commissioned officer, warrant officer, or enlisted member. The DIEMS date is only used to determine the applicable retired pay system. It is not used in the computation of retirement benefits. The following list illustrates the DIEMS date in various situations: a. Academy Graduates. The DIEMS date is the date you entered the service academy. b. ROTC Graduates. The DIEMS date is the date you began an ROTC Scholarship program or enlisted as a Reserve member in the Senior ROTC program, whichever is earlier. c. Break–in Service. The DIEMS date is the date you initially entered a uniform service. Subsequent discharge and later reenlistments do not affect the DIEMS date. d. Delayed Entry Program. The DIEMS date is the date you signed up for the Delayed Entry Program. It is not the date you came on active duty. 4–3. RETIRED PAY SYSTEMS. FINAL PAY SYSTEM — Members with a DIEMS date before September 8, 1980. The computation of retired pay for these members is a three–step process: Step 1: Determine a “retirement factor” by multiplying years of service for retired pay by 2.5%. The factor is increased for full months of service completed in the final year of duty. Step 2: Determine your monthly base pay at time of retirement. Step 3: Multiply the retirement factor (Step 1) by the monthly base pay (Step 2) and round this amount down to the nearest whole dollar. High–36 SYSTEM— Members with a DIEMS date between September 8, 1980 and July 31, 1986. The computation of retired pay for these members is a three–step process: Step 1: Determine a “retirement factor” by multiplying years of service for retired pay by 2.5%. The factor is increased for full months of service completed in the final year of duty. Step 2: Determine the average monthly basic pay received during the highest 36 months of active duty. Step 3: Multiply the retirement factor (Step 1) by the average monthly basic pay (Step 2) and round the amount down to the nearest whole dollar.
RETIREMENT FACTOR TABLE
Final Pay/High-3 Plan
CSB/REDUX Plan
Years of Service
Years of Service
Factor
Factor
20
50.0%
20
40.0%
21
52.5%
21
43.5%
22
55.0%
22
47.0%
23
57.5%
23
50.5%
24
60.0%
24
54.0%
25
62.5%
25
57.5%
26
65.0%
26
61.0%
27
67.5%
27
64.5%
28
70.0%
28
68.0%
29
72.5%
29
71.5%
High–36 or CSB/REDUX SYSTEM — Members with a DIEMS date between August 1, 1986 and December 31, 2017. Members in this group are automatically covered under the High–36 system discussed above. However, those members who are qualified under service regulations for retention to 20 years of active service, may elect to use the optional CSB/ REDUX formula. The CSB/REDUX approach has three phases: Phase One. Between the 14 1/2 and 15th year of active service, you elect the REDUX option. At that time, you will be given a $30,000 Career Status Bonus (CSB). Members who receive this bonus must agree to serve a minimum total of 20 years. Although the bonus is taxable, a portion of the payment may be sheltered through contributions to both IRA and Thrift Savings Accounts. Phase Two. At the date of retirement, your retirement benefit is calculated using the average monthly basic pay received during the highest 36 months of active duty. However, the percentage multiplier that is initially used is lower than those used in the other formulas. The table above compares the retirement percentage factors used. This shows that for 20 years of service, members retiring under the CSB/REDUX plan receive a 40% retirement factor versus a 50% retirement factor for comparable service under the Final Pay and High–36 retirement plans. For each additional year of service 30 75.0% NOTE : The percentage factor is increased for full months of service in the final year of duty. Example : 20 years and six months of service equals a retirement factor of 51.25%. 75.0% 30
CHAPTER 4: MILITARY RETIREMENTS
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