Welcome to the Navy Reserve! Beginning with the end in mind is a best practice. So, we’ve designed this material as part of onboarding new accession members within the first 6 months of service in the Navy Reserve, to help you chart a successful Navy Reserve career. This course introduces Navy Reserve Retirement fundamentals:  Benefits of continuing service in the Navy Reserve Military Life Cycle model of a Reserve Component member Title 10 US Code and Retirement from the Armed Forces DoD Retirement Systems DoD Retirement Plans And Reserve Career Management Best Practices towards retirement

Our Navy Reserve Fighting Instructions, commonly referred to as “nerfy”, have had three lines of effort since 2020 under Chief of Navy Reserve VADM John Mustin. These included Design the Force, Train the Force, and Mobilize the Force. In May 2022, CNR Mustin announced our fourth LOE – Develop the Force. Specifically, this LOE directed tasks including Military Life Cycle education through retirement. “3.D. DEVELOP THE FORCE PURPOSE. Inculcate a culture of excellence throughout the Force to maximize warfighting readiness. Reinforce Navy core values and signature behaviors, eliminate destructive behaviors, and emphasize Sailor and family wellness and readiness. Improve methods of educating, recruiting, retaining, and promoting our Sailors. Ensure Diversity, Equity, and Inclusion (DEI) are fully integrated throughout all personnel processes. (Flag Champion: RADM Lacore)” “3.D.4. Action: Maximize accession on-ramps, off-ramps and retention by enabling seamless transition opportunities between reserve and active service. 3.D.4.A. End State: The Force proactively assesses and responds to force-shaping manpower requirements to maintain projected Reserve Force end strength while offering flexible opportunities to balance commitments in and out of uniform”]

If you joined the Navy Reserve Component after some active duty time, you likely attended TAP – the Transition Assistance Program. TAP does sometimes include a brief on the Reserve. This brief commented on your Military Service Obligation. It highlighted your responsibilities as a member in the Inactive Ready Reserve (IRR). It further highlighted opportunities to continue actively serving in the Selected Reserve (SELRES). The brief noted benefits of being a SELRES: potential affiliation bonus, Reserve pay, health benefits including dental option, possible education benefits, life insurance, base and MWR privileges, networking, civilian job protections, plus a generous retirement benefit including optional Thrift Savings Plan. So, What’s your Why? How would you rank these in terms of what matters most to you? You may have been in touch with a Benefits Advisor during your transition to Navy Reserve. You likely still have lots of questions about how continuing to serve in the Navy Reserve can benefit you long term in retirement.

This slide illustrates a basic model of the Military Life Cycle of a Reserve Component member. Your Navy Reserve career gets quantified in a points-based system for retirement purposes. Throughout this series of videos on Reserve Retirement, I will use this model of a Navy Reserve Sailor’s Military Life Cycle. Major milestones include: In the blue box on the left Earn Retirement Points toward achieving Eligibility for retirement by Completing 20 Qualifying Years In the green box on the right Receive Notice of Eligibility and Elect Survivor Benefits; Transfer from Participation to the Retired Reserve; and Apply for and Receive Retired Pay and eventually full Benefits once on the Retired List. Many formal and informal surveys have indicated that the future retirement benefits are a main motivator for continued service in the Navy Reserve. Yet, I’ve found that there are many misconceptions and a general lack of understanding about how it all works. In other words, it takes at least 20 years to earn retirement benefits from continued military service in the Navy Reserve. Remember, there are two major retirement milestones for members of the Reserve Component. Most reservists essentially retire twice. First, once you earn eligibility for retirement, you can request to transfer to the Retired Reserve. This is sometimes referred to as Awaiting Pay, or being in the Gray Area. This typically happens several years prior to being eligible to draw retired pay. Then, about a year prior to being eligible to draw retired pay, nominally age 60, you will also need to apply for this retired pay that you earned. On average, a Sailor retiring from the Reserve Component spends about twelve years in this Gray Area before the pension. Occasionally, a Reservist can retire directly with pay, with basically zero time in the Gray Area, though this is less common. Members that join later in life, have breaks in service, serve for over 30 years, or have served on multiple s

