Blended Retirement

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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. Further details are available at afrc.af.mil, (see Headlines or search Blended Retirement Talking Points).