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18 Months to Go: Blended Retirement System Update


The Department of Defense and the Uniformed Services are currently developing the policies and procedures needed to implement the military’s new Blended Retirement System (BRS) on Jan. 1, 2018. That may seem like a long way off, but there are many details to plan, new systems to create, and members and their families to educate.
 
Because the BRS includes a 401K-type benefit, DOD is developing a new online retirement calculator as well as creating a capability on myPay for members to opt-into the new system. Another provision that complicates implementation planning is the lump sum payment members may receive when they retire. Electing the lump sum option will reduce the member’s monthly pay check until reaching age 67.
 
Calculating this lump sum depends on the DOD establishing a personal discount rate. The lump sum also complicates calculations for Survivor Benefit Plan premiums that are paid from the member’s monthly retired pay as well as the appropriate interaction with VA disability compensation. DOD is working on these policies.
 
Quality financial education is key to making an informed decision, especially for Service members eligible to opt into the BRS. To ensure the force is educated on the new system, DOD is developing four online training courses: a leader overview course (fielded on June 1, 2016); a course to equip the Personal Financial Managers (PFMs) and Retirement Service Officers (RSOs) at installations globally that will be advising commanders, Service members and their families (fielded by Fall 2016); a course for Service members who will be eligible to opt in (fielded by Jan. 1, 2017); and a fourth course for new accessions who enter the force on or after Jan. 1, 2018, who will be under the new BRS (fielded by Jan. 1, 2018).
 
The courses that target those eligible to opt in and new recruits will include financial calculators, so Service members can compare their options and understand the need to make contributions to the Thrift Savings Plan under the new system. These education courses will also take into account unique aspects for both the active and reserve components.
 
To inform Service members about the BRS and the choices that lie ahead, DOD is developing an extensive strategic communications plan that started in earnest with a roundtable discussion involving media outlets at the end of May. BRS news will increase as the Jan. 1, 2018 implementation date approaches – stay tuned.
 
For a basic BRS explanation visit http://www.defense.gov/Video?videoid=449935
 
For information papers and continuing BRS developments, visit http://militarypay.defense.gov/
 
By Mark E. Overberg, Deputy Chief, Army Retirement Services