Received Retirement Orders | Not Clear About Final Pay

[soonami]

Hello, I just received my retirement orders after the MEB/PEB and I’m hoping to receive some clarification (backed up by policy/regulation) regarding what my retirement pay will be. Here’s my situation:



-Active Duty Army since 2004 (no break in service)

-DD214 states: 20 years, 2 months, 12 days | Type of separation – Retirement | Narrative reason for separation – Disability, combat related

-100% DOD rating | 100% P&T VA rating

-PDRL

-

Defense Finance and Accounting Service > RetiredMilitary > disability > disability

states the following: “If your disability is found to be permanent and is rated at 30 percent or greater, or you have 20 or more years of service, you will be placed on the Permanent Disability Retired List (PDRL). Your retired pay will be computed using one of two methods.

Your disability percentage, referred to as Method A.

Your years of active service, referred to as Method B.

Your pay will be computed based on whichever method is more beneficial for you.”

-

Disability Retirement

states the following: “The basic retirement formula is:

Retired Pay Base X Multiplier %

The retired pay base for a qualified disability retirement is determined under either the final pay method or the high-36 month method depending upon when they first entered military service. See Retirement tab for details. The multiplier percentage is at the option of the member who may chose either the percentage of disability assigned or the years of creditable service times 2½%. In either case, the multiplier is limited to 75% by law. In the case of a member on the TDRL, the minimum percentage is 50% while on the TDRL.”



I know there’s a lot of information above. Apologies in advance but wanted to provide all info/context. From what I can tell, I guess my questions are:

1.) Will my retirement pay be categorized as “disability” or “high-36/length of service” (I did reach 20+ actual years as I was on active duty the entire time)?

2.) Because I am exiting under MEB/PEB and not the traditional retirement route, will I be receiving 50% (20 active years TIS) of my base pay or up to 75% of my base pay considering my DOD percentage = 100 (apparently there’s a law that states it can’t exceed 75%)?

3.) Because my DD214 states “Narrative reason for separation – Disability, combat related”, does this mean my pension will be completely tax free?

4.) Is there any scenario where I will not be eligible for CRDP?; again, I made it past 20 “good years” but want to be sure that if I do in fact receive over 50% of my base pay (20 active years TIS), that it won’t mean I have to forfeit CRDP

5.) It’s my understanding that with my situation, CRSC won’t be applicable to me because even if I applied, it would not be smart to opt into because the financial compensation would be less than CRDP (if I am in fact eligible for CRDP); is this a correct assumption?



Any clarification on the above will be appreciated. Thank you!

 

[CrustyGrunt]

1.) Your retirement is a disability retirement. (According to your DD214)

2.) Your pay will be calculated at 75%, however it will be reduced to your 50% longevity amount. Due to CRDP eligible.

3.) If combat related your DoD pension will not be taxable.

4.) You are 100% eligible for CRDP. That will not change.

5.) CRSC will not change your pay since your disability is combat related and you have maxed out retirement pay. If your disability was not combat related the only way CRSC would be of benefit for someone that is 100% VA and DoD is to get 100% approved CRSC.

Hope that clears things up Battle Buddy!

 

[2023Sailor]

1.) Your retirement is a disability retirement. (According to your DD214)

2.) Your pay will be calculated at 75%, however it will be reduced to your 50% longevity amount. Due to CRDP eligible.

3.) If combat related your DoD pension will not be taxable.

4.) You are 100% eligible for CRDP. That will not change.

5.) CRSC will not change your pay since your disability is combat related and you have maxed out retirement pay. If your disability was not combat related the only way CRSC would be of benefit for someone that is 100% VA and DoD is to get 100% approved CRSC.

Hope that clears things up Battle Buddy!

I just received findings of PDRL 30% @ 5 years 8 months.​

I am having troubles trying to calculate the disability retirement or at least know what my options (if I actually have any) are and if this thought process is correct.

