Commissioned Corps Management Information Site

I am an officer in the United States Public Health Service (USPHS) Commissioned Corps. Does the Blended Retirement System pertain to me and where can I obtain more information?

Yes. The National Defense Authorization Act (NDAA) of Fiscal Year 2016 created the Uniformed Services Blended Retirement System (BRS), which includes all seven of the uniformed services of the United States. Before making any decision related to the BRS, you should complete the opt-in training and use the BRS comparison calculator. You can access the BRS Opt-In training course through the Joint Knowledge (JKO) on-line web site: http://jko.jten.mil. You must create a JKO account if you are a new JKO user. Once your account is setup, you’ll be able to take the Opt-In training course.

The link to the BRS Comparison Calculator is at http://militarypay.defense.gov/calculators/brs. The on-line Comparison Calculator will:

Allow you to compare estimated benefits under your current retirement system (high three) and BRS prior to making a decision
Walks you through key information needed to make an effective comparison
Allow you to adjust data to see how changes to your career and savings will impact retirement benefits

When does the BRS take effect? Who is affected?

The BRS takes effect on January 1, 2018. New accessions on or after January 1, 2018, will be enrolled automatically in the new BRS. All members serving as of December 31, 2017, are grandfathered under the legacy retirement system and no one currently-serving will be automatically switched to the BRS. Though they are grandfathered under the legacy retirement system, active component service members with fewer than 12 years of service as of December 31, 2017 may choose to opt into the BRS. The opt-in window for BRS is from January 1, 2018 to December 31, 2018.

If I remain in the legacy retirement "high-3" system, how does my retirement change?

If you decide to remain in the legacy retirement system, you don’t need to do anything. Nothing changes for those who choose to remain in the legacy retirement system.

If a service member is eligible for BRS, do they need to do anything?

Yes, eligible service members must complete the mandatory BRS Opt-In Course and notify their Military Pay Technician via email of their decision to opt into BRS anytime between January 1, 2018 and December 31, 2018. Service members who wish to remain under the legacy retirement system do not need to take any action. No one will be automatically moved to the BRS. Service members joining USPHS on or after January 1, 2018, will be automatically enrolled in the BRS.

Why is this new blended retirement good for service members?

Every service member’s career goals and personal situation is different. Therefore, it is critical that you complete the BRS opt-in training and use the comparison calculator to make an informed decision.

If I elect to opt into the new Blended Retirement System can I change my mind later?

No; the decision to opt-in is irrevocable. It cannot be changed at a later date.

If I opt into BRS, will my previous military service be calculated under the legacy system multiplier of 2.5 percent?

No, if you opt into BRS you move entirely into the new retirement system. For example, if you had four years under the legacy retirement system and 16 years under BRS, at retirement all 20 years are calculated under the BRS multiplier of 2.0 percent; you do not receive split multipliers.

What if I have a break in service—can I still opt into the Blended Retirement System?

If you left the military (prior to January 1, 2018) and rejoin after the opt-in decision year (calendar year 2018), upon re-entry you will have 30 days to decide whether to stay in the legacy retirement system or elect the new BRS, so long as you are either in the active component and meet the less than 12-year service criterion. However, if you re-enter military service in 2018, you will only have the remaining time in calendar year 2018 to make a decision to opt into BRS.

Will CSB/REDUX still be available to service members when BRS is implemented?

No, the Career Status Bonus (CSB)/REDUX sunsets on December 31, 2017. No CSB will be offered or paid after this date.

Does the service member’s spouse need to concur with the member’s decision to opt into BRS?

The Commissioned Corps encourages service members to make their opt-in decision in consultation with their spouse, significant other, Personal Financial Manager/counselor or other trusted agent prior to making an opt-in election. However, the law does not require spousal concurrence with the decision.

Does BRS affect my ability to participate in the Survivor Benefit Plan?

No, service members will still have the option of participating in the Survivor Benefit Plan.

How does the TSP figure into the BRS?

The BRS includes a TSP component. Service members joining on or after January 1, 2018 will be automatically enrolled into TSP contributing 3 percent of their basic pay. Agencies will also match service member contributions up to an additional 4 percent after two years of service. The maximum agency matching contribution is 5 percent if the service member is contributing 5 percent. Both the agency automatic 1 percent and the matching contributions continue through the end of the pay period during which the service member attains 26 years of service.

When will current service members start receiving automatic and matching TSP contributions if they opt-in to BRS?

Current service members opting into the new BRS between January 1, 2018 and December 31, 2018, will receive agency automatic 1 percent contribution and up to 4 percent additional agency matching beginning the first pay period after opting in – there is no 60 day/2-year waiting period for current service members. However, there is a waiting period for new accessions starting January 1, 2018.

Does the money in the TSP belong to the service member?

