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Reserve Component Retirement Plans

In 1949, Congress established a Reserve Component (RC) Retirement Plan. Title 10, United States code, provides entitlement to certain members of the RC to retired pay and benefits at age 60. In order to receive retired pay, soldiers must meet minimum requirements.

- A reserve soldier or former reserve soldier must be at least 60 years of age; and

- Have performed at least 20 years of qualifying service computed under the appropriate section of law; and

- Have performed the last 8 years of qualifying service while a member of the active reserve; and

- Must apply for retired pay by submitting an application to the Service in which he completed his qualifying service (the Service assigned to at the time of discharge or transfer to the Retired Reserve)

 

Qualifying Year

A "qualifying year" is a full retirement year during which the soldier earns a minimum of 50 retirement points. In very general terms, a soldier establishes a retirement year ending date (RYE) by entering the Active Reserve. The date soldier enters the Active Reserve becomes his retirement year beginning date (RYB) and ( as long as there is no break in service) his retirement years will be the calendar years beginning with his RYB and ending 1 year later on the calendar day prior his RYB.

 

Point Accumulation

Accumulating 50 retirement points during a retirement year is not too difficult for unit members of the Army National Guard. A unit member who attends all 48 Unit Training Assemblies (UTA) receives 1 point per UTA and 15 points for membership for a total of 63 points. These are called Inactive Duty Training (IDT) points. A soldier may not earn more than 90 IDT points in a calendar year. Active duty days such as Annual Training provide additional retirements points toward the annual total.

 

Computation

In addition to being used to determine if a soldier qualifies for retired pay based on non-regular service, retirement points are also used to determine how much retired pay soldier will receive at age 60. The formula is fairly simple:

Total Creditable Retirement Points

360

The number of years of equivalent service earned by a soldier is reported to the Defense Finance and Accounting Service (DFAS) that process military retirements. Those years are treated in the same fashion that treat years of satisfactory service for retiring active component soldiers.

 

20 Year Letter

In the past, the Services had difficulty with accurately establishing when a member of the RC had completed 20 qualifying years of service. As a result, many soldiers stopped participating when they believed they had completed 20 qualifying years only to discover, much to late (at age 60), that they did not meet the requirements for retired pay. Now each soldier is notified by law, when they complete the number of years of qualifying service required to receive retired pay at age 60. The letter the soldier receives is known as the "Twenty Year Letter."

 

Reserve Component Survivor Benefit Plan

In 1978, Congress established the Survivor Benefit Plan for Reserve Components (RC-SBP). Members of the RC who had met all qualifications for retired pay (excepts they were not yet 60 years of age) were receiving their 20 year letters, but all to frequently, were not subsequently living to be 60 years of age. Those members of the RC who died subsequent to completion of age 20 years of qualifying service, but before entering into actual retired status at age 60 were unable to leave any portions of their retired benefit to their survivors. RC-SBP solved that problem.