Here is what I found:

1. DFAS LINK​

DISABILITY RETIREMENT​

Retired Pay Base​

x Service Percent Multiplier​

= Gross Retired Pay​

​

The multiplier for disability retired pay is either:​

- 2.5 percent for each year of service, or​

- disability percentage assigned by the service at the time you retire​

​

The multiplier is limited to 75 percent by law using the disability percentage. The multiplier for years of service is no longer capped at 75%, unless your retirement date is prior to 1/1/2007. If you are on the Temporary Disability Retired List, the minimum multiplier is 50 percent while on the TDRL.

DFAS uses the method that results in the largest payment. But if you’d like to choose the other method, please send DFAS your request in writing.

2. Military Compensation Website LINK​

The basic retirement formula is:​

Retired Pay Base X Multiplier %

The retired pay base for a qualified disability retirement is determined under either the final pay method or the high-36 month method depending upon when they first entered military service. See Retirement tab for details.

The multiplier percentage is at the option of the member who may chose either the percentage of disability assigned or the years of creditable service times 2½%. In either case, the multiplier is limited to 75% by law.

Conclusion​

By these two methods, here are the calculations:

2.5 x 5 (full years) x 3365.70 = $420.71

30% disability rating x 3365.70 = $1009.71

Obviously a big difference, here are my questions: As stated in #2 a member may choose either the percentage of disability assigned or the years of creditable service times 2.5%. How/where does a member make that decision regarding the multiplier? Where does a member find their retired base pay method?

Thanks in advance!

 

[Provis]

I just received findings of PDRL 30% @ 5 years 8 months.​

I am having troubles trying to calculate the disability retirement or at least know what my options (if I actually have any) are and if this thought process is correct.

Here is what I found:

1. DFAS LINK​

DISABILITY RETIREMENT​

Retired Pay Base​

x Service Percent Multiplier​

= Gross Retired Pay​

​

The multiplier for disability retired pay is either:​

- 2.5 percent for each year of service, or​

- disability percentage assigned by the service at the time you retire​

​

The multiplier is limited to 75 percent by law using the disability percentage. The multiplier for years of service is no longer capped at 75%, unless your retirement date is prior to 1/1/2007. If you are on the Temporary Disability Retired List, the minimum multiplier is 50 percent while on the TDRL.

DFAS uses the method that results in the largest payment. But if you’d like to choose the other method, please send DFAS your request in writing.

2. Military Compensation Website LINK​

The basic retirement formula is:​

Retired Pay Base X Multiplier %

The retired pay base for a qualified disability retirement is determined under either the final pay method or the high-36 month method depending upon when they first entered military service. See Retirement tab for details.

The multiplier percentage is at the option of the member who may chose either the percentage of disability assigned or the years of creditable service times 2½%. In either case, the multiplier is limited to 75% by law.

Conclusion​

By these two methods, here are the calculations:

2.5 x 5 (full years) x 3365.70 = $420.71

30% disability rating x 3365.70 = $1009.71

Obviously a big difference, here are my questions: As stated in #2 a member may choose either the percentage of disability assigned or the years of creditable service times 2.5%. How/where does a member make that decision regarding the multiplier? Where does a member find their retired base pay method?

Thanks in advance!

See my other response. Both numbers probably won't matter.

 

[CrustyGrunt]

I just received findings of PDRL 30% @ 5 years 8 months.​

I am having troubles trying to calculate the disability retirement or at least know what my options (if I actually have any) are and if this thought process is correct.

Here is what I found:

1. DFAS LINK​

DISABILITY RETIREMENT​

Retired Pay Base​

x Service Percent Multiplier​

= Gross Retired Pay​

​

The multiplier for disability retired pay is either:​

- 2.5 percent for each year of service, or​

- disability percentage assigned by the service at the time you retire​

​

The multiplier is limited to 75 percent by law using the disability percentage. The multiplier for years of service is no longer capped at 75%, unless your retirement date is prior to 1/1/2007. If you are on the Temporary Disability Retired List, the minimum multiplier is 50 percent while on the TDRL.

DFAS uses the method that results in the largest payment. But if you’d like to choose the other method, please send DFAS your request in writing.

2. Military Compensation Website LINK​

The basic retirement formula is:​

Retired Pay Base X Multiplier %

The retired pay base for a qualified disability retirement is determined under either the final pay method or the high-36 month method depending upon when they first entered military service. See Retirement tab for details.