For current service members who opt into BRS, they are immediately vested in (entitled to) their own contributions and any government matching contributions. However, service members must have at least two years of service in order to be vested in the government’s automatic 1 percent contributions and associated earnings. This does not mean two years from the date they opted-in or started the TSP, but refers to total time in service. New accessions are immediately vested in (entitled to) their own contributions and earnings. They will begin to receive the government automatic 1 percent of their basic pay after 60 days in service and must have two years of service in order to be vested in the government’s automatic 1 percent contributions and associated earnings. At the beginning of two years of service, they can begin receiving matching contributions up to an additional 4 percent of their basic pay. Service members are immediately vested in (entitled to) any government agency matching contributions and earnings at this point. All agency automatic and matching contributions are governed by the existing Federal Retirement Thrift Investment Board regulations as it pertains to vesting.

I have a civilian 401(k) (or civil service TSP) and a military TSP account. Can I contribute to both?

Yes, however the TSP and similar civilian retirement plans (e.g.; 401(k)), share the same annual contribution limit ($18,000 for 2017) under IRS regulations. This means you cannot contribute more than the IRS elective deferral limit across both accounts in any given calendar year. Generally, this will not impact active component service members. However, many members of the National Guard and Reserve are either military technicians and have access to both a military TSP and a civil service TSP account, or are traditional members of the National Guard and Reserve who have another retirement plan through their civilian employment. As such, service members can make contributions to their TSP accounts and/or a 401(k) or similar retirement account in the same tax year, but are subject to a single IRS elective deferral limit. Service members should be careful not to exceed their annual contribution limit across their retirement accounts. If a service member’s contributions reach the IRS elective deferral limit before the last pay date of the year, they will not receive all of the matching contributions to which they would otherwise be entitled. The only time a service member can exceed the IRS elective deferral limit is when they are deployed to a combat zone or direct support area or contributing catch up contributions. It is important to note, this annual additional limit includes automatic and matching contributions to the service member’s retirement accounts from all sources. Visit TSP.gov for more on contribution limits.

Are there any special provisions on TSP contributions if I am assigned to a designated combat zone or direct support area?

If a service member is assigned to a designated combat zone or direct support area, contributions to their TSP are tax-exempt; that is, the money the service member contributes to their TSP goes in tax free. For service members contributing to a Roth TSP in a tax-exempt zone, their money would go in tax free and all earnings can be withdrawn tax free. Additionally, if you make tax-exempt contributions to the TSP while deployed in a designated combat zone or direct support area, the sum of your contributions and the government contributions to your TSP account cannot exceed the IRS annual addition limit ($54,000 for 2017), which is a much higher limit than the annual elective deferral limit. Member contributions above the annual elective deferral limit will be placed in the traditional TSP account.

How do I make changes to my TSP?

To change TSP contribution percentages or to update your address, service members Commissioned Corps Offices should contact their Military Pay Technician in the Compensation Branch at the Division of Commissioned Corps Personnel and Readiness.

Additionally, all uniformed service members can log on to TSP.gov to review account performance, print statements, make inter-fund transfers, and submit a new contribution allocation among other TSP/fund-management activities.

If a service member ops into BRS and retires after 20 years, will they still get an annuity?

Yes, for those service members who retire after at least 20 years of service, their retirement remains predominantly a defined benefit in which the service member will get monthly retired pay. Under BRS, the service member’s monthly retired pay will be calculated with a 2.0 percent multiplier, times the average of the service member’s highest 36 months of basic pay.

Is the retirement under BRS divisible in a divorce?

A service member’s pension under the BRS is similarly subject to a divorce decree as it is under the legacy retirement plan and subject to state court decisions.

What is the lump sum payment option?

The lump sum provision of BRS gives service members choices at retirement. A service member may choose to receive either 25 percent or 50 percent of the discounted present value of their future retirement payments, in exchange for reduced monthly retired pay. Monthly retired pay returns to the full amount when the service member reaches their full Social Security retirement age, usual age 67. No such lump sum option exists under the legacy military retirement system.

Does an active duty service member have to take a lump sum payout at retirement?

No, active component service members will have a choice to receive their full monthly retired pay upon retirement or to elect a lump sum payment and reduced retired pay. The lump sum payment will be calculated as either 25 percent or 50 percent of their discounted retired pay from the date of retirement until the date the member would reach full Social Security retirement age, which for most is 67 years old. At full Social Security retirement age, all service members will receive their full monthly retired pay, regardless of their lump sum payment election.

When do members of the active component need to apply/request the lump sum option?

For active component service members, the lump sum election must be made to your service no less than 90 days before retirement. The Compensation Branch, DCCPR will process your request for the lump sum, which will be paid out no later than 60 days from your date of retirement.

If a service member dies before age 67, does the surviving spouse need to repay the lump sum?

Once the lump sum is selected and distributed to the service member the money belongs to the individual--it will not be recouped in the event of death. However, the remaining annuity will end unless the service member is enrolled in the Survivor Benefit Plan. For more information about SBP visit https://www.dfas.mil/retiredmilitary/provide/sbp.html.

