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Topic 1.19 Fleet Reserve & Retirement
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Topic 1.19 Fleet Reserve & Retirement

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  • 1. Career Development Training Course Fleet Reserve and Retirement 1
  • 2. Retirement = Financial Independence! 2
  • 3. Fleet Reserve and RetirementEnabling ObjectivesUpon successful completion of this topic, the trainee will be able to: IDENTIFY personnel eligible for the Navy Fleet Reserve and retirement. STATE the purpose of the Fleet Reserve. IDENTIFY the duties credited towards Active Service in the Armed Forces. IDENTIFY the required documentation for transferring to the Fleet Reserve. 3
  • 4. Fleet Reserve and RetirementEnabling Objectives (cont.) IDENTIFY the non-disability Fleet Reserve retirement procedures and privileges. LIST the factors affecting retirement pay. IDENTIFY the effects on retainer pay if recalled. IDENTIFY how the Date Initial Entry Military Service (DIEMS) affects retirement. LIST the three military retirement systems in effect. 4
  • 5. Fleet Reserve and RetirementEnabling Objectives (cont.) IDENTIFY the steps to compute retainer pay for all three retirement systems. IDENTIFY the factors to consider when deciding on a retirement system. LIST the eligibility requirements for the U.S. Naval Reserve (USNR). IDENTIFY the steps to calculate USNR retirement pay. IDENTIFY the CCC’s responsibilities for command retirement ceremonies. 5
  • 6. Fleet Reserve and RetirementReferences NAVPERS 15560(series), Navy Military Personnel Manual (MILPERSMAN) NAVADMIN 344/02, Revised Career Status Bonus and REDUX Retired Pay System Navy Personnel website: http:// www.npc.navy.mil Retirement Calculator: http://www.npc.navy.mil under Career Info/Pay and Benefits Career Status Bonus website: http:// www.npc.navy.mil/AboutUs/NPC/ITIM/Data Management/CareerStatusBonus/ 6
  • 7. Fleet Reserve and RetirementFleet Reserve and Retirement Overview MILPERSMAN 1830-040 Consists of military personnel who have completed 20 to 30 years of Active Service in the Armed Forces (ASAF). CCCs initially screen Sailors to determine eligibility. CCCs help Sailors verify their statement of service. 7
  • 8. Fleet Reserve and RetirementFleet Reserve Purpose Provides an available reserve of former members of the Regular Navy and the Naval Reserve who may be used without further training to fill those billets requiring experienced personnel in the initial stages of mobilization during an emergency or in war (Art. 1830-040). 8
  • 9. Fleet Reserve and RetirementFleet Reserve Eligibility Requirements Complete 20 years of credible service (ASAF). Complete current assignment or DOD tour. E-7/8/9 must serve 2 years in present pay grade. Those in HYT zone can compete for advancement. (Verify HYT with current MPM and NAVADMINs) 9
  • 10. Fleet Reserve and RetirementFleet Reserve Creditable Service MILPERSMAN 1830-040/7220-130 Service creditable for ASAF:  Active Duty (day for day)  Active Duty for Training (ACDUTRA):  After 9 August 56  Army and Air Guard (federalized only) 10
  • 11. Fleet Reserve and RetirementFleet Reserve Documentation Requests for Transfer to Fleet Reserve:  Submit a special request chit up to 6 to 18 months (E-6 and below) or up to 24 months (E-7 to E-9) in advance via OPINS/NSIPS (PERS-823).  Authorization for transfer arrives via naval message. 11
  • 12. Fleet Reserve and RetirementFleet Reserve Documentation (cont.) NAVCOMPT 2274:  Pre-retirement pay information DD Form 2656 SBP:  Sample form in BUPERSINST 1750.11 Continued Obligation:  MILPERSMAN 1830-070 & 1800-040 12
  • 13. Fleet Reserve and Retirement Non-Disability Fleet Reserve Retirement Retirement from Fleet Reserve is automatic. Retired List: >30 Years (MILPERSMAN 1800-040):  Permanent change of status and may only be changed by resignation or discharge approved by the SECNAV, or following a court-martial sentence.  Application submitted by OPINS/NSIPS to president via PERS 823.  Constructive service counts (but not minority enlistment). 13
  • 14. Fleet Reserve and RetirementNon-Disability Fleet ReservePrivileges  ID card  Commissary/Exchange  Legal  Chaplain  Medical  Travel 14
