MAY 8, 2017, NORFOLK (NNS) – Fincancial advisors aboard the aircraft carrier USS George Washington (CVN 73) have begun educating Sailors about the new blended retirement system (BRS), set to take effect Jan. 1, 2018.
The Department of Defense (DOD) will be retiring the legacy High Three retirement system and rolling out the BRS option.
Although it won’t come into effect for several more months, there are plenty of reasons to learn about what it offers and what it could mean for service members.
Service members who join the military after Dec. 31, 2017 will automatically be enrolled into the BRS. Service members with less than 12 years of service as of Dec. 31, 2017 (entered the service after Dec. 31, 2005 but before Jan. 1, 2018) will have the choice to either enroll with BRS or remain with the High Three system. Service members with 12 or more years of service will remain in the High Three system.
“Everyone wants to know which system they should go with,” said Chief Religious Programs Specialist William Murdy, assigned to George Washington. “There is no clear answer though, since there are many factors and variables when it comes to individuals. Staying with High Three will be the better option for some and the BRS will serve others better.”
Eligible service members will have the chance to opt-in from Jan. 1, 2018 to Dec. 31, 2018. Service members will be given the necessary training and resources to make the decision to either stay with High Three or to go with the BRS.
“Everyone will have to do training on the BRS,” said Chief Machinist’s Mate Paul Tornabene, George Washington’s lead command financial specialist and the facilitator for the BRS. “The senior Sailors who aren’t eligible to opt-in will be required to do the same training so they can train and inform junior Sailors, so they can make the best decisions for themselves. And those who plan on going with the new system will have to do additional training.”
No one joining prior to Jan. 1, 2018 will be automatically enrolled into the BRS and those who choose not to opt-in to BRS during the Jan. 1, 2018 through Dec. 31, 2018 opt-in period will be irrevocably locked into the legacy High Three retirement system. Service members that utilize the Defense Finance and Accounting Service (DFAS) will utilize MyPay to opt in to the new system.
“I would say the BRS is the better option for Sailors not planning on re-enlisting,” said Murdy. “The BRS is very similar to a 401(K) plan in the civilian sector. After the minimum two years of service required for the plan, you’ll be eligible to receive benefits from BRS if you decide to not re-enlist.”
Most service members (about 81 percent) do not make it to the 20-year mark and leave the military with no retirement benefits. Under the BRS, about 85 percent of service members will receive a retirement benefit even if they don’t qualify for full retirement.
“The biggest difference between High Three and the BRS is the length of service in order to receive benefits,” said Tornabene. “With BRS, you won’t need to stay in for 20 or more years to start receiving retirement benefits.”
The DOD will automatically contribute one percent of a service member’s base pay to their Thrift Savings Plan (TSP) after 60 days of service. After the completion of two years of service, the service member is vested and the money belongs to them. If they decide to not re-enlist, the money goes with them.
“The DOD will also contribute matching and automatic contributions at the start of your third year of service,” said Murdy. “The DOD will automatically contribute one percent and up to an additional four percent if you decide to contribute five percent or more.”
Service members that opt in to the BRS will begin receiving automatic and matching applicable government contributions effective the first pay period after the opt-in, but it is important for service members to fully understand the new BRS and to take their time to make an informed decision.
For more information about the Blended Retirement System, visit militarypay.defense.gov/BlendedRetirement or see a command counselor or financial specialist.
By Mass Communication Specialist 2nd Class Bryan Mai, USS George Washington Public Affairs