Frequently Asked Questions About the Blended Retirement System
October 4, 2024
Q: Why did the military retirement system change?
A: Under the legacy system, only those who serve 20 years receive a retirement benefit. That means about 81% of service members leave with no benefit. Under the Blended Retirement System, about 85% of service members will receive a retirement benefit, even if they don’t qualify for full retirement.
Q: How did the military retirement system change?
A: Service members who joined the service before 2006 will remain in the legacy retirement system, but those who joined after 2006 but before Jan. 1, 2018, had the choice to stay with the legacy system or opt into the BRS. Those who joined on or after Jan. 1, 2018, are automatically enrolled into the BRS. To learn more about the BRS, take the training at Joint Knowledge Online
Q: What do I need to know about the BRS?
A: The BRS has three parts: a Thrift Savings Plan, which is like a civilian 401(k) retirement savings plan, a “continuation pay” bonus after 12 years of service if you choose to reenlist, and an annuity payment.
Q: How does the TSP figure into the system?
A: Blended retirement enrolls all service members who joined beginning January 2018 into the TSP, with automatic and matching Department of Defense contributions. After completion of two years of service, you are “vested,” having full ownership, and that money belongs to you. If you leave, it goes with you.
Q: I'm in the BRS. Will the DOD match my contributions?
A: All service members who joined beginning in January 2018 are enrolled into the TSP. Upon 60 days of you entering service, the government contributes 1% of your base pay to your TSP. You can contribute another 4% of your base pay to get a 5% total contribution.
After completion of two years of service, you become vested, so if you leave the military, your entire TSP account goes with you. While the TSP is also available for service members not enrolled in the BRS, the department does not contribute to those plans.
Q: What is the second part of the system — continuation pay?
A: Between seven and 12 years of service, you receive a cash payment if you opt to stay in for a minimum of three more years. The payment will be a minimum of two-and-a-half months of basic pay for the active component member and half a month’s basic pay for the reserve component member. When the payment is offered, the payment’s amount and the number of years you must agree to serve will vary by service.
Q: What about the third part — the annuity?
A: The third part of the BRS is a monthly annuity, similar to the 20-year retirement system now in place. Members who retire will still get their monthly annuity pay but at a reduced amount. The annuity’s formula is 2% times years served times the “high 3,” or the average of the highest 36 months of basic pay received. The BRS annuity is close to the legacy retirement formula, which uses 2.5% as the multiplier. Find out more about the calculations behind the annuity-based payment.
Q: If I'm in the blended system and retire after 20 years, will I still get an annuity?
A: Yes, for those who retire after at least 20 years of service, the retirement remains predominantly a defined benefit in which you will get monthly retired pay. Instead of being calculated at 2.5% times the average of your highest 36 months of basic pay, (or your last month of basic pay, if you are under the older, final-pay system), your monthly retired pay will be calculated with a 2% multiplier.
Q: Where can I learn more about the BRS?
A: The DOD BRS website contains a number of resources for learning more about the BRS. DOD has also provided various retirement calculators to inform members of their benefits under the legacy and BRS systems.
Q: How do changes in the retirement system benefit the DOD?
A: Many more service members will start earlier saving for long-term retirement. From a readiness point of view, the department now has a 401(k)-like component to the retirement system, which increases the appeal to potential recruits.