The Blended Retirement System:

By now, many military spouses have heard a great deal about the new Blended Retirement System, also called BRS. This system went into effect Jan. 1, 2018. It is important to know that it does not affect everyone the same way.

Even if the BRS does not apply to you directly, being informed will help you be better prepared to answer questions from other military members or spouses. So, here’s your guide!

There were three eligibility groups. The window for the opt-in eligible group is now closed.

• Legacy: Many spouses with Service members closer to retirement have only experienced the legacy system. It applied to those with 12 or more years of service as of Dec. 31, 2017 and National Guard and Reservists who had more than 4,320 retirement points as of Dec. 31, 2017. These Service members typically have to stay in for 20 years to get any type of retirement benefit.
• Opt-In Eligible BRS: These members had less than 12 years of service as of Dec. 31, 2017. While added into the Legacy system, they could opt into the BRS. Additionally, National Guard and Reservists who had fewer than 4,320 retirement points as of Dec. 31, 2017, and were in paid status, had the choice of opting into the BRS, too. Note that the opt-in period closed Dec. 31, 2018. Eligible Service members made the decision to stay in the Legacy system or opt into the BRS based on many different factors, such as years of service and career plans.
• Automatic BRS: All Service members who joined on or after Jan. 1, 2018 are automatically enrolled in the BRS.

A High-Level Look at Four Elements of the BRS

TSP Contributions

Under the Legacy system, only the Service member can make contributions to his or her Thrift Savings Plan account.

However, under the BRS, participants receive an automatic TSP contribution of 1% from their branch of service. This automatic 1% contribution began immediately for those who opted into the BRS. For those entering service after Jan. 1, 2018, the waiting period is 60 days before the automatic 1% service contribution starts. If your Service member opted into the BRS and makes TSP contributions, their branch of service will match up to an additional 4% of their basic pay. If your Service member entered on or after Jan. 1, 2018, the service matching contributions would begin after completing two years of service.

This means if a Service member puts in 5% of their basic pay, they receive a 4% match. Combine that with the 1% automatic contribution and they get 5% added in by the service when the member contributes 5%.

The benefit of the automatic and matching TSP contributions is that Service members can take those resources with them when they separate from service (assuming they’ve served a minimum of two years). This allows individuals to still receive some retirement money from the service even if they don’t stay in the military for a full 20 years.

BRS Pension

In general, if a Service member completes 20 years of active military service, they are eligible for a pension under the BRS plan, similar to the pension under the Legacy plan. However, the BRS pension is 20% smaller.

For example, the pension benefit would be 40% of retired base pay under BRS as opposed to 50% under the Legacy system for someone who retires after 20 years.

For more detailed information, visit DoD Blended Retirement System.

Continuation Pay

Specific only to the BRS plan, this is a lump sum payment made between 8 and 12 years of service in exchange for agreeing to serve no less than three additional years.

The exact timing, amount and other details of these payments will be set by each branch of service as deemed appropriate.

Lump Sum Retirement

Under the BRS, Service members also have the option to select a lump sum payout option at retirement in exchange for reducing their monthly pension by 25% or 50%. The Service member would receive the reduced pension amount until age 67, then the pension is restored to the full amount.

Again, for more information, visit DoD Blended Retirement System.

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