Eligibility for Reserve Retirement from the Navy is defined as Non-Regular Retirement in Title 10 US Code. 10 U.S.Code Chapter 1223 - RETIRED PAY FOR NON-REGULAR SERVICE Retirement from Active Duty is predicated on 20 or more total years of active service, vice 20 Qualifying Years, and is defined as Regular Retirement in Title 10. So, what is this “Qualifying Year” all about, you may be wondering. It’s based on earning Reserve Retirement POINTS, annually, within your own unique Anniversary Year timeframe. Reserve Retirement Points are the quantitative means of crediting time worked by a Reserve or Guard) member, to correlate to active duty. You must earn enough Retirement Points in a specific time period, for at least 20 years, to earn eligibility for Reserve Retirement. If you already served on Active Duty or in another Service, you likely already have accrued some years toward these twenty total qualifying years. The specific time period is known as your Anniversary Year, is unique to you, and can shift over time with on and off ramps.

This slide highlights a few other references relevant to Reserve Retirement. In general, if you’re looking for instructions regarding retirements, look for 1800 series numbered documents. Familiarizing yourself with the BUPERSINST 1001.39F will serve you well in your Reserve endeavors.

You’ll want to know under which RETIREMENT SYSTEM you are serving, as there have been changes to these since 2017. The Legacy retirement system for DoD was purely pension-based. This “Legacy” system has been superseded by the newer “Blended Retirement System”, referred to as BRS. BRS was optional for most Navy Reservists in 2017, but mandatory for anyone who joined the military on or after 1 January 2018. It essentially means that retirement financial benefits result from a blend of a pension (also referred to as a Defined Benefit by Financial Planners), and a 401K-like investment collection of funds known as the Thrift Savings Plan, to which you can contribute and even get DoD employer matching (also referred to as a Defined Contribution Plan.) Those DoD members on the Legacy retirement system may also participate in the TSP, but do not have any option for matching contributions. The Legacy retirement system has a higher pension value than the Blended System, with a 2.5% multiplier compared to 2%. The basic idea is that those members in the Blended system will ultimately collect a slightly lower pension in a retired paycheck, but would have the opportunity during their years of active service to contribute with matching to an investment which they keep regardless of reaching eligibility for retirement after 20 or more years of qualifying service. If you joined the military on or after January 1, 2018, you are in the BRS. Again, BRS has a lower service multiplier of .02 vice .025, but opportunities for TSP matching contributions, plus some TRICARE premium differences. If you are working as a civilian in the federal system, such as on the GS payscale, or considering doing so, you may have or want to execute a “Buy Back”. Federal Buy Back has no effect on your Navy retirement points or retired pay. https://militarypay.defense.gov/Portals/3/Documents/Blended%20Retirement/FINRED-LeaderCard-31Aug17-Final.pdf?ver=2017-09-07-101041-543

You’ll also want to know under which RETIREMENT PAY PLAN your pension would be calculated. This is set by your unique Date of Initial Entry to Military Service, known as DIEMS. You can find your DIEMS in various Service Record documents and systems, such as NSIPS or your OMPF. Talk to your unit leadership or your Reserve Center’s Manpower Department if you need help finding this. Final Pay refers to the Primary retirement plan for Reserve members with initial date of entry into service prior to September 8, 1980. This is unlikely for you listening to this Introductory brief on Navy Reserve Retirement now. This is likely your pay plan. High-36 - a.k.a. High-3 - applies to those with **DIEMS Date on or after September 8, 1980. This is likely your pay plan. “For those who entered military service after 7 September 1980, the base pay is calculated by adding the base pay available for the member (commensurate with their rank and longevity) for each of the 36 preceding months prior to drawing retired pay, and dividing that by 36 to get an average pay rate for the final 3 years.” What this means, is taking the base pay figures from the active duty pay charts for your highest 3 years (specifically 36 months) prior to Retirement with Pay. Typically, this is also the last 36 months to pay eligibility. In other words, Navy Reserve Retirees eligible to draw retired pay starting in October 2023 would reference the average base pay of the paygrade and years of service on the pay chart for the previous three years (ie, 9 months of 2023, 2022, 2021, and 3 months of 2020), even if they had transferred to the Retired Reserve years prior to that. Going forward in retirement, COLA would apply to the dollar value of their monthly retired pay, based on the Consumer Price Index (CPI.) In order to estimate the future value of your Navy Reserve retired pay, you’d have to apply some assumptions about military base pay raises between now and that year in which you turn 60/eligible

