ALCOAST 357/17 - DEC 2017 SITREP 8 - HUMAN CAPITAL STRATEGY - BLENDED RETIREMENT SYSTEM (BRS) - OPT-IN PERIOD

R 131407 DEC 17
FM COMDT COGARD WASHINGTON DC //CG-1//
TO ALCOAST
UNCLAS//N01000//
ALCOAST 357/17
COMDTNOTE 1000
SUBJ: SITREP 8 - HUMAN CAPITAL STRATEGY - BLENDED RETIREMENT SYSTEM (BRS) –
OPT-IN PERIOD
A. COMDT COGARD WASHINGTON DC 161451 DEC 16/ACN 445/16
B. COMDT COGARD WASHINGTON DC 241050 JAN 17/ACN 013/17
C. COMDT COGARD WASHINGTON DC 101400 FEB 17/ALCOAST 034/17
D. COMDT COGARD WASHINGTON DC 090903 JUN 17/ALCOAST 188/17
E. COMDT COGARD WASHINGTON DC 191547 SEP 17/ALCOAST 278/17
F. COMDT COGARD WASHINGTON DC 311100 OCT 17/ACN 120/17
G. Use of Non-Government Educational Material and Presenters, COMDTINST
1740.3 (series)
1.  This ALCOAST announces the BRS opt-in period for Active Component (AC)
service members who will have less than 12 years of service (YOS) on or
before 31 December 2017, based on their Pay Entry Base Date (PEBD), or
Reserve Component (RC) members with less than 4,320 retirement points
on or before 31 December 2017.  This ALCOAST also supplements guidance,
required training, and financial education opportunities noted in REFs (A)
thru (G).
2.  Eligible members electing to enroll in the BRS shall use Direct Access
(DA) which will be available on 1 January 2018.  Members unable to access DA
should consult their unit admin or the Pay and Personnel Center (PPC) for
assistance in making their election using a paper form available in the CG’s
online forms library.  Though a manual BRS enrollment request is an alternative,
every effort should be made to use DA to make a BRS election.  Members desiring
to opt-in to BRS should login to DA and follow these steps to navigate to the
“My BRS Elections” page: Self-service>Employee>Tasks. After answering three
questions affirmatively and clicking “Submit,” members will receive an email
from PPC acknowledging their request to elect the BRS.  The CG BRS website hosts
several opt-in guides and a short video showing the opt-in process.  Once PPC
validates eligibility, the member will receive a confirmation email documenting
their enrollment.  Individuals who make the election, but are found to be
ineligible will also receive an email from PPC.
3.  Members who are considering opting in to the BRS should also take into
account the following tips:
  A.  The decision to enroll in the BRS is irrevocable and cannot be changed
once made.  This cannot be overemphasized! 
  B.  Members who are considering opting in to the BRS are encouraged to make
this decision earlier rather than later.  Opting into the BRS earlier in 2018
allows members to maximize the Government’s automatic contribution (one percent)
and matching contributions (up to an additional four percent) to their Thrift
Savings Plan (TSP).  Additionally, members are encouraged to distribute their
voluntary contributions over the entire calendar year to take full advantage of
Government matching contributions, rather than making large contributions up
front.  If a member’s contributions reach the IRS maximum annual contribution
threshold before the last pay date of the year, they will not receive all
matching contributions they would be eligible to receive.  For example, if a
member reaches the annual maximum contribution limit in June, they will not be
able to receive Government matching contributions for the remainder of the
calendar year.  Visit the TSP calculator to determine the appropriate
contribution needed to maximize Government matching contributions.  For 2018,
the IRS maximum annual contribution amount is $18,500, an increase of $500
from 2017.  
  C.  In order to receive Continuation Pay (CP), an eligible member must enroll
in the BRS and elect to receive CP before surpassing 12 years of service (YOS). 
Members exceeding 12 YOS are not entitled to receive CP. To receive CP, members
must also agree to perform four additional years of service.  While BRS eligible
members who reach their 12th YOS by PEBD during 2018 have all calendar year
2018 to opt in to the BRS, they will only have until the anniversary date of
their 12th YOS by PEBD to opt into BRS and elect to receive CP (e.g. a member
whose PEBD is 6 Feb 2006 who reaches their 12th YOS on 5 February 2018 will only
have from 1 January 2018 to 5 February 2018 to elect to receive CP, but will have
until 31 December 2018 to opt into the BRS).  REF (E) announced CP rates for
calendar year 2018, which are 2.5 times the monthly basic pay for active duty
and 0.5 times the monthly basic pay for reservists.
