topic 1.19 fleet reserve & retirement

Career Development Training Course

Fleet Reserve and Retirement

1

Retirement = Financial Independence!2


Enabling Objectives

Upon successful completion of this topic, the trainee will be able to:

IDENTIFY personnel eligible for the Navy Fleet Reserve and retirement.

STATE the purpose of the Fleet Reserve. IDENTIFY the duties credited towards Active

Service in the Armed Forces. IDENTIFY the required documentation for

transferring to the Fleet Reserve.

3


Enabling Objectives (cont.)

IDENTIFY the non-disability Fleet Reserve retirement procedures and privileges.

LIST the factors affecting retirement pay. IDENTIFY the effects on retainer pay if

recalled. IDENTIFY how the Date Initial Entry Military

Service (DIEMS) affects retirement. LIST the three military retirement systems in

effect.

4


Enabling Objectives (cont.)

IDENTIFY the steps to compute retainer pay for all three retirement systems.

IDENTIFY the factors to consider when deciding on a retirement system.

LIST the eligibility requirements for the U.S. Naval Reserve (USNR).

IDENTIFY the steps to calculate USNR retirement pay.

IDENTIFY the CCC’s responsibilities for command retirement ceremonies.

5


References NAVPERS 15560(series), Navy Military

Personnel Manual (MILPERSMAN) NAVADMIN 344/02, Revised Career Status

Bonus and REDUX Retired Pay System Navy Personnel website:

http://www.npc.navy.mil Retirement Calculator:

http://www.npc.navy.mil under Career Info/Pay and Benefits

Career Status Bonus website: http://www.npc.navy.mil/AboutUs/NPC/ITIM/Data Management/CareerStatusBonus/

6


Fleet Reserve and Retirement Overview

MILPERSMAN 1830-040Consists of military personnel who

have completed 20 to 30 years of Active Service in the Armed Forces (ASAF).

CCCs initially screen Sailors to determine eligibility.

CCCs help Sailors verify their statement of service.

7


Fleet Reserve Purpose

Provides an available reserve of former members of the Regular Navy and the Naval Reserve who may be used without further training to fill those billets requiring experienced personnel in the initial stages of mobilization during an emergency or in war (Art. 1830-040).

8


Fleet Reserve Eligibility Requirements

Complete 20 years of credible service (ASAF).

Complete current assignment or DOD tour.

E-7/8/9 must serve 2 years in present pay grade.

Those in HYT zone can compete for advancement. (Verify HYT with current MPM and NAVADMINs)

9


Fleet Reserve Creditable Service

MILPERSMAN 1830-040/7220-130Service creditable for ASAF:

Active Duty (day for day)Active Duty for Training (ACDUTRA):

After 9 August 56Army and Air Guard (federalized only)

10


Fleet Reserve Documentation

Requests for Transfer to Fleet Reserve:Submit a special request chit up to 6

to 18 months (E-6 and below) or up to 24 months (E-7 to E-9) in advance via OPINS/NSIPS (PERS-823).

Authorization for transfer arrives via naval message.

11


Fleet Reserve Documentation (cont.)

NAVCOMPT 2274:Pre-retirement pay information

DD Form 2656 SBP: Sample form in BUPERSINST 1750.11

Continued Obligation:MILPERSMAN 1830-070 & 1800-040

12


Non-Disability Fleet Reserve Retirement

Retirement from Fleet Reserve is automatic.Retired List: >30 Years (MILPERSMAN 1800-

040):Permanent change of status and may only be

changed by resignation or discharge approved by the SECNAV, or following a court-martial sentence.

Application submitted by OPINS/NSIPS to president via PERS 823.

Constructive service counts (but not minority enlistment).

13


Non-Disability Fleet Reserve Privileges

ID card Commissary/Exchange Legal Chaplain Medical Travel

14


Retirement Pay Factors

Factors That Affect Pay:Date of initial entry Pay scale in effectPay Entry Base Date (PEBD)Amount of ASAF:

Active service is rounded down to the lowest month and converted to a decimal. Example: 23 years, 5 months, 23 days = 23 years, 5 months = 23.4166 years.

Retainer pay shall not exceed 75% base pay

15


Retirement Pay Factors (cont.)

