Blended Military Retirement Plans Not as Popular as Projected


With passage of the new Blended Retirement System in 2016, the Defense Department’s Office of Actuary, assisted by computer modeling from the think tank RAND Corp., made some assumptions critical to planning future military retirement cost obligations.

More than 862,000 active duty members and 202,000 drilling reserve and National Guard personnel, actuaries forecast, would opt to leave their High-3 retirement plan for the BRS during a year-long “open season” that ended Dec. 31.

Turns out those projections were far too high.

Near-final tallies of opt-in decisions for BRS (through Dec. 17) show only 280,000 active duty members and just over 72,000 reserve component personnel chose to shift out of the High-3 plan.

High-3 is the more generous retirement plan for members who serve 20 years or more year and earn its lifetime annuity. The BRS provides a 20 percent smaller annuity. But for the majority of service members who don’t serve full-length careers, the BRS also provides a Thrift Savings Plan that is bolstered by government matching of member contributions.

Assuming no extraordinary rush to switch plans in its final two weeks of the open season — before and after Christmas — the BRS opt-in results fell as much as two-thirds below projections for active duty and reserve component forces.

In July 2016, the Department of Defense Board of Actuaries, which is responsible for ensuring the DoD Military Retirement Fund is properly valued and actuarially sound, accepted RAND’s estimate that a total of 916,754 active and reserve component members would opt into the BRS when it became available.


Connect with us on Facebook!