2 Formulas for DoD Retirement pay

sinasasin

PEB Forum Regular Member
Registered Member
Good afternoon,

Looking for a sanity check on which DFAS DoD Disability Retirement Formula will be applied.

My baseline understanding is taken directly from DFAS:
https://www.dfas.mil/retiredmilitary/plan/estimate.html
-------------------------------------------
"DISABILITY RETIREMENT
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
Either way, the multiplier is limited to 75 percent by law. 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"
_______________________

I am E-7 100% DoD/100% VA @ 22.5 yrs

So my understanding is that the formula I will have is:
*(Disability % - not to exceed 75%) x (Retired base pay) = Disability Retired Pay Upon retirement

However, I am receiving conflicting information from my Wounded Warrior rep, stating my DoD Disability Retirement pay will be based on the clearly less favorable:
(Years of Service) x (2.5%) x (Retired Base Pay) = Disability Retired Pay

So, according do DFAS the first formula should be applied. My High-3 average × .75 is what should be applied correct?

If I am the one mistaken could someone help me understand why.

Thanks
 

RonG

PEB Forum Regular Member
PEB Forum Veteran
Lifetime Supporter
Registered Member
Good afternoon,

Looking for a sanity check on which DFAS DoD Disability Retirement Formula will be applied.

My baseline understanding is taken directly from DFAS:
https://www.dfas.mil/retiredmilitary/plan/estimate.html
-------------------------------------------
"DISABILITY RETIREMENT
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
Either way, the multiplier is limited to 75 percent by law. 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"
_______________________

I am E-7 100% DoD/100% VA @ 22.5 yrs

So my understanding is that the formula I will have is:
*(Disability % - not to exceed 75%) x (Retired base pay) = Disability Retired Pay Upon retirement

However, I am receiving conflicting information from my Wounded Warrior rep, stating my DoD Disability Retirement pay will be based on the clearly less favorable:
(Years of Service) x (2.5%) x (Retired Base Pay) = Disability Retired Pay

So, according do DFAS the first formula should be applied. My High-3 average × .75 is what should be applied correct?

If I am the one mistaken could someone help me understand w

Thank
Your retired pay will be as shown @ 75%

It will be reduced by the amount of VA compensation.

CRDP, which restores longevity retired pay will restore the longevity portion of retired pay, but any residual retired pay left over from the "reduction" discussed above,
combined with CRDP cannot exceed the longevity portion of retired pay.

So...in answer to your question:
--Your retired pay will be computed at 75%
--Your CRDP will be computed using the 2.5% factor (longevity)

Ron
 

sinasasin

PEB Forum Regular Member
Registered Member
Ron,

Thanks for the reply. I'm glad to hear that that im at least partially correct.

That said, I'm more than a little dense when it comes to math. So no sense in being ashamed to ask "explain it to me like I'm 5"

I can't seem to wrap my mind around the "fuzzy" CRDP math concerning reductions and restorations. In my mind it was Dod pay + VA pay = CRDP...i can't seem to grasp more depth to it than that.

Could you use simple whole numbers to create a clean and clear example, then don't need to be remotely near my anticipated reality. I am just hoping to "get it" conceptionally.

If you or someone else has the time to dummy-proof it for me....a DFAS Angel will earn their wings (haha horns more likely).
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
Hello sinasasin,

Here is an example for a Chapter 61 retiree with 20 years or more active duty:

Example info.

I am E-7 (example high three: 4400)
100% DoD (75% max)
100% VA (example 3200)
22.5 yrs (example active duty years)

Computation for example
.

1. 4400 high three average high three x 0.75 max DoD percentage = 3300 retired pay
2. 3300 retired pay minus 3200 VA comp = 100 residual retired pay
3. 22 years 6 months active duty results in 22.5 x 0.025 = 56.25% longevity multiplier
4. 4400 high three x 0.5625 = 2475 longevity portion of retired pay
5. Since this case has VA comp at 50% or more VA comp rating and the member qualifies for CRDP with 20 or more active duty years, of the 3200 "lost" thru the reduction, 2475 can be restored less the 100 residual retired pay.
6. Amounts paid to CH 61 retiree who also qualifies for a regular retirement:
--VA comp = 3200
--DFAS residual retired pay = 100
--DFAS CRDP 2375 (Total paid by DFAS: 2475)

Ron
 

sinasasin

PEB Forum Regular Member
Registered Member
Hello sinasasin,

Here is an example for a Chapter 61 retiree with 20 years or more active duty:

Example info.

