The Blended Retirement System (BRS) is a combination of the Thrift Savings Plan (TSP) and the modified existing annuity that military retirement has traditionally been for servicemembers after 20+ years. Thus the term “Blended.”
Why Did The BRS come into existence?
There are several reasons why the BRS came into existence, some for the good of the individual service members and some for the good of the service/government.
In no particular order:
- Over 75% of military members were not completing 20 years of service and were left without any form of a retirement pension or 401K. (Outside of the voluntary contributing no-match TSP). The BRS creates the ability for a service member to have at least some 401K with no servicemember contributions, let alone if the individual contributes and does 20-years.
- The government is able to reduce the cost of military pensions for those who do complete 20+ years, in the long term saving the government money
- Military members are now more involved in their retirement planning from the start of their military careers
- Military members can now actively contribute to their retirement planning through their careers, with unique tax benefits when deployed overseas or certain identified zones.
Who is Impacted by the Blended Retirement System?
Eventually, every servicemember will be enrolled in the BRS, but right now only a select percentage is currently enrolled. In 2018, those on Active/Reserve duty with some time already in service had to decide between the old retirement system and the new.
At the end of 2018, a surprisingly low number of individuals opted into the BRS. You can find an article here about it: https://www.stripes.com/final-opt-in-rates-for-blended-retirement-yield-more-surprises-1.564861
So right now there are two groups of servicemembers. Those who are enrolled in the legacy retirement system and those who voluntarily enrolled in the BRS or were not afforded the option to chose due to a short time in service.
As the individuals enrolled in the legacy retirement system exit the military over the next 10+ years, eventually every servicemember will be enrolled in the BRS. The BRS will become the majority military retirement plan.
Some Good Resources About the BRS:
- Forbes Article: https://www.forbes.com/sites/ryanguina/2018/12/04/blended-retirement-system-opportunity-of-lifetime/#11b0e42920c3
- The Official BRS FAQ Document: https://militarypay.defense.gov/Portals/3/Documents/BlendedRetirementDocuments/BRS%20Frequently%20Asked%20Questions%2003282018.pdf?ver=2018-03-28-235150-797
- A Stars & Stripes Article About Opt-In Results: https://www.stripes.com/final-opt-in-rates-for-blended-retirement-yield-more-surprises-1.564861
- Military.com article explaining the BRS: https://www.military.com/benefits/military-pay/blended-retirement-system.html
- The Official Thrift Savings Plan website: https://www.tsp.gov/index.html
- Video Series From the TSP Board: https://www.youtube.com/user/TSP4gov/videos
