Financial Management Element 42 Pg. 202

Survivors Benefits Plan Indirect Compensation Overview Purpose Standards Thrift Savings Plan Blended Retirement System Survivors Benefits Plan Indirect Compensation

Purpose & standard Purpose To inform the service member of the financial resources available to help with transition Standards Financial well-being and the security of loved ones are concerns that are usually at the top of a transitioning service member’s priority list. Careful financial planning is the key to managing a limited income.

Thrift savings plan TSP is a retirement/savings plan. It involves a defined contribution plan that is similar to a 401(k) program. The purpose of TSP is to provide retirement income. The amount contributed and the earnings attributable to the contributions belong to the member, even if they do not serve the 20 or more years ordinarily necessary to receive uniformed services retired pay. Your TSP account is a portable retirement benefit . This means that when you make a full or partial withdrawal of your account after you leave service, you can have the TSP transfer part or all of your single payment or certain monthly payments to an IRA or an eligible employer plan (for example, the 401(k) plan of a new employer) .

Blended retirement system The BRS plan moves military members from a retirement system that mostly relied on a vested defined benefit plan to one that includes a reduced defined benefit plan with greater TSP benefits, continuation pay and some lump-sum options. Military employers will match their service members’ TSP contributions dollar for dollar for up to 5%. Two groups of service members will be eligible to participate in the new retirement system: 1. Service members who enter the military on or after Jan. 1, 2018. 2. Members of the military with 12 years or fewer of service on Dec.31, 2017 who decide to opt in to blended retirement. *** Last Day to Opt in to the BRS is Dec.31, 2018 ***

Survivor benefit plan When a military retiree dies their retirement pay stops. This means that the survivors will be left without a substantial income source. One option available is the SBP. The SBP is an insurance plan that will pay the surviving spouse a monthly payment (annuity) to help make up for the loss of retirement income. The plan is designed to protect survivors against the risks of: The members’ early death The survivor outliving the benefits Inflation **Must elect SBP at time of retirement**

Indirect compensation There are other programs that supplement your military pay. Things you probably don’t think about. Yet these items, especially when considering separation, have a monetary value that you need to calculate so that you know what your “real pay” is. These items include: Medical /Dental Federal Tax Advantage on your BAH and BAS State/Local Tax Advantage Military Pension Serviceman’s Group Life Insurance (SGLI) Discounted Services at the Commissary and NEX Education Programs 196Navy Pre-Separation Counselor Training – V3.1 Counseling and Assistance Programs Legal Counseling/Services• Space Available Travel Gym Membership

Resources Financial management specialists at Fleet and Family Service Centers TSP: www.tsp.gov or the Thriftline 1-877-968-3778 BRS: http://militarypay.defense.gov SBP: http://militarypay.defense.gov/Benefits/Survivor-Benefit-Program/ www.military.com www.militaryonesource.mil http://militarybenefits.info

Blended Retirement System INDIRECT COMPENSATION Summary Thrift Savings Plan Blended Retirement System Survivors Benefit Pay INDIRECT COMPENSATION RESOURSES

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