The reduced multiplier. Section 1409(b)(4)(A) works by substitution rather than by writing a new formula. For a full TSP member, the general 2½ percent per year of creditable service becomes 2, the 75 percent figure that applies to a member retiring with more than 30 years becomes 60 percent, and the 2½ percent add-on for years beyond 30 becomes 2. So a 20-year career produces a 40 percent multiplier rather than 50 percent, a 20 percent reduction in the pension, and long careers are compressed at the top as well.
The opt-in is closed, and this is the fact most stale summaries get wrong. Section 1409(b)(4)(B) allowed a member serving on December 31, 2017 who had served fewer than 12 years as of that date to elect the reduced multipliers in exchange for Thrift Savings Plan contributions. Subparagraph (C)(i) then limited the election to "the period that begins on January 1, 2018, and ends on December 31, 2018", with four narrow carve-outs: a hardship extension at the Secretary's discretion, 30 days after reentry for someone returning from a break in service during the window, a delayed window for cadets, midshipmen and Senior Reserve Officers' Training Corps members on commissioning, and a delayed window for reserve members not in an active status. The last two are keyed to an event rather than a date, so a small number of people can still face the election: clause (iv) gives someone who was a cadet, midshipman or Senior Reserve Officers' Training Corps member during 2018 until 30 days after commissioning, and clause (v) gives a reserve member who was in an inactive status during 2018 until 30 days after moving to an active status or active duty. For everyone else the window shut at the end of 2018, so a summary written in the present tense as though a serving member can simply "choose BRS" is describing something that no longer exists.
The government contributions, and where the 5 percent actually comes from. Section 8440e(e)(2) of Title 5 caps what the Secretary concerned may contribute for a full TSP member at "5 percent of the member's basic pay for such pay period", and adds that the contribution is "instead of, and not in addition to" amounts contributable under section 8432(c). Opening 8432(c) shows the two components. Paragraph (c)(1)(A) is the automatic contribution, "1 percent of the basic pay" of the member, made whether or not the member contributes anything. Paragraph (c)(2)(B) is the match, and it is tiered: the agency contributes the portion of the member's own contribution that does not exceed 3 percent of basic pay, plus one half of the portion that exceeds 3 percent but does not exceed 5 percent. One percent automatic, three percent matched dollar for dollar, and one percent from half-matching the fourth and fifth points, adds to the 5 percent ceiling.
Timing and vesting are separate questions, and both bite. Section 8440e(e)(3) sets different start dates. Automatic contributions begin no earlier than 60 days after the member first enters service; matching contributions begin no earlier than two years and one day after entry. Both end when the member completes 26 years of service. Vesting then runs the other way from what most people assume. Section 8432(g)(1) makes all contributions "fully nonforfeitable when made", with an exception at (g)(2) for the automatic contribution under (c)(1), which is forfeited if a member of the uniformed services separates before completing two years of service. So the matching money is the member's from the moment it lands, and the automatic 1 percent is the piece with a vesting cliff.
Continuation pay. Section 356 of Title 37 is captioned "Continuation pay: full TSP members with 7 to 12 years of service", and secondary summaries frequently say eight years. The statute says seven. Subsection (a) requires the member to have completed not less than 7 and not more than 12 years of service and to agree to serve at least 3 more. Subsection (b) sets the payment as a multiple of monthly basic pay: not less than 2.5 times monthly basic pay for a member of a regular component, and not less than 0.5 times for a reserve-component member not on active Guard and Reserve duty. The maximum is monthly basic pay at 12 years of service multiplied by 2.5, plus, at the Secretary's discretion, that same monthly figure multiplied by up to 13 further months. A member may take it as a lump sum or in as many as four payments.
The lump-sum election at retirement. Section 1415 of Title 10 lets an eligible person, meaning someone in the modernized system who is not retiring under the disability provisions of chapter 61, elect to receive either 50 percent or 25 percent of their retired pay for the years between retirement and Social Security full retirement age as a discounted lump sum. In exchange they receive 50 percent or 75 percent respectively of the monthly amount over that stretch, and under 1415(c)(2) their full retired pay is restored, recomputed as if the annual cost-of-living adjustments had applied throughout, from the first month after they reach retirement age. The election must be made at least 90 days before retirement. The part to read carefully is 1415(b)(2)(B): the discount is "an appropriate percentage determined by the Secretary" using "average personal discount rates" for military personnel, which is an administrative figure rather than a market rate. A member weighing the offer is being asked to accept a discount whose size is set by the payer.
