The National Defense Authorization Act for Fiscal Year 2016 created a modernized retirement system for the military. This new retirement system is effective January 1, Everyone serving today is grandfathered and can stay under the current system. Those with fewer than 12 years of service as of December 31, 2017 will have an opportunity to opt- in to the new system during calendar year Today's military retirement system provides monthly retired pay after you serve at least 20 years. Tomorrow's retirement system pays a lesser amount of monthly retired pay after 20 years, but supplements it with government contributions to your Thrift Savings Plan account and a mid-career continuation bonus. Under the new system, members who serve at least two years retain their contributions, the government contributions made on their behalf, plus the earnings on all of the contributions. Source: modernize.aspx Published 8 January 2016http://militarypay.defense.gov/Media/News/tabid/13438/Article/642042/the-national-defense-authorization-act-for-fiscal-year-2016-created-a- modernize.aspx

PlansCSB/REDUXHigh-36BRS Effective Date1 Aug Sep Jan 2018 Opt OutYes: Into High-3 or BRSYes: Into BRSNo Multiplier2.5 x #yrs (minus 1% for each yr <30 yrs) Example: 20 yrs = 40% 2.5 x #yrs Example: 20 yrs = 50% 2.0 x #yrs Example: 20 yrs = 40% Cost of Living Adjustment (COLA) = Consumer Price Index (CPI) Minus 1% = Consumer Price Index (CPI) Base Pay DeterminentAverage of Highest 36 months of Basic Pay Thrift Savings Plan (TSP)Yes: Optional Yes: Mandatory (1% of Basic Pay after 60 days of service) TSP MatchingNo Yes: 1% up to 5% (3 yrs thru 26 yrs of service) TSP Performance (10-yr Compound): G Fund: 2.94% F Fund: 4.74% C Fund: 7.36% S Fund: 8.03% I Fund: 3.20% TSP VestingN/A 2 yrs of Service TSP WithdrawlAge 59 ½ without early withdrawal penalties. May be taxable Career Status Bonus (CSB) / Continuation Pay (CP) CSB: 15 YOS w/obligation to serve 20 yrs (Taxable) NoneCP: 2.5 months of Basic 12 YOS in exchange for additional 4 yrs service (Taxable) Payout Retirement to age 61: REDUX Annuity (lower) multiplier. Age 62: High-3 annuity (higher) multiplier. No catch-up. Full retired pay annuityOption A: Full retired pay annuity Option B: Lump sum with reduced annuity (returning to 100% at full retirement age: 67 in most cases)

Thrift Savings Plan Projections (Rough Estimates) Base PaySrA: $30,000SSgt: $38,400TSgt: $43,200MSgt: $53,664 # Years Age at Separation/Retirement 25 (Sep)29 (Sep)31 (Sep)39 (Ret) # Years till payout (age 60) % Growth5% Mandatory 1% DoD Auto Contribution (AC) = $8,590 (1%)= $13,761(1%)= $16,118 (1%)= $19,055 (1%) Optional Personal Contribution (PC) + 1% DoD Auto Contribution (AC) + DoD Matching Contribution (MC) 1% PC + 1% AC + 1% MC = $25,770 (3%) 1% PC + 1% AC + 1% MC = $41,284 (3%) 1% PC + 1% AC + 1% MC = $48,355 (3%) 1% PC + 1% AC + 1% MC = $57,164 (3%) 2% PC + 1% AC + 2 % MC = $42,950 (5%) 2% PC + 1% AC + 2 % MC = $68,807 (5%) 2% PC + 1% AC + 2 % MC = $80,591 (5%) 2% PC + 1% AC + 2 % MC = $95,274 (5%) 3% PC + 1% AC + 3% MC = $60,130 (7%) 3% PC + 1% AC + 3% MC = $96,331 (7%) 3% PC + 1% AC + 3% MC = $112,828 (7%) 3% PC + 1% AC + 3% MC = $133,384 (7%) 4% PC + 1% AC + 4% MC = $85,900 (10%) 4% PC + 1% AC + 4% MC = $137,616 (10%) 4% PC + 1% AC + 4% MC = $161,183 (10%) 4% PC + 1% AC + 4% MC = $190,549 (10%) CAVEAT: TSP Payments based upon maximum possible contributions over applicable career length with promotion to each rank at earliest opportunity and a 5% funds growth rate over entire TSP fund life. Funds withdrawal to start at age 60.

MSgt (20-year) Retirement Plans Comparisons ROUGH ESTIMATES Retirement PlanHigh – 36CSB/REDUXBRS Retired Pay (mo/yr) (effective ages) $2083 / $24,996 (39-80) $1672 / $20,064 (39-61) $2083 / $24,996 (62-80) $1672 / $20,064 (39-80) **TSP Payments (based on max contribution) (mo/yr) Optional $1250 / $15,000 (age 60 to 79) TSP Payments (based on min contribution) (mo/yr) Optional $375 / $4500 (age 60 to 78) Career Status Bonus (CSB)N/A$30,000N/A Continuation Pay (CP)N/A $11,180 Income Taxes on CSB / CP (15%)N/A-$4,500-$1,677 *Survivor Benefit Plan (mo/yr) (optional)-$135 / -$1620- $108 / -$1296 *TRICARE Prime (mo/yr) (optional)-$45 / -$540 *Dental Insurance (mo/yr) (optional)-$114 / -$1368 *VGLI Insurance (optional)-$68 / -$816 Cost of Living Adjustment (COLA)CPICPI (minus 1%)CPI TOTAL RETIREMENT BENEFIT (Pre-Tax) 41 years of Retired Status ~$1,024,836~$941,400 ~$1,118,804 (max) ~$914,804 (min) Percentage of Retirement Benefit (Annuity) Payable Upon Retirement from Active Duty 100% 87% (based on REDUX-lowered multiplier) 74% (based on REDUX-lowered multiplier and TSP unavailable till age 60) **CAVEAT: TSP Payments based upon maximum possible contributions over entire 20 year career with promotion to each rank at earliest opportunity and a 5% funds growth rate over entire TSP fund life (20 year career + 41 year retired status).

**CAVEATS: Based on 20-yr retired MSgt, Base Pay of $4166 per month. 1: High-36 Plan growth based on average 2% annual COLA 2: CSB/REDUX Plan growth based on 1% annual COLA. Multiplier increased to 2.5 at age 62. No catch-up on multiplier. 3: BRS (TSP) Max TSP based upon maximum possible contributions over entire 20 year career (promotion to each rank at earliest opportunity and a 5% funds growth rate over entire TSP fund life). TSP annuity starts at age 60. 2% annual COLA 4: BRS (TSP) Max TSP based upon minimum possible contributions over entire 20 year career (promotion to each rank at earliest opportunity and a 5% funds growth rate over entire TSP fund life). TSP annuity starts at age 60. 2% annual COLA

Resources ementDocuments/BlendedRetirementSystemInfographic_ _FI NAL3_508.pdf ementDocuments/BlendedRetirementSystemInfographic_ _FI NAL3_508.pdf ementDocuments/FAQ%20for%20BRS.pdf ementDocuments/FAQ%20for%20BRS.pdf