{"id":56912,"date":"2018-10-22T14:58:28","date_gmt":"2018-10-22T14:58:28","guid":{"rendered":"https:\/\/one.sightlinemg.com\/marinecorpstimes\/uncategorized\/2018\/10\/22\/not-many-troops-are-opting-into-the-new-retirement-system\/"},"modified":"2026-08-08T11:41:35","modified_gmt":"2026-08-08T11:41:35","slug":"not-many-troops-are-opting-into-the-new-retirement-system","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/marinecorpstimes\/pay-benefits\/2018\/10\/22\/not-many-troops-are-opting-into-the-new-retirement-system\/","title":{"rendered":"Not many troops are opting into the new retirement system"},"content":{"rendered":"\n

With less than three months to go before the year-end deadline, only one in six service members who are eligible to make the choice to opt in to the new military retirement system<\/a> have done so, falling far short of prior expectations and raising questions about why the response has been so low.<\/p>\n\n\n\n

About 1.6 million active-duty and reserve troops are eligible to opt into the new retirement system, which promises a smaller pension check for those who complete a 20-year career but offers cash payments into a personal retirement account that service members can keep regardless of how long they stay in the military.<\/p>\n\n\n\n

As of the end of September, 16.5 percent of those eligible service members have opted in to the Blended Retirement System<\/a>, also known as the BRS, according to defense officials. The deadline for eligible service members to opt in to BRS<\/a> is Dec. 31.<\/p>\n\n\n\n

Yet within the individual military services, the response has varied significantly. The Marines<\/a> have the highest opt-in rate, with 36.6 percent opting in to BRS. They\u2019ve continued the trend from earlier this year. More than a third of the service members who opted in to BRS since July are Marines \u2014 the smallest service.<\/p>\n\n\n\n

The service with the lowest percentage of enrollment is the Army, at 10.5 percent of eligible soldiers opting in. To date, 20.5 percent of sailors have opted in, and 16.9 percent of airmen.<\/p>\n\n\n\n

The numbers are raising two basic questions: Are people just procrastinating in making their decision? Or are they affirmatively choosing not to opt into the BRS?<\/p>\n\n\n\n

\u201cIt\u2019s a really important question for someone to figure out what\u2019s going on,\u201d said Beth Asch, a senior economist at RAND specializing in defense manpower and compensation issues who has done extensive research and analysis on the BRS.<\/p>\n\n\n\n

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A 2015 law<\/a> fundamentally changed the traditional retirement system for all future service members. Yet for troops who were in uniform at the time the law was changed, they now get a choice whether to keep the legacy benefit or to enroll in the new system.<\/p>\n\n\n\n

The traditional retirement system might be better for troops who will definitely complete a 20-year career because the pension checks will be higher. But for younger service members who may decide to leave the military before the 20-year mark \u2014 and would get no retirement benefit at all under the traditional system \u2014 the new system might be better because it will allow them to accrue some money in a retirement savings account that they can keep.<\/p>\n\n\n\n

The retirement savings is accrued in a Thrift Savings Plan, or TSP.<\/p>\n\n\n\n

All troops entering the military starting in 2018 are automatically enrolled into the new Blended Retirement System. But those with fewer than 12 years of service as of the end of 2017 can make the choice in 2018 to either stay with the legacy system or switch to the new BRS.<\/p>\n\n\n\n

The Army, Navy and Air Force don\u2019t require their service members to take any steps if they\u2019re going to stay with the legacy retirement system. If they do nothing, service members will automatically remain enrolled in the traditional retirement system. But in order to choose the BRS, they must actively take the steps to opt in and fill out paperwork stating that intent.<\/p>\n\n\n\n

The Marine Corps is the only service that requires its members to register their decisions regardless of whether they opt in to the BRS or stay with the legacy system.<\/p>\n\n\n\n

Of the nearly 176,00 Marines eligible to make the choice, 54 percent have done so. Of those Marines, about 30,200 have explicitly decided to remain with the legacy retirement system, or about 17 percent of the total Marines eligible to make the choice. (They can also change their minds and opt in to BRS by Dec. 31.)<\/p>\n\n\n\n

Some are puzzled why more service members haven\u2019t opted in \u2014 especially younger enlisted troops with only a few years in the military.<\/p>\n\n\n\n

\u201cI\u2019m a little surprised that the take rate isn\u2019t higher,\u201d said Stephen Pietropaoli, a retired Navy rear admiral who is chief operating officer for Navy Mutual.<\/p>\n\n\n\n

Pietropaoli\u2019s speculation is that most people just haven\u2019t decided.<\/p>\n\n\n\n

\u201cYou have to actually sit down and apply some mental energy to do an assessment, an analysis,\u201d of life goals, expectations of being able to continue their military career, their personal finances, and what they\u2019re trading for the portable TSP package, Pietropaoli said.<\/p>\n\n\n\n

\u201cWhen you give them a whole year to decide, a lot of them will take the whole year,\u201d he said. “But there\u2019s also the possibility that many will miss the deadline for opting in, and there will be dissatisfaction. … That\u2019s what I think the services should be worried about.\u201d<\/p>\n\n\n\n

He said it might help if the other services follow the Marine Corps example: requiring eligible service members to register their decision, whether they are opting in or staying in the legacy system.<\/p>\n\n\n\n

Pentagon officials take a neutral stance, and have said they have no target or goal for opt-in, and no preference for which system individual service members choose. Each decision is an individual one, based on the service member\u2019s circumstances and future plans.<\/p>\n\n\n\n

For more than two years, the Defense Department and the services have been conducting a financial education campaign to inform service members about the features of the new plan, and questions to consider as they compare the features with the legacy plan. That includes a tool that allows service members to plug in their particular numbers and compare the results for staying in the legacy system, and moving to the new system.<\/p>\n\n\n\n

\u201cAs we move into the final stage of the opt-in period, [DoD] is continuing its aggressive communications strategy,\u201d said DoD spokeswoman Air Force Maj. Carla Gleason. \u201cThis awareness campaign incorporates social media, the Armed Forces Network, direct communications, and local installation commands,\u201d she said.<\/p>\n\n\n\t