A bill that would reopen the enrollment period for certain service members to opt-in to a Thrift Savings Plan offering and bolster financial training for military families has been introduced in the Senate.
Sen. Patty Murray, D-Wash., member of the Senate Veterans' Affairs Committee, introduced on Tuesday the Re-Open Enrollment for Servicemembers to Opt-In to Updated Retirement Choice for Enduring Security Act of 2020, or RESOURCES Act.
The National Defense Authorization Act for Fiscal Year 2016, which was passed in 2015, created a Blended Retirement System within the $612 billion TSP for all uniformed services members who enter service Jan. 1, 2018, or later.
But while new service members are automatically enrolled in the plan, those with less than 12 years of service as of Jan. 1, 2018, were eligible to join the BRS by opting in.
Previously, members of the uniformed services had access to a defined benefit plan but had to serve at least 20 years to receive the annuity. The payment amount was determined by their years of service and the average of their highest 36 months of basic pay, but only a small portion of service members reached the 20-year plateau. Historically, 19% of active-duty service members ultimately received retirement funds, according to a news release from Ms. Murray.
The BRS offers service members a defined contribution option as part of the TSP, as well as a reduced pension should they hit the 20-year mark.
In order to give service members another opportunity to join the BRS, the RESOURCES Act would establish a new election period and require additional training for military families on the BRS.
A 2019 survey sponsored by the Military Family Advisory Network and referenced in Ms. Murray's news release found that more than 44% of respondents did not know which retirement plan they had chosen. Of those respondents, 26.4% would change retirement plans if given the option.
The bill would also expand and enhance financial training available to service members and their families, create a Department of Defense advisory council on financial readiness, require financial counseling for service members receiving loans from military welfare societies, and enact additional disclosures and greater transparency surrounding lump sum payments.
"Service members and their families sacrifice so much to keep us all safe, and the last thing they should have to worry about is how they'll get by once they have completed their service," Ms. Murray said in the news release. "The RESOURCES Act is an important step we must take for military families in Washington state and across the country to ensure that they have all of the necessary tools, opportunities and knowledge to not only manage their current financial situations, but also effectively plan for the future."
