Beginning January 1, 2018, the military pension system added a new program for military members, creating a retirement system similar to that of the civilian 401(k) or IRA plans. The Blended Retirement System was launched and became another option for retirement savings for military members in addition to the current “High-36” system or the Career Status Bonus/REDUX system (CSB). Unlike the older two programs, the Blended Retirement System does not require a service member to have twenty or more years of service completed in order to receive a monthly retirement benefit. Rather, the Blended Retirement System is more like a private company’s 401(k), providing retirement savings to members who serve less than twenty years, while still including an existing annuity provision for those who serve twenty years or more.
An important provision of the Blended Retirement System is that it automatically transfers 3% of a member’s paycheck into a Thrift Savings Plan which a member grows throughout their service in the military and receives upon their retirement regardless of how long they serve. A member can choose to transfer more of their paycheck, and the government offers a match of up to 5% for members who have served at least two years. Under the other two systems, a Thrift Savings Plan was not a mandatory tool used for retirement savings. Also, under the Blended Retirement System, bonuses are provided to members who have between eight and twelve years of service and then commit to a new tour of service. Further, once a member has served twenty years, they are also eligible to receive a monthly pension check as in the other two retirement programs.
To opt-in to the Blended Retirement System, a member must have joined the armed forces after December 31, 2005. If a member joined before January 1, 2006, they will remain in their current retirement system and cannot opt-in to the Blended Retirement System. If a member joined between January 1, 2006 through December 31, 2017, they can choose which retirement system to utilize out of all three options. Those who joined the military January 1, 2018 or after are automatically enrolled in the Blended Retirement System. The following chart summarizes enlistment dates and corresponding retirement options.
|Enlistment Date||Retirement Option(s)|
|Before and until December 31, 2005||Must remain in current system, no opt-in to the Blended Retirement System|
|January 1, 2006 through December 31, 2017||Option to choose any system.|
|January 1, 2018 or after||Automatically enrolled in the Blended Retirement System.|
The opt-in period for the Blended Retirement System began on January 1, 2018 and concludes on December 31, 2018. Once a member opts-in to the Blended Retirement System, the decision is irreversible.
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