YOUR Anniversary Year is the uniquely defined calendar year, specific to your, in which you earn Reserve Retirement Points. Point limits are per Anniversary Year. This is different from a Fiscal Year. During your Reserve career, you will need to meet requirements within various timeframes A Qualifying Year in the Reserves means that you as the service member earned a minimum of 50 Points, within your unique established Anniversary Year. Service that results in fewer than 50 Points in a given year will not count toward retirement eligibility, though these Points still tally toward the career total. Points are used for determining your years of creditable service that have applicability to the computation of reserve (non-regular) retired pay. Points directly yield retired pay, as shown in the equation for Retired Pay, Points divided by 360, times the Service Percent Multiplier (2% for Blended Retirement System, or 2.5% for Legacy Retirement System pre-2018, times Pay Base. “P” represents your actual numbers of career total Reserve Retirement Points, from your Statement of Service. “B” represents the base pay available at the time the member starts receiving retired pay at or after age 60.

Points come from both Inactive and Active sources. They are subject to various limits, such as max inactive points, max total points, and exclusionary rules which prevent simultaneous accrual of different types of points. Please note that there are several business rules and exceptions for how and when points may accrue. For example, you cannot earn FHD on the same day as IDT. You cannot earn inactive points during the same time as active points (except for JPME earned through the Naval War College.) Business rules preclude receiving IDT on the same day as funeral honors point, and vice versa.  The bottom line is 1 pt per day for funeral honors (ONLY and MAX); OR 2 points per day (MAX) for Drills. Continuing Medical Education (CME) credit is submitted to BUMED and BUMED forwards to PERS-912. Any educational seminar would have to be done when NOT otherwise in a duty status. BUMED would need to weigh in as to whether online counts; e.g., UpToDate and similar programs. But, valid points accrue together regardless of source to a total within each Anniversary Year. Over your entire career, points continue to accrue toward your Career Total Points. At the end of your career, if you’ve earned eligibility for non-regular retirement per Title 10 US Code, it’ll be your Career Total Points that goes into the computation for Retired Pay. Remember, you need at least 50 retirement points within each Anniversary Year to have that year qualify as 1 of the 20 toward retirement eligibility. Be planful with your duties in order to meet minimum requirements for both Satisfactory Participation and well as Qualifying Years. You can also be strategic in planning your duties in order to maximize your points accrued. Try not to overwork, such that you end up performing duties that can not accrue toward total points due to business rules. BEST PRACTICE: Regularly review your point record to assure accuracy, and advocate early for corrections if needed. Do not wait until you

What are some benefits of serving in the Navy Reserve? What is YOUR Why? How is Reserve Retirement defined in the law? What is your Retirement System? What is your Retirement Pay Plan? How is retired pay determined? How is your time in service credited as a Navy Reservist? [10-15 minutes; 10 content slides; 5 Knowledge Check questions.] This is likely your pay plan. Need more information? 101 & 201 course are also good for early to mid-career Navy Reservists. Looking for even more information? Check out “Navy Reserve Retirements” 301, 401, and Masters: 301 - Designed for mid- to late-career members of the Navy Reserve who are approaching their Notice of Eligibility and Survivor Benefits election milestone, with 15+ Qualifying Years toward Non-Regular Retirement eligibility, to support effective career timing and personal financial decision-making concerning retirement and benefits. (Formerly RTO’s Reserve Retirement Counseling Session.) 401 – Like a Capstone course, Designed for late-career members of the Navy Reserve with 19+ Qualifying Years toward Non-Regular Retirement eligibility, who are ready to transfer to the Retired Reserve or retire directly “With Pay”, and may have additional complexity in their transition timing and paperwork, in order to support timely and effective request or application submission for retirement through MyNavyHR and ensure they have accurate benefits information for their retirement transition. (Recommend further attendance of a Facilitated Live Event, such as MyNavyHR’s RTO program’s Retirement Awareness Workshop.) Masters – Designed for those Retired Reservists who are approaching eligibility to draw retired pay, and need to know how to proceed for successful receipt of retired pay via DFAS and benefits including TRICARE and more.