During the last few decades of the military, servicemen have been rewarded for serving the country with a pension after a minimum of 20 years. It’s a grueling proposition, which presumes that in a job with such high-mortality ratings they will survive to see the benefits. But, if the servicemen are fortunate enough to survive the minimum 20, the reward is rather satisfying. Better yet, some service members are as young as 37 when they’re able to retire from active duty. It’s an enticing metaphorical carrot at the end of the stick for many who desire to join the service and with good reason. But, lately, the military leadership has been seeking to incorporate a new type of retirement. The Blended Retirement System (BRS) which makes multiple promises on how it will improve the older “Legacy” system while minimizing the overall expense of retirees.

The BRS system makes several adjustments to the legacy retirement plan, the key change being the amount received after 20 years. Currently, the legacy system accumulates at a 2.5% over the period of 20 to an eventual 50% of the salary. The calculations are made by taking the average of the highest three paychecks received by the servicemen and then splitting the amount in half. It’s simply and easy to understand, which is why it appeals to the forces. But, with the BRS the accumulation would instead be at a 2.0% rating per year which eventually becomes 40% after 20. In order to make up for the deficiency though, the Blended Retirement System offers a few additional incentives.

The first incentive comes in the form of one percent of the salary addition to a Thrift Savings Plan (TSP a form of 401k) from the government. The second incentive is an additional 4% matching to whatever amount of contributions the member applies to his TSP. Meaning if the member puts in 5% of their salary in the TSP the total amount would equate to 10% with the aforementioned perks. Finally, the last incentive comes in the of a lump-sum amount option which can be received once the member retires from active duty (but, this one comes with some heavy penalties in the long term). All of these perks might sound good on paper, but sadly they fall on the short-sighted end of the spectrum.

For one, while the percentage matching of the TSP sounds great for some, it fails to account for a bearish market. There is a reason that 401k’s are known by some as 201k’s and don’t contain the same appeal as they did once. Two is that it presumes that all military members will invest in their TSP, and as it is right now, it’s simply not true. Members don’t automatically sign up for TSP, and even though the BRS is making it mandatory to have an account; what’s stopping the members from simply receiving the 1% from the BRS alone? Finally, the system assumes that people will stay for 20 years of service for 40% of their salary when there are plenty of opportunities to earn more money in the civilian sector. It’s doubtable that many current servicemen will switch over to the new system, but that’s not going to be an issue much longer as some will not even have a choice.

The BRS is only optional for members who joined before it came into effect. This means that anyone joining in the next following years will automatically be in the BRS without hope of having any alternatives. Which in an already dwindling military force as the retention rate continues to decline, will mean servicemen will lack an incentive to reenlist.

Disclaimer: The content in this article is the opinion of the writer and does not necessarily reflect the policies or opinions of US Patriot Tactical.

Emmanuel

Emmanuel "Dash the Bomber" Barbosa

Emmanuel Barbosa, AKA Dash The Bomber, is currently serving in the 7th fleet, and has over 8 years of experience in the military. A writer with a penchant for the humorous and informative, he loves to share his stories with those who would be willing to listen. Having served in deployments that have taken him around the world, Dash has seen and heard about many things that would be hard to believe. A loving father and a faithful husband, he is dedicated to protecting his family and country. For fun he enjoys cosplaying, videogames, and writing for online magazines.
Emmanuel

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