the BRS and then transferring to the Reserve Component (National Guard/Reserve) does not affect your opt-in decision or choice. Eligibility is based on your years of service (for active duty) as of Dec. 31, 2017. Additionally, if you remain in the legacy retirement system and separate service or transfer to the Reserve Component, you will remain in the legacy retirement system. ONLY new accessions (non-prior service) to the Uniformed Services on or after Jan. 1, 2018, will automatically fall under BRS.
Career Intermission Program
2. If you participate in the Career Intermission Program, you are technically separated from the service and join the IRR. Does this mean that all future CIP participants will be automatically enrolled into Blended Retirement System when their CIP period ends and they reenter the military? Does the answer change depending on whether they return to service in or after 2018?
Answer: ONLY new accessions (non-prior service) to the Uniformed Services on or after Jan. 1, 2018, will automatically fall under BRS. Separating from service and then later re-affiliating in any component is not considered a new accession.
A member who separates from service or enters the CIP prior to Jan. 1, 2018, and who is otherwise eligible for the BRS, will have either the remainder of 2018 to make a BRS opt-in election (if rejoining the service during 2018) or at least 30 days if that member re-enters service on or after Dec. 1, 2018. If the member does not re-enter service until after 2018, he or she will have 30 days to make a BRS opt-in decision.
Buying Back Military Time
3. Does enrolling in the Blended Retirement System have any impact on the ability to buyback military time when moving to a civil service job?
Answer: Opting into BRS does not impact the ability to buyback military time when moving to a civil service job.
Qualifying Years In The Reserves
4. If you are a Reservist and you do not complete a “qualifying year” (earn at least 50 points toward a non-regular retirement) does it affect the government matching in the TSP?
Answer: A Reservist receives Service Automatic (1%) Contributions and Service Matching Contributions based on their basic pay (or drill pay). The more they make in basic pay (or drill pay), the more they can receive in Service Automatic (1%) Contributions and Service Matching Contributions. Not obtaining a qualifying year will not affect government matching per se, but the service member will lose out on the potential for Service Automatic (1%) Contributions and Service Matching Contributions of their basic pay (or drill pay) they would have otherwise been eligible to receive, if they do not perform the duty.
Current Military Academy Cadets
5. Are military academy cadets who are already in school eligible for either program, or will they be automatically enrolled in Blended Retirement System because they commission after the transition? Class of 2018 (current seniors)? Class of 2021 (current freshman)? What about prior enlisted cadets? What about prep school cadets?
Answer: Cadets and midshipmen attending a service academy as of December 31, 2017, will be grandfathered under the legacy retirement system and will have the option to opt into BRS upon commissioning. ROTC cadets and midshipmen have the same option as long as they have signed their “contract” as of December 31, 2017. Cadets and midshipmen that are grandfathered under the legacy retirement system, upon commissioning (or being placed in a pay status) after 2018, will have 30 days to decide to remain in the legacy retirement system or opt into BRS. Each individual service member has a deadline, which is 30 days after their first day of duty following commissioning.
BRS is the new retirement system of the Uniformed Services starting Jan. 1, 2018. Therefore, cadets and midshipmen who enter a service academy or ROTC cadets and midshipmen who sign their “contract” on or after January 1, 2018, will automatically be covered by BRS upon commissioning.
Students at preparatory schools fall into two categories. Those Service members that enter from enlisted ranks (either active duty or with at least 30 days of prior Reserve service) and who otherwise meet eligibility criteria, will be able to opt into BRS while at the prep school. Those that enter a prep school from “civilian life” are paid similarly to cadets/midshipmen at the Service Academies and therefore fall under the same rules as Service Academies above and will be grandfathered into the legacy retirement system with the option to opt into BRS upon commissioning.
Thrift Savings Plan Matching Contributions
6. If someone switching to Blended Retirement System is otherwise already qualified to receive TSP matching, how soon do they have to switch in January 2018 to receive matching contribution for January?
Answer: The earliest a service member can opt into BRS is on January 1, 2018. Service members will receive automatic and matching contributions the first pay period after opt-in. For example, if a service member opts into BRS on January 3, 2018, they would see their first automatic and matching contributions on February 1, 2018. This would be the first pay period after opting into BRS. One thing to note! After you opt into BRS you will need to go back to the main pay page and select the percentage you want to contribute to your TSP account and if you want to contribute to TSP Traditional (pre-tax) or TSP Roth (after-tax). Make sure you do this, otherwise you will only get the Service Automatic (1%) contribution.
7. The Continuation Pay can be offered by the Services between the 8 and 12 year points. For instance, in 2018 all military services chose to offer the Continuation Pay to people at their 12 year point. How will the Services ensure nobody gets skipped if the year is changed? For instance, if someone is at their 10 year point now, they aren’t eligible to get the Continuation Pay in 2018. If their Service then offered the Pay to people at their 10 year point in 2019, the member would be at 11 years and it would be too late. How can they ensure they aren’t skipped?
Answer: It’s important to point out that continuation pay is not a part of a Service member’s retirement package, but is a retention tool under BRS to ensure the Services are able to maintain the right mix of people and skills throughout a military career. Continuation pay is very similar to existing bonus and incentive programs; the rates and the timing of retention incentives change year to year to maintain the force profile of the military Services.
8. There is a rumor that the Blended Retirement System Continuation Pay will be used in lieu of other pays and bonuses, such as the aviation retention pay. Can you comment on that?
Answer: Continuation pay is another tool the Services can use to maintain the force profiles and readiness they deem appropriate. Continuation pay can be received in conjunction with other bonus at the service’s discretion and if not otherwise prohibited by law.
Determining Date For Blended Retirement System Eligibility
9. Education delay: if someone is in IRR status during an education delay, that time is counted towards time in grade but not time in service. This can create a mismatch between, for instance, their pay date and TAFCSD. Is the cut off for their eligibility to switch to BRS determined by their pay date in this situation, or by the date when they actually entered service?
Answer: The requirement that an active component service member have fewer than 12 years of service to opt into BRS is based on a service member’s Pay Entry Base Date (PEBD) date. Time in the IRR usually counts toward a Service member’s accrued longevity.
Many thanks to Maj Odle for helping us out today! If you have any follow-up questions, you can let me know in the comments or send me an email at firstname.lastname@example.org.
One final thing: the blogger behind Military Money Manual posted some screenshots of what it will look like when you try to opt into the Blended Retirement System via MyPay. You can find that here. If you will be using Marine OnLine or Direct Access – sorry, I don’t have knowledge about how that will work quite yet.
This is my last planned BRS post until 2018, but if you have any questions you can email me at the address above, tweet me on Twitter, or reach me via the Military Dollar Facebook page. If I can’t answer your questions, maybe Maj Odle can help us out again.