§1409 Retired pay multiplier

Summary

Use a percentage of a member’s years of service to figure most military retired pay and certain Fleet Reserve retainer pay. This does not apply to disability retirement or non‑regular service retirement. Normally the percentage equals 2.5% times the member’s years of creditable service. If someone first joined after July 31, 1986, took the bonus allowed by section 322 (as it was before the National Defense Authorization Act for Fiscal Year 2008) or section 354 of title 37, has less than 30 years of service, and is under age 62 when retiring, the percentage is reduced by 1 percentage point for each whole year short of 30, and by 1/12 of 1 percentage point for each month short. Members with more than 30 years get special rules: retirees before January 1, 2007 use 75%; retirees after December 31, 2006 use 75% plus 2.5% for each year over 30 if authorized during a period set by the Secretary of Defense. For members who first join on or after January 1, 2018, or who make the election to be a “full TSP member,” the law uses 2% per year instead of 2.5%, a 60% cap instead of 75%, and 2% for years over 30. Members serving on December 31, 2017 with under 12 years of service could choose the full TSP option in 2018 instead of the higher multipliers; that election window was January 1 through December 31, 2018 (with limited extensions and 30‑day rules for reentry, commissioning, or moving to active status). The Secretary must publish rules to carry out these choices, and Thrift Savings Plan contributions cannot be applied before the date of a member’s election. “Years of creditable service” means the years used to compute retired or retainer pay, counting 1/12 of a year for each full extra month.