Commissioned Corps BulletinAugust 29, 2016

New Blended Retirement System (BRS)

The Fiscal Year 2016 National Defense Authorization Act (NDAA) instituted a modernized retirement system for members of the uniformed services. Commonly referred to as the Blended Retirement System (BRS), the BRS will become effective on January 1, 2018. BRS consists of four components that distinctively combine to deliver a new blended annuity package categorized by the following:

Defined Retirement Pay Benefit
The BRS formula will use a 2% per year multiplier, in lieu of the 2.5% multiplier, of the highest 36 months of an eligible officer’s basic pay. This equates to 40% of basic pay at 20 years of service versus the current 50% of basic pay at 20 years of service under the current retirement system.

Thrift Saving Plan (TSP) Automatic and Matching Contributions
An officer covered under BRS will automatically receive a TSP contribution of an amount equal to 1% of basic pay after 60 days of service. Matching contributions will start at 3 years of service with a maximum matching of 4% through the completion of 26 years of service. At the start of 3 years of service, this contribution is the officer’s to keep regardless of whether a 20 year or longer retirement is achieved. This means that if an officer separates before reaching retirement, they will leave with a portable retirement benefit (TSP), which is not part of the current defined retirement plan.

Continuation Pay
This is a payment at the completion of 12 years of service available to those who agree to serve an additional four years. The minimum payment is 2.5 times an officer’s monthly basic pay.

Lump Sum Retired Pay Payment
An eligible officer may elect to take a 25% or 50% lump sum at the time of retirement that will reduce the monthly retired pay by a corresponding amount until the officer reaches full retirement age (as determined by the Social Security Act at 42 U.S.C. §416). After this age, the monthly retired pay will return to the full amount.

The BRS applies to all the uniformed services and will cover everyone whose Date of Initial Entry into Military Service (DIEMS) is on or after January 1, 2018. All other officers will automatically be grandfathered under the current retirement system. However, officers with less than 12 years of service on December 31, 2017 will be eligible to opt-in to the BRS during calendar year 2018, if desired. The opt-in decision is irrevocable, so eligible officers should carefully consider their own personal circumstances, time in service, career intentions, and financial situation to determine which retirement system is best for them.

The Commissioned Corps of the U.S. Public Health Service (Corps) is working closely with the other services in order to ensure consistent implementation among the services. There remains a number of issues to be determined that include the development of policy, finalizing issues related to the lump sum payment (e.g., personal discount rate, impact on Survivor Benefit Plan premiums, impact on disability compensation, etc.), and developing in-depth training courses.

Additionally, Congress may make minor adjustments to BRS through the 2017 NDAA. The Corps will provide periodic updates through the Commissioned Corps Management Information System (CCMIS) and mail messages to officers.

Online training designed to educate uniformed service members about the new Blended Retirement System (BRS) is now available on the Military OneSource website at www.militaryonesource.mil/

The DoD and the Commissioned Corps are taking a comprehensive approach to BRS education. In addition to the Leader Course, three additional courses are being developed and will be deployed over the next 18 months.

• Opt-In Course. Targeted specifically for those who will be eligible to opt into the new retirement system. This course will provide eligible members an understanding of both the current and new systems and provide calculators to help estimate prospective retired pays.
• New Accession Course. This course targets individuals who enter the Commissioned Corps on or after January 1, 2018. It is intended to provide, to those officers who enter the service under the BRS, an understanding of their blended retirement benefits and personal options.
• Financial Counselor Course. Targeted specifically for personal financial managers, counselors, retirement services officers and experts who serve in advisory role to commanders, service members and families.

To learn more about the Blended Retirement System, visit http://militarypay.defense.gov/BlendedRetirement/

If you still have questions after visiting the DoD BRS website, please email: phsccseparations2@hhs.gov