Heroism:Increase retainer 10%, or if at 75%, 10%

tax free.Medal of Honor:

Add $1,027.00 to calculated retainer pay.Effects on Pay if Recalled:

1 Day – 23 mos., 29 days: Add ASAF (old pay scale).

> 24 mos. continuous: Recomputed (new pay scale).

16


Date Initial Entry Military Service (DIEMS)

Obscure, but critical, date:Determines your retirement plan.

Date first enlisted/commissioned into any component of the armed forces:Has no bearing on longevity for pay or

years of service.Should never change; not adjusted for

broken time or time lost.

17


Military Retirement Plans

Original/“Final Pay” Plan “High 3” Plan“REDUX/CSB” Plan (REDUX plus

Career Status Bonus)

18

Three Ways of Computing Retainer/Retired Pay

Now called REDUX/CSB* DIEMS on or after 1AUG 86* COLA - 1%* (2 1/2% x ASAF) - (1 YAS < 30) x BP (36 mos. avg.) = RP (DTC)

Now called FINAL PAY* DIEMS prior to 8 Sep 80* Full COLA* 2 1/2% x ASAF x BP = RP (DTC)

HIGH 3* DIEMS on or after 8 Sep 80* Full COLA* 2 1/2% x BP (36 mos. avg.) x ASAF = RP (DTC)

8 Sep 80 1 Aug 86

19


Retirement Plan Choice

http://www.npc.navy.milDetailed information - NAVADMIN

344/02:One-time catch-up at age 62Bonus optionsSample case studies Personalized calculator

20


Retirement Plan Choice (cont.)

Review a few considerations: A one-time, irrevocable decision.If CSB/REDUX is chosen, bonus will be

taxed.Biggest difference in REDUX is not the

40% at 20 - it is the “Minus 1% COLA” feature.

CSB affects SBP premium.CSB/REDUX looks better the longer

you remain on active duty.

21


Retirement Plan Choice (cont.)

Consumer Price Index (CPI):Determined by cost of living increases

(federal government).Do not confuse retired COLA with

overseas COLA.Huge benefit to those receiving

retainer pay.Those with a DIEMS after 1 August 86

electing CSB receive CPI - 1%.

22


Military Retirement Comparisons

Years of Service “Final/High 3” % “REDUX” %20 50 4021 52.5 43.522 55 4723 57.5 50.524 60 5425 62.5 57.526 65 6127 67.5 64.528 70 6829 72.5 71.530 75 75

23


USNR Retirement Eligibility

Achieves 20 years of qualifying service and reaches age of 60.

Maintains a minimum of 50 points per year to qualify:1 point for each drill or one point for each

annual training day.Various points credited for completion of

approved correspondence courses.Gratuitous points up to 15 points per

year.

24


USNR Retirement Pay Computation

Total points X 0.025 X BP = Retired

360Pay

25


Statement of Service

Complete accounting of all military service credited towards ASAF for Retirement /Fleet Reserve.

26


Retirement Ceremonies

MILPERSMAN 1800-010 Ceremony:

Is a Sailor’s choice. Is sponsored by Sailor’s last permanent duty

station. Is assigned a ceremony coordinator. Is official and traditional.

CCC responsibilities:Make sure all documents are prepared.Make sure command issues flag.Verify ceremony script is appropriate.Make yourself available to coordinator.

27


Selected Websites

www.npc.navy.mil www.ssa.gov www.va.gov Retirement Calculators:

www.asec.org (“ballpark estimate”)www.smartmoney.com www.financialengines.com

Retirement Education:www.vanguard.com www.morningstar.comwww.aoa.dhhs.gov/retirement/fpfr.html

28


Summary and Review

When are you eligible to transfer to the Fleet Reserve?

What is the effective date for transfer to the Fleet Reserve?

How early can you request transfer to the Fleet Reserve?

29


Summary and Review (cont.)

What is the formula for Non-Disability Retirement?

What is the maximum retirement % you can receive?

Who is eligible for REDUX/CSB?

30

topic 1.19 fleet reserve & retirement

Career

navyfleet reserve

naval reserve whomay

naval reserve usnr

base pay

final pay

retirement calculator

retirement overview

years milpersman