I am E-7 (example high three: 4400)
100% DoD (75% max)
100% VA (example 3200)
22.5 yrs (example active duty years)

Computation for example
.

1. 4400 high three average high three x 0.75 max DoD percentage = 3300 retired pay
2. 3300 retired pay minus 3200 VA comp = 100 residual retired pay
3. 22 years 6 months active duty results in 22.5 x 0.025 = 56.25% longevity multiplier
4. 4400 high three x 0.5625 = 2475 longevity portion of retired pay
5. Since this case has VA comp at 50% or more VA comp rating and the member qualifies for CRDP with 20 or more active duty years, of the 3200 "lost" thru the reduction, 2475 can be restored less the 100 residual retired pay.
6. Amounts paid to CH 61 retiree who also qualifies for a regular retirement:
--VA comp = 3200
--DFAS residual retired pay = 100
--DFAS CRDP 2375 (Total paid by DFAS: 2475)

Ron
Ron,

God Bless....sincerely! Day after day you selflessly devote your time and patience to answering the same repetitive questions from us simple folk.

Mr. Perry, I (everyone) appreciates this forum and I hope it yields a.steady stream of business for your practice. I know you don't comment as often as you once did, but if you still monitor the forum with frequency....Ron deserves like a nice leather Letterman Jacket, or at least a certificate for a kick-ass steak dinner ; )

That said, Ron....may I trouble you one last time. I'm grateful for your answer but would be lying if I said I understood. It is what it is I suppose...can't fight math. So would you mind crunching the actual personal numbers that I do know? (please and thank you)

TOS at official retirement: 22yr 6 months
100% DoD Disability
100% VA Disability
My High-3: $4775.32
My VA pay: $3910.44

What will be my total monthly dollar amount?
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
Hello @sinasasin,

Thank you for your kind words. I enjoy working with veterans.

Estimate.

1. 4775.32 high three average high three x 0.75 max DoD percentage = 3581.49 retired pay
2. 3581.49 retired pay minus 3910.44 VA comp = zero residual retired pay
3. 22 years 6 months active duty results in 22.5 x 0.025 = 56.25% longevity multiplier
4. 4775.32 high three x 0.5625 = 2686.12 longevity portion of retired pay
5. Since this case has VA comp at 50% or more VA comp rating and the member qualifies for CRDP with 20 or more active duty years, of the 3581.49 "lost" thru the reduction, 2686.12 can be restored via CRDP..
6. Amounts paid to CH 61 retiree who also qualifies for a regular retirement:
--VA comp = 3910.44
--DFAS CRDP= 2686.12

Good choice to complete 20 years or more AD.


Ron
 
Last edited:

sinasasin

PEB Forum Regular Member
Registered Member
Hello @sinasasin,

Thank you for your kind words. I enjoy working with veterans.

Estimate.

1. 4775.32 high three average high three x 0.75 max DoD percentage = 3581.49 retired pay
2. 3581.49 retired pay minus 3910.44 VA comp = dero residual retired pay
3. 22 years 6 months active duty results in 22.5 x 0.025 = 56.25% longevity multiplier
4. 4775.32 high three x 0.5625 = 2686.12 longevity portion of retired pay
5. Since this case has VA comp at 50% or more VA comp rating and the member qualifies for CRDP with 20 or more active duty years, of the 3581.49 "lost" thru the reduction, 2686.12 can be restored via CRDP..
6. Amounts paid to CH 61 retiree who also qualifies for a regular retirement:
--VA comp = 3910.44
--DFAS CRDP= 2686.12

Good choice to complete 20 years or more AD.


Ron
Ron,

You are most welcome, you provide a service (with patience and promptness) that is not found elsewhere. YOU Rock! Thank you.

While these numbers are lower than I anticipated, I am grateful to have served as long as I have...and would do it all over again.

Be well Ron, I always read your posts and intend to follow this forum well after my official retirement. I hope to find a meaningful way to pay forward all that this community has give to me.

- God Bless
(...or whatever personal inspiration you ascribe to, haha)
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
This might explain the "lower numbers":

Waived retired pay in excess of the longevity portion of retired pay cannot be restored by CRDP.

