X hits on this document

Word document

TAKING CARE OF YOUR PEOPLE: - page 23 / 28

101 views

0 shares

0 downloads

0 comments

23 / 28

Plan

Eligible

(as determined by DIEMS) (Note 1)

Retired Pay Formula

(Notes 2, 3 & 4)

Cost-of-Living Adjustment (COLA) (Note 5)

Final Basic Pay

Entered service prior to 8 Sep 80

2.5% times the years of service times final basic pay

Full inflation protection; COLA based on Consumer Price Index (CPI)

High-3 (Note 6)

Entered service on or after 8 Sep 80 and before 1 Aug 86

2.5% times the years of service times the average of the highest 36 months of basic pay

Full inflation protection; COLA based on Consumer Price Index (CPI)

High-3 Choice

--------OR--------

Redux/Career Status Bonus Choice: Instead of retiring under High-3, members may choose to receive a $30K Career Status Bonus at 15 years of service and then retiring under the less generous Redux plan.

Entered service on or after 1 Aug 86

High-3: 2.5% times the years of service times the average of the highest 36 months of basic  pay

-------------------OR-------------------

*Redux/Career Status Bonus option: 2.5% times the years of service, minus one percentage point from the product for each year less than 30 years, times the average of the highest 36 months of basic pay.  At age 62, retired pay is recalculated without deducting the one percentage point for each year less than 30, which allows it to catch up to what it would have been without the Redux penalty.

High-3: Full inflation protection; COLA based on Consumer Price Index (CPI)

----------------OR----------------

*Redux/Career Status Bonus option: Partial inflation protection; COLA based on Consumer Price Index (CPI) minus 1 percent.  At age 62, retired pay is adjusted to reflect full COLA since retirement.  Partial COLA then resumes after age 62.

Note 1: Date initially entered military service (DIEMS) refers to the fixed date the member was first enlisted, appointed, or inducted.  This includes cadets at the Service Academies, students enrolled in a reserve component as part of the Services’ senior ROTC programs or ROTC financial assistance programs, students in the Uniformed Services University of the Health Sciences, participants in the Armed Forces Health Professions Scholarship program, officer candidates attending Officer Training School, and members in the Delayed Entry Program.

Note 2: The maximum multiplier is 75 percent times basic pay.  

Note 3: Members should be aware that the Uniformed Services Former Spouses Protection Act allows state courts to consider military retired pay as divisible property in divorce settlements.  The law does not direct state courts to divide retired pay; it simply permits them to do so.

Note 4: Retired pay stops upon the death of the retiree unless he or she was enrolled in the Survivor Benefit Plan.  See “Survivor Benefits” for additional information on this program.

Note 5:  COLA is applied annually to retired pay.

Note 6:  High-3 is a reference to the average of the high three years, or, more specifically, the highest 36 months, of basic pay as used in the formula.

 Information on all three plans is available at: http://www.afpc.randolph.af.mil/.  Additional information on the new High-3 and Redux/$30K Career Status Bonus choice is available at: http://pay2000.dtic.mil.  

THRIFT SAVINGS PLAN (TSP): Effective 2002, military members will be able to contribute to the popular TSP which federal civilian employees currently enjoy.  This will provide military members a 401(k)-like savings plan, which allows members to accumulate long-term, tax-deferred savings and earnings, with which they will be able to supplement future retirement income.

Document info
Document views101
Page views101
Page last viewedFri Jan 20 16:31:19 UTC 2017
Pages28
Paragraphs941
Words11631

Comments