Can a service member roll over their lump sum distribution to the TSP, in part to minimize the tax implications?

Service members will not be able to roll over their lump sum payment into another retirement plan. Only an "eligible rollover distribution" can be moved to another retirement plan. In order for a distribution to be eligible to rollover, among other things, it must come from a "qualified trust." To keep it simple, this is basically an employer-sponsored retirement plan that meets certain requirements of the IRS tax code. The military retirement fund is not a "qualified trust" and therefore money that comes from it cannot be rolled over to another retirement plan.

If I don’t serve for 20 years am I still eligible for lump sum?

No. Lump sum refers to a portion of the monthly retired pay a service member receives upfront after serving 20 or more years. Therefore, the lump sum is only available for those that service 20 or more years and retire from the one of the uniformed services.

Does the spouse need to concur if the service member elects a lump sum?

While it’s encouraged that service members discuss the decision on whether or not to take the lump sum with their family, it is not a requirement the service member’s spouse concurs with selection of the lump sum.

Can a service member take the lump sum payout across several years to minimize tax liability?

Yes. The lump sum is considered earned income and is therefore taxable. Service members may choose to receive their lump sum payments in up to four installments over four years to reduce their tax burden.

What is continuation pay?

The National Defense Authorization Act of Fiscal Year 2016, as amended by the NDAA FY2017, includes a continuation pay provision as a way to encourage service members to continue serving in the Uniformed Services. Continuation pay is a direct cash payout, like a bonus. It is payable between the completion of eight years of service, but before completion of 12 years of service as determined by your service. Members receive continuation pay in return for a commitment of a minimum of three years of service. The Commission Corps will publish guidance related to continuation pay rates. The rates will be predicated on factors including, but not limited to, retention needs, occupational series, and critically manned career fields.

Will a service member be eligible for other bonuses, such as a reenlistment bonus, if he/she receives continuation pay?

Yes, continuation pay can be received in conjunction with other bonus at the service's discretion and if not otherwise prohibited by law.

Can you receive continuation pay more than once?

No, continuation pay is a one-time payout to a service member, regardless of whether they change service, component, or career specialty.

Can the service obligation for continuation pay and other bonuses, such as a reenlistment bonus, be served concurrently?

The service obligation, as a result of continuation pay, can be served concurrently.

Is continuation pay part of the service member’s retirement package?

Continuation pay is not part of a service member’s retirement benefit, but it is essential to maintaining the existing rates of retention of experienced Commissioned Corps Officers.

If a service member agrees to receive continuation pay in exchange for a minimum of at least three more years of service and does not complete the additional commitment, must the service member repay a pro-rated amount of the continuation pay?

Yes, continuation pay may be subject to repayment of a pro-rated amount. The decision as to whether or not to recoup payment is determined by the Commissioned Corps.

Can continuation pay be contributed to the Thrift Savings Plan (TSP)?

Yes, bonuses (such as continuation pay), as well as incentives and special pay can all be contributed to your TSP. It is important to note, each year the IRS determines the maximum amount you can contribute to tax-deferred savings plans like the TSP ($18,000 for calendar year 2017). You should keep the annual contribution limit in mind when deciding how much you will contribute to your TSP account from your continuation pay. If you reach the annual maximum too quickly, you could lose some government matching contributions, because you only receive government matching contributions on the first 5% of your basic pay that you contribute each pay period. If you reach the annual limit before the end of the year, your contributions (and consequently your government matching contributions) will stop. If you contribute some or all of your continuation pay to your TSP and go over the IRS limit, be aware it could result in you meeting the IRS limit earlier in the year, causing you to lose out on additional government matching contributions.

When will the BRS New Accession Course be released?

The BRS New Accession Course, the fourth course in the series of BRS training, will be available January 1, 2018. It will be provided to all service members who join the military on or after January 1, 2018. The focus of this course is to ensure our newest service members have a comprehensive understanding of their retirement benefits.

What is Commissioned Corps doing to educate service members?

The Division of Commissioned Corps Personnel and Readiness (DCCPR) has briefed Liaison Officers, Flag Officers and others on the new BRS. DCCPR is communicating monthly with Liaison Officers and other leaders on changes and updates to BRS. The character and substance of the changes to retirement benefit requires a focus on the education of officers to ensure informed decision making about benefit options. Joint Knowledge Online (JKO) has delivered three of the four targeted education courses for leaders, financial and retirement counselors, service members and their families who are eligible to opt-in. The BRS new accession course will be available in January 2018. All courses are accessible through JKO. In addition, the Division of Commissioned Corps Personnel and Readiness can support your BRS training with subject matter experts upon request.

Can service members take any of the BRS training courses?

Although some BRS training courses are specifically geared toward certain groups, all BRS training courses are available to all service members on JKO. Anyone who is looking for additional information is encouraged to take any of the BRS courses of interest to them.

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