Yokota Air Base, Japan -- As Airmen begin their military career, one thing that may not be immediately considered is a retirement plan, but an important change to the U.S. military retirement system is presenting new options. The U.S. Air Force is now enabling Airmen to immediately put money into a retirement fund at the start of their career.
The Blended Retirement System will take effect Jan. 1, 2018. All Airmen joining the service on or after that date are automatically enrolled in the BRS and Airmen with less than 12 years of service have an opportunity to enroll.
“The Blended Retirement System is a wonderful program that provides all Airmen an opportunity to save toward their retirement,” said Jonelle Finley, Airman & Family Readiness Center community readiness consultant. “Even if the Air Force is a short-term investment, Airmen will have funds toward their retirement very early in their career cycle.”
The new system is comprised of a thrift savings plan with matching funds and a retirement annuity for completing 20 or more years of eligible service. Airmen entering on and after the BRS start date will automatically be enrolled in the new retirement system. Airmen entering the service prior to 1 January 2018, will be grandfathered under the current retirement system; however, service members with less than 12 years of service, or less than 4,320 points for the Air Reserve Component, as of Dec. 31, 2017 will have the option to elect the BRS if they desire.
According to the MyPay website, modernizing the current retirement system into the BRS will not only ensure that the vast majority of all uniformed members receive a portable retirement benefit, but it will also help make Uniformed Service a more attractive option for those who would like to serve but do not plan to stay for an entire career.
Under the BRS, service members receive some portable retirement benefit after two years of service. Enrollment is automatic with three percent of base pay going into the service member's account. After 60 days of service, the Department of Defense automatically starts contributing an amount equal to one percent of base pay and continues with the automatic contribution until the member separates, retires or reaches 26 years of service (calculated from pay date), whichever comes first.
Vesting occurs after two years of service, where the DoD will begin to match service member contributions up to four percent of base pay. This is in addition to the automatic one percent contribution for a total of up to five percent.
The BRS blends the current 20-year cliff-vested defined benefit annuity with a defined contribution plan that combines government and service member contributions in a portable TSP account.
The current TSP under the Legacy Retirement System is completely separate from the BRS TSP; if Airmen choose the BRS, they can contribute to both TSPs or contribute into the new account.
The retirement pay for service members will change under the new plan.
For Airmen under the Legacy Retirement System plan, the current plan, retirement pay is calculated as follows: (number of years of service) X (2.5 percent) X (basic pay for the grade held at the time of retirement).
For Airmen who elect or are enrolled in the new plan and serve 20 years or more, the retirement pay is calculated as follows: 2% X (20 years of service) + 3.5% X (years of service over 20) X (average of highest 36 months of base pay)
With so much information to remember and the impact it can have on financial planning for the future, several options are now available to ensure Yokota Airmen have the tools needed to make the right decision.
The BRS presentation, which is being conducted in squadrons throughout Yokota, provides an overview of the new program and offers up a forum for questions from Airmen.
Additionally, the A&FRC provides one-on-one consultations to provide Airmen individualized attention toward their specific need. They also host multiple TSP classes since the BRS includes a TSP component. Their focus is to ensure service members have a comprehensive understanding of their retirement benefits.
“Those Airmen who are eligible to choose the new system will have a choice to make,” Finley said. “Each decision is unique to the individual’s career and retirement goals and there isn’t a single right answer for everyone. Examine both options carefully, complete the training, and schedule an appointment with one of our financial counselors.”
The BRS information is continuously updated on: https://mypers.af.mil/, once there, click "Retirement" from any military landing page to locate the information. In addition, a live chat feature on BRS is available for Airmen. Service members can also contact the AFRC at 225-8725 to speak with a counselor or attend a briefing.