Because fiscal year 2016 National Defense Authorization Act provided a change to the military force with a change in the retirement plan, current eligible members of the National Guard have a choice to make.
The change in the retirement system provides a portable retirement plan with the Thrift Savings Plan. Soldiers have been able to sign up to use the TSP, but did not receive matching government funds. That has changed with the implementation of the BRS.
This retirement option allows Soldiers to determine how much of their pay they will contribute to their TSP account. If they contribute up to 5 percent to their TSP account they will receive matching funds of up to 5 percent. If the contribute 4 percent they government matching funds with be 4 percent. If they contribute 2 percent then the government matching funds will be 2 percent.
The issue that has come to light is that up to 26 percent of Soldiers who elected to Opt-In to the BRS system are contributing 0 percent and so they are receiving 0 percent matching government funds. It does not take strong math skills to know that 0 x 0 = 0.
Soldiers can correct this lack of contributions by logging into their MyPay account and increasing the percent of contribution they are making. So many Soldiers are not realizing that under BRS the TSP account is part of their retirement planning. If they do not contribute to BRS there will be a shortfall come time for retirement. Also, there will be nothing to take with you if you decide not to continue on for 20 years of credible service for retirement.
Leaders at all levels need to ensure that Soldiers have the information they need to make informed decisions concerning their BRS contributions to TSP. Brenda Lenz is the Personal Financial Counselor dedicated to the Kansas National Guard and eligible to educate our Soldiers on their financial literacy. Something very critical to be aware of and take full advantage of so that our Soldiers are well prepared for their financial future.
The window is closing for Soldiers to be choose to Opt-in to the Blended Retirement. Anyone that joined the National Guard prior to December 31, 2017, with less than 4,320 retirement points as of December 31 2017. The period for eligible members to opt in to BRS is Jan. 1 through Dec. 31, 2018. Any member joining the military after Jan. 1, 2018, will automatically be placed in the Blended Retirement System.
Upon completion of 20 qualifying years of service and attaining the age of 60, members will be eligible for the monthly retirement pay and the TSP savings managed during those 20+ years of service. If Soldiers do not contribute to their TSP account, they will have nothing to manage upon retirement. It is important that they track their TSP account balance.
Collecting retirement pay has two options:
- Collect full retirement pay annuity beginning at age 60 or earlier based on credited active service;
- Accept a 25 percent or 50 percent lump sum pay out at retirement with a reduced annuity at age 60. This monthly annuity bumps back up to 100 percent at full retirement age, in most cases age 67.
The window to enroll in BRS closes December 31, 2018. The decision to move to the BRS is an individual decision.
Information and training is also available in a Non-CAC location on www.MilitaryOneSource.mil.
Another website to go to is My Army Benefits; http://myarmybenefits.us.army.mil/ .
The Personal Finance Counselor (PFC) for the Kansas National Guard is Brenda Lenz. She can be reached at (785) 551-2321 or firstname.lastname@example.org. She can provide individual counseling as well as group training. Scheduling a PFC to present training for a group can be requested on www.MilitaryOneSource.mil. Anyone wanting to schedule a one-on-one counseling session please contact Brenda Lenz directly.
The Blended Retirement System is a significant change and allows military members to earn retirement benefits even if they do not complete 20 years of service. This is something that needs your time and attention so that you make an informed decision! If you have made the decision to Opt-In to BRS check your MyPay account to ensure you are contributing to your TSP account.