  D.  Members do not need to take any action to remain in their current legacy
“high-3”retirement system. No opt-in eligible member will be automatically
enrolled into the BRS.
  E.  Regardless of a member’s retirement system decision, individuals eligible
for retirement after 20 years of qualifying service will receive a defined
benefit annuity.  Specifically, this means a payment for the remainder of their
life. The annuity rate under BRS is equal to 2 percent times the member’s years
of creditable service.  Under the legacy “high-3” system, the annuity multiplier
is 2.5 percent.
  F.  Currently, if a member making voluntary TSP contributions separates prior
to 20 years of service, under the legacy “high-3” retirement system, they will
leave with contributions and earnings from their TSP, if applicable, but without
any Government provided contributions or retirement savings.  Under BRS,
separating members leave with their voluntary and Government contributions and
earnings.  However, members must meet all vesting requirements. No matching
contributions will be made to a member’s TSP account after the pay period during
which the member completes 26 years of service from the PEBD.
4.  Following enrollment into the BRS, TSP accounts will be established for all
members without accounts. Members who voluntarily contributed to their TSP
accounts before implementation of the BRS will maintain their existing account,
but must re-affirm individual contribution percentages upon enrollment into the
BRS. No contributions made prior to enrollment into the BRS will be matched,
however, the balance of the TSP account will follow enrollment.
5.  Unless a specific investment election is made by a member, an individual’s
contribution and the Government’s contributions to TSP will be invested on
behalf of the member in an age-appropriate, target date asset allocation
investment fund, commonly known as the “Lifecycle” funds.  An individual’s
contributions to the TSP are treated by default, as “traditional” tax-deferred
contributions not as Roth, after-tax contributions.  The Coast Guard contributions
are always tax-deferred “traditional” contributions.  A member can change the tax
treatment of their contributions or the fund allocation by logging into their
account from the TSP website, www.tsp.gov.  Members will receive new account
information from TSP via U.S. Mail.
6.  For members opting in to the BRS, TSP automatic and matching contributions
will begin the pay period after choosing to enroll in the BRS.  Even though members
typically receive pay twice each month, military pay periods are considered monthly
and implementation rules state contributions will start the pay period following
BRS enrollment.  For example, if a member elects the BRS on 1 January 2018, the
enrollee can expect to see Government automatic and matching contributions on their
mid-month payslip in February 2018, the next pay period.
7.  The opening of the opt-in period in 2018 marks a significant milestone, but not
the end of the implementation process.  Eligible members have the entire year of
2018 to opt-in to the BRS so education efforts will continue through the year to
assist members in making this significant financial decision.  To prepare for the
BRS transition, eligible members must complete the mandatory Joint Knowledge Online
(JKO) opt-in course.  Designated members of the CG Auxiliary are available to
present the JKO course in a group setting.  Per REF (G), commands desiring
BRS-related education beyond the required JKO course should consider capitalizing on
existing presentations provided at no cost by several organizations in the financial
industry.  Visit the Office of Work-Life Programs website or the BRS website for
guidance on hosting a non-Governmental organization financial educator or CG
Auxiliarist at your unit.
8.  Commands have a steadfast duty to ensure members complete the mandatory JKO
opt-in training, to provide supplemental financial education, and to allow the
opportunity to enroll into the BRS using DA.  Commands shall ensure all BRS opt
in eligible members receive this ALCOAST as well as REFs (E) and (F).  A video
featuring the Vice Commandant hightlights the importance of preparing for this
significant change in military compensation and the duty of leaders at all levels to
educate members facing a retirement system decision.  For the latest information
including the Vice Commandant's video, visit the BRS website at http://www.dcms.uscg.mil/brs.
9.  Questions regarding the BRS or related items should be directed to
COMDT (CG-1331) at HQS-PolicyandStandards@uscg.mil.
10.  RDML William G. Kelly, Assistant Commandant for Human Resources, sends.
11.  Internet release is authorized.