Page 2 - Ft. Irwin High Desert Warrior 6-3-16

High Desert Warrior
2 June 3, 2016
DoD Retirement
DOD ramps up training on
blended retirement system
by Karen Parrish
DOD News
e Defense Department’s new retirement
system will a ect some 2.2 million people who all
need to get smart on what it will mean.
Two subject-matter experts from the depart-
mentís personnel and readiness branch described
the issues involved to DOD News: Army Sgt.
Maj. Luther omas Jr., senior enlisted advisor
to the Defense Department’s Manpower and
Reserve A airs Division, and Wayne Boswell,
DOD’s director of nancial readiness.
Thomas described the four-phase overall
training program planned for the Blended Retire-
ment System, or BRS, as “a very comprehensive
nancial education strategy.”
e leader training module will be available
starting today, June 1, on the Joint Knowledge
Online portal and the MilitaryOneSource
website, and on DVD at deployed, shipboard
and other remote locations. omas, who has
reviewed the module, said he’s impressed with
the tools available in the training.
I’m going to have service members whose
situations are all di erent. I can go up online to
JKO, click launch the class, “and then look in the
glossary and get the speci c information I need
to be able to talk to my service member one on
one,” he said.
omas said that while leaders are required
to take the rst round of training, it’s also avail- believe under this new system, about 85 percent of
able to those who aren’t yet in leadership roles.
Boswell noted that the online availability also
will help family members learn about the new
retirement system.
“We know a lot of these decisions will be
made around the dinner table, with families
input in terms of the impact of lifelong nancial
decisions,” he said.
e training is designed to inform leaders
about BRS “to be able to translate this for their
members,” Boswell said.
Modules, milestones
e learning strategy for BRS includes four
separate modules:
* Leader training starts June 1;
* Training for installation and command
nancial counselors rolls out in the fall;
* Opt-in training for current service members
begins in January 2017; and
* Service members who join after January
2018 will receive training during their first
months of service.
Everyone serving as of Dec. 31, 2017, will
be grandfathered under the current retirement
system. Service members who have served fewer
than 12 years on active duty or accrued fewer than
4,320retirementpointsinthereservecomponent will match the members contributions up to an With BRS, those leaving service will have
will have the option of remaining covered under additional4percent.Intotal,memberscangetup skills, education and nancial resources,
their current retirement system or enrolling in to a 5 percent government contribution on top he said.
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BRS. ose with greater than 12 years on active
duty or more than 4,320 retirement points in the
reserve component will stay under their current
system.
Both men emphasized that while training
will happen at all levels, the decision on whether
to opt in belongs to the individual. Leaders will
be informers of -- not advocates for -- the new
system, they said.
Service members who join on or after Jan.
1, 2018, will automatically be enrolled in BRS.
Members eligible to opt in to BRS will have until
Dec. 31, 2018, to decide if they want to switch
to the new plan.
More bene t for more troops
“Under the current system only about 19
percent of service members actually leave with
some type of retirement bene t, and 81 percent
of service members don’t,” omas said. “We
those who serve, if they serve two years or longer,
will be able to leave with some type of portable
retirement bene t that they can take with them
to a future employer.”
e “blending” in BRS comes from the com-
binationofthe riftSavingsPlanandanannuity
provision for those who retire after 20 or more
years. BRS will use the annuity formula currently
in place: the average of the service members high-
est 36 months of basic pay times 2.5 percent of
his or her years of service -- but the 2.5 percent is
adjusted downward by half of a percentage point,
from 2.5 to 2 percent.
e rift Savings Plan is currently o ered to
service members without government contribu-
tions, but under BRS several changes take place.
After their rst 60 days in the service, all members
will be enrolled in TSP and receive an automatic
government contribution of 1 percent of basic pay
into their account each month. Additionally, the
Service member will be automatically enrolled
with a 3 percent contribution from their own
pay. After two years of service, the government
of what they contribute each month.
BRS also includes a mid-career continuation
pay at about 12 years of service, as a further incen-
tive to continue serving toward the traditional 20
years to qualify for monthly military retired pay.
Congress enacted BRS following upon
the recommendations of the congressionally-
mandated Military Compensation and Retire-
ment Modernization Commission, Boswell
said, adding that the commission heard from ìa
vast swathî of stakeholders and subject-matter
experts who ìare very interested in the military
and are connected to the militaryî when making
this recommendation.
Taking part of my pay?
So while those in BRS may see part of their
paydeductedforTSPcontribution, omassaid,
“what’s happening is they’re going to have to help
contribute to their retirement, just like in the civil- to race, color, religion, sex, national orientation, age,
ian world. It’s still the service member’s money.
e new system o ers the potential for a
greater retirement income than the current system
forìdisciplinedsavers,î omasnoted,addingthat
with DoD’s 1 percent contribution plus matching
contributions, members who contribute from
their own pay, even in amounts as small as the
cost of a pizza or movie each week, could end
their careers with potentially sizable savings for
retirement.Andthosewhodon’t retirewon’t walk
away with empty pockets.
“When they go into a new job in the private
sector or public sector at [age] 24, 25, 26, they
don’t start with zero,” omas said. “ ey start
with the retirement savings they accumulated
[starting] 60 days after they joined the military.”
Boswell said the new system will add to the
bene ts of military service.
“I think lifelong success comes from self-
investment and self-preparation,” he said. “I
think service members who leave after four years
leave with a lot: they leave with skills, experience,
[and] education. ey’ve had their mettle tested
to some degree.”
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