  • 15. Fleet Reserve and RetirementRetirement Pay Factors Factors That Affect Pay:  Date of initial entry  Pay scale in effect  Pay Entry Base Date (PEBD)  Amount of ASAF:  Active service is rounded down to the lowest month and converted to a decimal. Example: 23 years, 5 months, 23 days = 23 years, 5 months = 23.4166 years.  Retainer pay shall not exceed 75% base pay 15
  • 16. Fleet Reserve and RetirementRetirement Pay Factors (cont.) Heroism:  Increase retainer 10%, or if at 75%, 10% tax free. Medal of Honor:  Add $1,027.00 to calculated retainer pay. Effects on Pay if Recalled:  1 Day – 23 mos., 29 days: Add ASAF (old pay scale).  > 24 mos. continuous: Recomputed (new pay scale). 16
  • 17. Fleet Reserve and RetirementDate Initial Entry Military Service (DIEMS) Obscure, but critical, date:  Determines your retirement plan. Date first enlisted/commissioned into any component of the armed forces:  Has no bearing on longevity for pay or years of service.  Should never change; not adjusted for broken time or time lost. 17
  • 18. Fleet Reserve and RetirementMilitary Retirement Plans Original/“Final Pay” Plan “High 3” Plan “REDUX/CSB” Plan (REDUX plus Career Status Bonus) 18
  • 19. Three Ways of Computing Retainer/Retired Pay 8 Sep 80 1 Aug 86 HIGH 3 Now called REDUX/CSB Now called FINAL PAY * DIEMS on or after * DIEMS on or after 1AUG 86* DIEMS prior to 8 Sep 80 8 Sep 80 * COLA - 1%* Full COLA * Full COLA * (2 1/2% x ASAF) - (1 YAS <* 2 1/2% x ASAF x BP = RP * 2 1/2% x BP (36 mos. 30) x BP (36 mos. avg.) = RP(DTC) avg.) x ASAF = RP (DTC) (DTC) 19
  • 20. Fleet Reserve and RetirementRetirement Plan Choice http://www.npc.navy.mil Detailed information - NAVADMIN 344/02:  One-time catch-up at age 62  Bonus options  Sample case studies  Personalized calculator 20
  • 21. Fleet Reserve and RetirementRetirement Plan Choice (cont.) Review a few considerations:  A one-time, irrevocable decision.  If CSB/REDUX is chosen, bonus will be taxed.  Biggest difference in REDUX is not the 40% at 20 - it is the “Minus 1% COLA” feature.  CSB affects SBP premium.  CSB/REDUX looks better the longer you remain on active duty. 21
  • 22. Fleet Reserve and RetirementRetirement Plan Choice (cont.) Consumer Price Index (CPI):  Determined by cost of living increases (federal government).  Do not confuse retired COLA with overseas COLA.  Huge benefit to those receiving retainer pay.  Those with a DIEMS after 1 August 86 electing CSB receive CPI - 1%. 22
  • 23. Fleet Reserve and RetirementMilitary Retirement Comparisons Years of Service “Final/High 3” % “REDUX” % 20 50 40 21 52.5 43.5 22 55 47 23 57.5 50.5 24 60 54 25 62.5 57.5 26 65 61 27 67.5 64.5 28 70 68 29 72.5 71.5 30 75 75 23
  • 24. Fleet Reserve and RetirementUSNR Retirement Eligibility Achieves 20 years of qualifying service and reaches age of 60. Maintains a minimum of 50 points per year to qualify:  1 point for each drill or one point for each annual training day.  Various points credited for completion of approved correspondence courses.  Gratuitous points up to 15 points per year. 24
  • 25. Fleet Reserve and RetirementUSNR Retirement Pay ComputationTotal points X 0.025 X BP = Retired 360 Pay 25
  • 26. Fleet Reserve and RetirementStatement of Service Complete accounting of all military service credited towards ASAF for Retirement /Fleet Reserve. 26
  • 27. Fleet Reserve and RetirementRetirement Ceremonies MILPERSMAN 1800-010 Ceremony:  Is a Sailor’s choice.  Is sponsored by Sailor’s last permanent duty station.  Is assigned a ceremony coordinator.  Is official and traditional. CCC responsibilities:  Make sure all documents are prepared.  Make sure command issues flag.  Verify ceremony script is appropriate.  Make yourself available to coordinator. 27
  • 28. Fleet Reserve and RetirementSelected Websites www.npc.navy.mil www.ssa.gov www.va.gov Retirement Calculators:  www.asec.org (“ballpark estimate”)  www.smartmoney.com  www.financialengines.com Retirement Education:  www.vanguard.com  www.morningstar.com  www.aoa.dhhs.gov/retirement/fpfr.html w 28
  • 29. Fleet Reserve and RetirementSummary and Review When are you eligible to transfer to the Fleet Reserve? What is the effective date for transfer to the Fleet Reserve? How early can you request transfer to the Fleet Reserve? 29
  • 30. Fleet Reserve and RetirementSummary and Review (cont.) What is the formula for Non- Disability Retirement? What is the maximum retirement % you can receive? Who is eligible for REDUX/CSB? 30