Things I Learned from The Military Guide about the Blended Retirement System
One of the best things about the blogging community is the opportunity to learn from each other. The Military Guide recently had a very informative post called Tricky Details Of The Military Blended Retirement System. Despite having taken a fairly deep dive on the new Blended Retirement System (BRS) and creating our BRS Resource Center, I still learned a few things from The Military Guide’s post:
- If you opt in to the BRS during the first half of January and contribute at least 5% of your base pay to your Thrift Savings Plan account, then the DoD will also start contributing 5% in January.
- At 0001 EST 1 January 2018 you’ll be able to opt in to the BRS in MyPay, Marine OnLine, or Direct Access.
- Your TSP matching contributions will also vest immediately. Those matching contributions are yours and they’ll stay in your TSP account even if you leave the military on 1 February. This is only for those who opt in to the BRS– everyone else who joins the military in 2018 has a two-year vesting period on their TSP contributions. Those two situations are covered in paragraph 7.b.(8).(b) of the BRS implementation guidance and in federal law Title 5 U.S. Code section 8432(g)(2).
- Most of the services process their payrolls during the third week of the month. If you wait past 15 January to opt in then you’re jeopardizing your January match.
- So far all of the services require signing up before 12 years of service for an obligation of four years in order to receive the continuation pay (CP). The rates can be found at this link. I hadn’t seen them in any official capacity up until now.
- The CP timing is different from the BRS. If you’re eligible to opt in to the BRS on 31 December 2017 then you have all of 2018 to opt in. However you have to sign up for CP before you reach 12 years of service. If you’re at 11 years and 11 months of service on 31 December then you’re eligible for the BRS, but you’d only have one month to sign up for CP.
- You have to make sure that you still have room to contribute at least 5% of your base pay to the TSP every month of the rest of the year. If you hit the TSP contribution limit too soon ($18,500 in 2018) by contributing a lump-sum bonus, like your CP, then your DoD match will stop for the rest of the year.
- The CP amounts could change as the services tailor the payments for various communities and specialties. CP will be used as a retention incentive.
Thanks to The Military Guide for such an informative post.