You will receive CRDP in line with what I receive as a regular retiree. My CRDP (when I chose it over CRSC) is around $2850; that is the longevity computation of my longevity retired pay with COLAs included from 1991. I did not have a disability retirement.

Ron
 

sinasasin

PEB Forum Regular Member
Registered Member
This might explain the "lower numbers":

Waived retired pay in excess of the longevity portion of retired pay cannot be restored by CRDP.

You will receive CRDP in line with what I receive as a regular retiree. My CRDP (when I chose it over CRSC) is around $2850; that is the longevity computation of my longevity retired pay with COLAs included from 1991. I did not have a disability retirement.

Ron
Excellent and very insightful follow-up information Ron. I will mentally factor that input as part of the rationale of my current reality

I may (should) eventually be approved for CRSC myself, but figured I should just work with the facts on hand. Until that day, I will continue to monitor the forum (typically daily) and hope that you continue to dispense your wisdom when I make am prepared to make my "CRSC" post.

TYFYS (Thank you for your service)
 

RonG

PEB Forum Regular Member
PEB Forum Veteran
Lifetime Supporter
Registered Member
Rule of thumb recommendations for an individual who qualifies for a regular retirement.

--Approved CRSC percentage is the same as the VA comp percentage = Choose CRSC over CRDP
--Approved CRSC is less than the VA comp percentage = Choose CRDP over CRSC (otherwise you will lose money)

Ron
 

sinasasin

PEB Forum Regular Member
Registered Member
Rule of thumb recommendations for an individual who qualifies for a regular retirement.

--Approved CRSC percentage is the same as the VA comp percentage = Choose CRSC over CRDP
--Approved CRSC is less than the VA comp percentage = Choose CRDP over CRSC (otherwise you will lose money)

Ron
.....The Hero We Need

Solid Advice.......Standard Issue
 

oldvet

PEB Forum Regular Member
Registered Member
Hello RonG,
I am still confused about CH61 and CSB-REDUX. Can you help me get an idea of what my pay will be?

I am O4 (example high three: $8035)
20% DoD
100% VA
20.0 Active Duty years (upon expiration of COAD) - eligible for CRDP
CH61 Retirement upon expiration of COAD
I took $30K CSB-Redux bonus in 2016
Not eligible for CRSC

Thank you
 

RonG

PEB Forum Regular Member
PEB Forum Veteran
Lifetime Supporter
Registered Member
Hello oldvet,

1. What is the amount of your VA compensation and the categories of dependents by age (except spouse)? Please mention any SMC you receive.

2. Both your gross retired pay and CRDP will use the REDUX formula.

3. Normally 20 years active duty = 50% multiplier
With REDUX, the multiplier is reduced by 1% for each year less than 30. 50% minus 10% = 40% REDUX multiplier in your case

4. The combination of residual retired pay plus CRDP using REDUX cannot exceed the longevity portion of retired pay. Your case is a bit different than most seen here since there is not a DoD disability retirement percentage involved (i.e., must be 30% or more).

5. Since all the retired pay and CRDP are computed in your case using the REDUX formula, the VA compensation amount will have little impact on the final result since CRDP is retired pay too.

6. $8035 high three x 0.40 = 3214 gross retired pay (and CRDP) via REDUX. You also will receive all your VA compensation.


Ron
 

oldvet

PEB Forum Regular Member
Registered Member
Ron G,
VA compensation (100% no dependents) = $3106 and no SMC. So I shouldn't have to deal with any type of offset?

Thanks
 

RonG

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PEB Forum Veteran
Lifetime Supporter
Registered Member
Ron G,
VA compensation (100% no dependents) = $3106 and no SMC. So I shouldn't have to deal with any type of offset?

Thanks
You will...but it will be non-detectable. CRDP restores waived (offset) retired pay. It is shown only on page two of the DFAS RAS as a remark. It will be part of or all of the gross retired pay on page one. You might see some other odd info on page one due to REDUX, but the bottom line is that you will receive all your retired pay computed under REDUX and all your VA comp. If you had DoD disability pay that exceeded the longevity amount computed via REDUX, the presentation would be more complex.

Please share your RAS (redacted) once you receive it. They are not as common as the regular offset-type RAS.

Ron
 
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