The multiplier percentage is at the option of the member who may chose either the percentage of disability assigned or the years of creditable service times 2½%. In either case, the multiplier is limited to 75% by law.

Conclusion​

By these two methods, here are the calculations:

2.5 x 5 (full years) x 3365.70 = $420.71

30% disability rating x 3365.70 = $1009.71

Obviously a big difference, here are my questions: As stated in #2 a member may choose either the percentage of disability assigned or the years of creditable service times 2.5%. How/where does a member make that decision regarding the multiplier? Where does a member find their retired base pay method?

Thanks in advance!

Agree with @Provis battle buddy, you don’t need to worry about those calculations because they will be waived in order for you to receive your tax free VA compensation. My comment you refer to is for a service member that has 20 or more years of active federal service, and qualify for two types of retirement.

 

[Mike_Honcho]

1.) Your retirement is a disability retirement. (According to your DD214)

2.) Your pay will be calculated at 75%, however it will be reduced to your 50% longevity amount. Due to CRDP eligible.

3.) If combat related your DoD pension will not be taxable.

4.) You are 100% eligible for CRDP. That will not change.

5.) CRSC will not change your pay since your disability is combat related and you have maxed out retirement pay. If your disability was not combat related the only way CRSC would be of benefit for someone that is 100% VA and DoD is to get 100% approved CRSC.

Hope that clears things up Battle Buddy!

I am in a similar situation as the OP. I consider myself to be somewhat intelligent. This has been the hardest thing for me to comprehend about my situation. Can you break this down for me because you seem to have a grasp on it?

These are rough numbers for myself:

Years of Service (YoS): 21.5 - literally all active of some form - points 7850
Base pay: $5400
Department of Defense (DoD): 90%
Veterans Affairs (VA): 100%

Can you compute this so I have an idea of what the numbers look like? Seeing the numbers and an explanation would help me out a lot. I apologize in advance for any potential ignorance on my part.

 

[CrustyGrunt]

I am in a similar situation as the OP. I consider myself to be somewhat intelligent. This has been the hardest thing for me to comprehend about my situation. Can you break this down for me because you seem to have a grasp on it?

These are rough numbers for myself:

Years of Service (YoS): 21.5 - literally all active of some form - points 7850
Base pay: $5400
Department of Defense (DoD): 90%
Veterans Affairs (VA): 100%

Can you compute this so I have an idea of what the numbers look like? Seeing the numbers and an explanation would help me out a lot. I apologize in advance for any potential ignorance on my part.

I don’t do calculations, that’s @RonG lane. At 21.5 all active years you will automatically qualify for CRDP. With CRDP you will receive your VA compensation which is tax free and will receive all of your earned DoD pension for 21.5 years. I was in the same situation. I qualified for two retirements (regular and disability). I went the disability retirement route due. At 21.5 years of active service there isn’t any difference in pay. However, with a disability retirement your Tricare rate will be locked for life. CRSC will not be of benefit for you, yes it’s tax exempt, but like me the only way CRSC would benefit me is if I was approved for 100%. You are maxed out as far as your pay. If you go through previous threads about calculating pay, @RonG requires more info before he can do a pay calculation. Hope this helps battle buddy!

 

[Provis]

I am in a similar situation as the OP. I consider myself to be somewhat intelligent. This has been the hardest thing for me to comprehend about my situation. Can you break this down for me because you seem to have a grasp on it?

These are rough numbers for myself:

Years of Service (YoS): 21.5 - literally all active of some form - points 7850
Base pay: $5400
Department of Defense (DoD): 90%
Veterans Affairs (VA): 100%

Can you compute this so I have an idea of what the numbers look like? Seeing the numbers and an explanation would help me out a lot. I apologize in advance for any potential ignorance on my part.

Take points and divide by 360. In your case that = 21.8 years. 21.8 x 2.5% (assuming you are not new blended system. If so its 2%) That equals 54.5% of high 36 pay. High 36 is computed by taking the last 36 months of base pay and then adding it together and then dividing that total by 36. Lets say its $5,000 for this example. $5,000 x 54.5% = $2,725. That would be your retirement. VA is seperate. Take that amount + VA compensation which at 100% is $3,737 minimum if you are single. Will be more if you have dependents and or SMC's . So in this example you would $2,725 from the military and $3,737 from the VA each month.

