Blended Retirement System Opt-In Period (Flag Voice 481 and ALCOAST 357/17)

Implementation of the Blended Retirement System (BRS) on January 1, 2018 represents the largest change to Uniformed Services’ compensation in seven decades. Preparations to accommodate the modernized retirement system have been underway for the past 18 months to ready the Coast Guard and its members for the new retirement system. Beginning in January, 30,000 active and reserve members will have the option to enroll in the BRS using a self-service page in Direct Access, which will be available to accept elections starting January 1st. Eligible members who desire to remain in the legacy "high-three" retirement system do not have to take any action. All new accessions after January 1, 2018 will be automatically enrolled in the BRS and do not have a choice in retirement systems. The Career Status Bonus/REDUX retirement option sunsets on December 31, 2017 and will no longer be an alternative.

BRS eligible members are required to complete the Joint Knowledge Online (JKO) Opt-in course and self-certify completion in the Coast Guard’s Learning Management System. Currently, over 82 percent of eligible members completed the JKO Opt-in course. I strongly encourage all leaders to take an active role in preparing your people to make an informed choice. The JKO training coupled with the BRS comparison calculator work cooperatively to help members assess their retirement system options, but nothing beats engaged leadership at all levels to ensure our members and their families are prepared for this change.

Choosing a retirement system is a consequential decision, and the approach to that choice should be no different than the extensive preparations members undertake in executing the Coast Guard's missions. The CG Auxiliary and several qualified financial institutions remain available to supplement the JKO training and provide BRS and financial wellness education. The CG BRS website provides details for capitalizing on these education resources. While the Coast Guard has no preference in member retirement system elections, it is vitally important for individuals to make the decision that’s right for them and their families.

The start of the year-long opt-in period represents a landmark event in BRS implementation, but not an ending. BRS marketing and education efforts will continue unabated in 2018. The Integrated Planning Team remains focused on Direct Access enhancements, retirement manual development, new accessions training and resourcing all components of the BRS.

ALCOAST 357/17 contains a video message from the Vice Commandant, a video demonstrating the opt-in process and several important tips for those members considering the BRS.

RDML William G. Kelly

RDML WILLIAM G. KELLY
Assistant Commandant for Human Resources

Issue date: 12/13/17

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

1. COMDT COGARD WASHINGTON DC 161451 DEC 16/ACN 445/16
2. COMDT COGARD WASHINGTON DC 241050 JAN 17/ACN 013/17
3. COMDT COGARD WASHINGTON DC 101400 FEB 17/ALCOAST 034/17
4. COMDT COGARD WASHINGTON DC 090903 JUN 17/ALCOAST 188/17
5. COMDT COGARD WASHINGTON DC 191547 SEP 17/ALCOAST 278/17
6. COMDT COGARD WASHINGTON DC 311100 OCT 17/ACN 120/17
7. 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:
1. The decision to enroll in the BRS is irrevocable and cannot be changed once made. This cannot be overemphasized!
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.