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United States Department of Defense - Defense.gov

 

 

 

CSB-REDUX Plan Details

 

The Military Reform Act of 1986 created the REDUX retirement plan and it applied to all members who joined on or after August 1, 1986. The National Defense Authorization Act (NDAA) for FY2000 amended this plan. The NDAA made two major changes: 1) it allows those in this group to choose between the High-36 retirement plan and the REDUX retirement plan and 2) it added a $30,000 Career Status Bonus as part of the REDUX retirement plan.

 

The CSB/REDUX retirement plan applies to those who entered Service on or after August 1, 1986, AND who elected to receive the $30,000 Career Status Bonus at their 15th year of service.

 

The REDUX retirement plan and Career Status Bonus is a "package deal." It is the combination of these two items that can be advantageous to many individuals. The REDUX portion determines retirement income (the longer one's career, the higher that income) and the $30,000 Career Status Bonus provides current cash---available for investing, major purchases, or setting up a business after retirement.

 

REDUX Plan Details
The REDUX multiplier calculation and annual cost of living adjustments differ from the other plans. Also, REDUX has a catch-up increase at age 62 that brings the REDUX retired pay back to the same amount paid under the High-36 Plan. REDUX is the only military retirement plan with a readjustment feature.

 

The REDUX multiplier is reduced from the High-36 mulitplier 1 percentage point for each full year the member's years of creditable service are less than 30 years. The table below summarizes the initial multiplier at various years of service under REDUX.

 

Years of service

20

21

22

23

24

25

26

27

28

29

30

REDUX

40%

43.5%

47%

50.5%

54%

57.5%

61%

64.5%

68%

71.5%

75%

 

Under REDUX, the longer an individual stays on active duty the closer the multiplier is to what it would have been under High-36 up to the 30-year point where the multipliers are equal.  As with both the Final Pay and High-36 Plans, the REDUX plan multiplier may exceed 75 or even 100 percent depending on years of service.

 

In precisely the same way as High-36, this multiplier is applied against the average basic pay for the highest 36 months of the individual's basic pay. This typically, though not always, equals the average basic pay for the final three years of service. Also, remember this is basic pay; allowances and special pays do not affect retired pay.

 

Cost of Living Adjustments (COLA)for retired pay are given annually based on the increase in the Consumer Price Index (CPI), a measure of inflation. Under REDUX, the COLA is equal to CPI minus 1%.

 

A feature unique to REDUX is a re-computation of retirement pay at age 62. Two adjustments are made. The first adjusts the multiplier to what it would have been under High-36. For example, a 20-year retiree's new multiplier would become 50%, a 24-year retiree's multiplier would become 60% but a 30-year retiree's would remain 75%. This new multiplier is applied against the individual's original average basic pay for his or her highest 36 months. Then the second adjustment is made. Full CPI for every retirement year is applied to this amount to compute a new base retirement salary. At age 62, the REDUX and High-36 retirement salaries are equal. But, REDUX COLAs for later years will again be set at CPI minus 1%.

 

The $30,000 Career Status Bonus
Those members who elect the CSB/REDUX retirement plan at their 15th year of service receive a $30,000 Career Status Bonus. To receive this bonus, the member must agree to complete a twenty-year active duty career with length-of-service retired pay under the 1986 Military Retirement Reform Act -- 1986 MRRA or REDUX. Contination beyond twenty years is possible, subject to Service personnel management actions. However, the member's commitment with the CSB is only to the 20-year point. The entire $30,000 bonus, or first installment payment for those electing a multi-year payment option, is paid shortly after the member makes the CSB/REDUX election and commits to the 20-years-of-service obligation. (Exact mechanics should be provided by your Service near the point you have 14 and 1/2 years of service.

 

If the member doesn't complete the obligation of the twenty-year career, the member must repay a pro-rated share of the bonus.

 

 



 

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