To be more exact calculate your high 36 and figure out VA compensation by looking it up online based on dependents and adding in any extras like SMC or aid and attendance.

 

[Mike_Honcho]

Take points and divide by 360. In your case that = 21.8 years. 21.8 x 2.5% (assuming you are not new blended system. If so its 2%) That equals 54.5% of high 36 pay. High 36 is computed by taking the last 36 months of base pay and then adding it together and then dividing that total by 36. Lets say its $5,000 for this example. $5,000 x 54.5% = $2,725. That would be your retirement. VA is seperate. Take that amount + VA compensation which at 100% is $3,737 minimum if you are single. Will be more if you have dependents and or SMC's . So in this example you would $2,725 from the military and $3,737 from the VA each month.

To be more exact calculate your high 36 and figure out VA compensation by looking it up online based on dependents and adding in any extras like SMC or aid and attendance.

Ok that all makes sense… but why would it be longevity over the DOD rating. What law covers this? I just want to be able to read it. I guess that’s what doesn’t make sense, especially since DFAS says other wise. I have messaged them and they say Method A is typically what they see… so I am confused. I let them know my number of years and points and they still say Method A.

I just want to dread the longevity thing. Do you know where it is written?

Thanks in advance I appreciate your help.

 

[Provis]

DOD % doesn't matter when it comes to max compensation by law. You can only get the combination total equal to your longevity + VA compensation. The only exception is if the DOD% for a chapter 61 retirement is higher than the combination of your longevity + VA compensation. This only happens in rare cases with high ranking officers found unfit duty related in the Reserves/Guard. That is because their longeivty can be very low but may have 20+ years of service and an 05 for example.

 

[chaplaincharlie]

I would add CRSC eligible means you have to apply to your service to get CRSC. Eligible does not equate to automatically paid CRSC.

 

[Cainfopro]

Anyone know the DFAS reference or Guidance for PDRL Method A and Method B? I have 41+ years active duty and being told to waive my MEB/PEB cause they will cap me at 75% or 3O years!
I agree Method A cap is 30 years 75%, but Method B “ longevity” shows no cap. DFAS POC is telling my attorney both are capped at 30 years which I believe is false! Looking for DFAS reference or guidance. V/R CAPT Pat

 

[Provis]

Anyone know the DFAS reference or Guidance for PDRL Method A and Method B? I have 41+ years active duty and being told to waive my MEB/PEB cause they will cap me at 75% or 3O years!
I agree Method A cap is 30 years 75%, but Method B “ longevity” shows no cap. DFAS POC is telling my attorney both are capped at 30 years which I believe is false! Looking for DFAS reference or guidance. V/R CAPT Pat

There is no cap for longevity and that is why they are stating to waive MEB/PEB. There is no benefit for you to get out via IDES. DOD cap for IDES is 75%. Since your longevity pension is higher there is no need to do go through all of it. Instead just retire. There used to be a cap on % for longevity retirement 30 years and at 75% but that cap was removed in the 2007 National Defense Authorization Act.

 

[Cainfopro]

There is no cap for longevity and that is why they are stating to waive MEB/PEB. There is no benefit for you to get out via IDES. DOD cap for IDES is 75%. Since your longevity pension is higher there is no need to do go through all of it. Instead just retire. There used to be a cap on % for longevity retirement 30 years and at 75% but that cap was removed in the 2007 National Defense Authorization Act.

Understand your recommendation. However, I want my DD-214 to reflect disability retirement pay for multiple reasons. Wonder why my IDES appointed Attorney thinks PDRL Method B LONGEVITY is capped at 30 years?? I called DFAS today and they confirmed NO CAP on Method B just use the multiplier from your years of service x base pay = Method B

 

[Provis]

Understand your recommendation. However, I want my DD-214 to reflect disability retirement pay for multiple reasons. Wonder why my IDES appointed Attorney thinks PDRL Method B LONGEVITY is capped at 30 years?? I called DFAS today and they confirmed NO CAP on Method B just use the multiplier from your years of service x base pay = Method B

Can't do that unless medically retired. What is the benefit? I am not understanding why anyone would want to go through IDES if there is no financial gain. You can't even achieve a tax exempt pension since even a combat related unfitting condition would be less than your longevity pension.

