Blended Retirement System Looms

The Defense Department is bringing in two experts on the impending Blended Retirement System, to train personnel on its details and prepare the force for the changes it will bring forth. Army Sgt. Maj. Luther Thomas Jr., outlined an “education strategy” that entails a timetable for training everyone from leadership to those who are new to the ranks, spanning from this month through January 2018. Under the changes, those who are serving as of Dec. 31, 2017, will remain under the old system. Those with fewer than 12 years on active duty or who have accrued fewer than 4,320 retirement points as reservists or Guard members will have the option of choosing the new or old system. Those who join on or after Jan. 1, 2018, will be enrolled in the Blended Retirement System. The new system will have an impact on 2.2 million people, and incorporate options to take part in the Thrift Savings Plan, with an annuity for those who serve 20 years or longer. Calculating the annuity will be based on a service member’s highest average basic pay during 36 months, multiplied by 2.5 percent of his or her years of service. The 2.5 percent will be adjusted downward by half a percentage point. The new system also calls for a mid-career continuation pay, which would take effect on or near the 12-year mark, intended to provide an incentive to remain on duty until qualifying for full retirement pay at the 20-year mark. The Thrift Savings Plan option allows service members to begin accruing money for retirement as soon as they join.