Service personnel chiefs told lawmakers Friday they are watching how the new Blended Retirement System affects retention.
“I think it will be a significant indicator on retention in the out years,” Army Lt. Gen. Thomas Seamands, deputy chief of staff, G-1, told the House Armed Services Committee’s military personnel panel. “I think we’re going to have to fundamentally change how we address retaining talent.”
In today’s Army, if someone stays for 10 years, there’s a pretty high probability they’ll stay until the 20-year mark, he said. But “that dynamic could potentially change, but we won’t see that probably for the next seven to 10 years. So we need to be prepared. We’re thinking about it now, trying to get our heads around it.”
Rep. Don Bacon, R-Neb., said it’s his hunch that service members will get out at the 17-year mark under the new BRS, which comes with a retirement-fund matching plan and reduced pension, instead of the legacy system’s all-or-nothing retirement approach.
Those who are eligible to make a choice have until the end of 2018 to opt into BRS. Eligibility is limited to active-duty service members who have fewer than 12 years of total service as of Dec. 31, 2017; and reserve-component members in a paid status with fewer than 4,320 retirement points as of Dec. 31, 2017; all those entering service as of Jan. 1, 2018, automatically join BRS, and all those who’ve served beyond those benchmarks remain in the legacy system.
Under the legacy system, only about 19 percent of active-duty members and 14 percent of reservists stay long enough to earn retirement.
Just over a quarter into 2018, about 11 percent of the 1.6 million service members eligible to make a choice between the legacy retirement system and BRS have opted in to the BRS, according to DoD spokesman Army Maj. Dave Eastburn. That’s roughly 183,000 service members.
Eastburn also provided a breakdown by service branch:
- Army: 7.5 percent (60,405 opt-ins out of 810,301 eligible).
- Air Force: 12.6 percent (47,223 opt-ins out of 374,003 eligible).
- Navy: 14.3 percent (39,798 opt-ins out of 278,910 eligible).
- Marine Corps: 20.4 percent (35,743 opt-ins out of 175,627 eligible).
Those in the Army, Air Force and Navy must take action only if they want to opt in to the BRS. The Marine Corps is the only service that requires its members to register their decision regardless of whether they choose the new system or want to stay in the legacy system. Of the Marines eligible to make the decision, 28.4 percent have done so, with 72 percent of those Marines choosing the BRS.
DoD “has no target or goal for opt-in and no preference for which system a member should choose,” Eastburn said. “Each member’s decision will depend entirely upon his or her own personal circumstances.”
Under the BRS, troops automatically get a contribution from DoD of 1 percent of their monthly base pay to their Thrift Savings Plan, and up to 5 percent in matching contributions. The services will also make a one-time payout of continuation pay to those under BRS when they reach 12 years of service. For active duty members, it’s 2.5 times their monthly basic pay.
The services have flexibility in determining the amount and some terms of the continuation pay. “How we manage that continuation pay will be critical,” said Air Force Lt. Gen. Gina Grosso, deputy chief of staff for manpower, personnel and services.