 

[Cainfopro]

Can't do that unless medically retired. What is the benefit? I am not understanding why anyone would want to go through IDES if there is no financial gain. You can't even achieve a tax exempt pension since even a combat related unfitting condition would be less than your longevity pension.

I waiting on MEB/PEB decision and 99.99% sure will be found unfit to continue active duty. VA Rating came back 100%. A DD-214 reflecting Medical Retirement has additional benefits for me. Yes some disability is combat related. DFAS PDRL Method B - Longevity calculation will be ~105% X MAX O6 high three base pay and my VA will already be calculated so should not take long for my concurrent tax free maximum VA disability to kick in.
Thanks for your comment.

 

[Cainfopro]

I waiting on MEB/PEB decision and 99.99% sure will be found unfit to continue active duty. VA Rating came back 100%. A DD-214 reflecting Medical Retirement has additional benefits for me. Yes some disability is combat related. DFAS PDRL Method B - Longevity calculation will be ~105% X MAX O6 high three base pay and my VA will already be calculated so should not take long for my concurrent tax free maximum VA disability to kick in.
Thanks for your comment.

* I’m waiting

 

[Provis]

I waiting on MEB/PEB decision and 99.99% sure will be found unfit to continue active duty. VA Rating came back 100%. A DD-214 reflecting Medical Retirement has additional benefits for me. Yes some disability is combat related. DFAS PDRL Method B - Longevity calculation will be ~105% X MAX O6 high three base pay and my VA will already be calculated so should not take long for my concurrent tax free maximum VA disability to kick in.
Thanks for your comment.

There is no benefit in your case for medically retiring. See DFAS Link: Defense Finance and Accounting Service > RetiredMilitary > manage > taxes > isittaxable

See this Section and notice bold letters.

TDRL/PDRL Exemption: If you retired under a disability law (Temporary Disability Retirement List or Permanent Disability Retirement List), your retired pay will be fully non-taxable if your pay is calculated based upon your military (not VA) disability percentage and you meet one of the following conditions:

• You were in the military or under a contractual obligation to join the military on September 24, 1975, or
• Your military disability rating is combat-related

The welcome letter you received from DFAS when you first retired indicates whether your pay is computed using your military percentage of disability or your years of service.

As I said before you have no way to get your pension exempt from taxes if your longevity is used for calculations instead of DOD percentage for a chapter 61 retirement.

 

[Cainfopro]

There is no benefit in your case for medically retiring. See DFAS Link: Defense Finance and Accounting Service > RetiredMilitary > manage > taxes > isittaxable

See this Section and notice bold letters.

TDRL/PDRL Exemption: If you retired under a disability law (Temporary Disability Retirement List or Permanent Disability Retirement List), your retired pay will be fully non-taxable if your pay is calculated based upon your military (not VA) disability percentage and you meet one of the following conditions:

• You were in the military or under a contractual obligation to join the military on September 24, 1975, or
• Your military disability rating is combat-related

The welcome letter you received from DFAS when you first retired indicates whether your pay is computed using your military percentage of disability or your years of service.

As I said before you have no way to get your pension exempt from taxes if your longevity is used for calculations instead of DOD percentage for a chapter 61 retirement.

 

[Cainfopro]

I’m confused by your post??
PDRL Method B uses longevity and it’s still PDRL, DFAS uses Method A “disability” and Method B “longevity” and pays the member the amount which is highest. Both are still PDRL “Disability Retirement” pay. Method B is not regular retirement all of a sudden because DFAS used the PDRL pay calculation method.

If you are correct, please send the guidance that states if a member elects PDRL Method B it is no longer treated as PDRL pay but regular pay.

If you are correct. DFAS policy punishes members with over 30 years of service by erasing all years of service over 30 years, in my case would eliminate “12” years because I had a medical condition and had to do IDES. Seems illegal and unethical if you are correct.