Blended retirement

The Fiscal Year 2016 National Defense Authorization Act (NDAA) contains a new retirement system (“blended military retirement system”). This system combines a reduced defined benefit, like the current retirement system, with a defined contribution component (automatic plus matching contributions to a member’s Thrift Savings Plan account) and continuation pay. The blended retirement system uses a 2.0 percent rather than 2.5 percent multiplier in calculating military retired pay. Thus, a member who served 20 years would receive 40 percent of the average of the highest 36 months of basic pay, a Thrift Savings Plan account that contained government and optional member contributions, as well as continuation pay at the 12th year of service

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