BLUF: This a long post and DFAS uses DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 3 "Gross Pay Computation" to calculate your retired pay, disability pay, what CRSC pay is calculated from, and COLA increases.
Over the holiday break, DFAS sent me a CRSC Statement that showed the COLA increase and how they actually calculated my CRSC. When I got approved for CRSC, i never formally received any paperwork from DFAS regarding my pay. Initially when I was medically retired, DFAS sent me a Retired and Annuity Pay letter welcoming me to the Retired Roll of the US Army. Part of the paperwork included a "Summary of Retired Pay Account" which highlighted things like:
1. Retired Pay Rank: E#/O#/W#
2. Percentage of Disability: ##%
3. Service for Basic Pay: XX Years, XX Months, XX Days
4.Jargon about joining after 7 September 1980 which computes monthly pay as High 3, etc.
5. Service for Percent: XX Years, XX Months, XX Days
The biggest thing was Method A and Method B.
"In accordance with 10 USC 1401, you are entitled to receive
retired pay computed using your Percentage of Disability
(Method A) or, using your Years of Active Service (Method B)"
This is how most people who are chapter 61 see how DFAS calculates our pay. One of the things that stuck out to me was Method B percent multiplier was less than what I calculated as a Reservists using my points. See below under Method B for more info.
Now to the CRSC statement I received. This statement also included the Method A and Method B but it included verbiage that made more sense on why my calculations didn't match what DFAS showed me.
Method A.
Excerpt from the statement i got regarding Method A:
"Multiply your military (not VA) disability rating (XX%) by $####.## (0.xx times $####.## equals $####.##). For pay received after September 30, 1983, drop cents from the final figure (since your retirement date is after September 30, 1983, the Method A gross pay amount equals $####)."
This Bolded sentence made me go find the regulations regarding this verbiage since its why the retired pay is a whole dollar. The cents aren't rounded, its completely drop from the final figure.
In comes DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 3 "Gross Pay Computation", Paragraph 2.9 Rounding Retired Pay.
"Under P.L. 98-94, the 1984 DoD Authorization Act, round the monthly retired or retainer pay entitlement as initially computed and as subsequently adjusted.
2.9.1. Effective October 1, 1983, the initial computation of gross retired pay, if not a multiple of $1, round down to the next lower multiple of $1. Make all further reductions, deductions, withholdings, and allotments from this rounded figure. When retired pay is subsequently increased under 10 U.S.C. § 1401a by cost-of-living adjustment (COLA), the retired or retainer pay, if not a multiple of $1, is rounded down to the next lower multiple of $1."
This made total sense when i calculated my COLA increase and wonder why I lost 0.93 cents and it was rounded down instead of up.
Method B.
This is how most of the people on here who do longevity pay calculations for CRSC estimate get the numbers. However, this will show a more accurate number that DFAS actually uses.
I remember when I was active duty and people told me that only full months are credited. I never paid to much attention to this minute detail through the years after i left AD and joined the reserves. I never remember it but now i find that it really does the Reserves/National Guards/M-day service members a disservice.
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 3 "Gross Pay Computation", Paragraph 2.8 Service Credit Rounding of Months.
"2.8.3. A member who became entitled to retired or retainer pay on or after October 1, 1983, receives credit for each full month served. Disregard less than full months. See Table 3-4."
According to DFAS:
To get the multiplier, take the number calculated from above and multiply by 2.5.
How I've been calculating longevity using points:
Example :
3321 / 360 = 9.225 x 2.5 = 23.0625 or 23.06% service percent multiplier.
High 3 = 6,012.53 x 23.06% = 1,386.49 longevity pay.
This is a close short paper math calculation however for someone like me who likes to figure out the real math, its wrong and usually higher number as long as the points are correct.
Excerpt from the CRSC Statement paperwork i got regarding Method B. I will be using the example points above "3321".
3321 = 9 years, 2 months, 21 days
We drop the days as regulations chapter 3 para 2.8 says disregards less than full months. Which screws with M-Day SM as 21 points roughly 5 drill weekends essentially. In this example that's 5 months of drill that has no bearing on the final retirement pay. Of course it adds up into the big numbers, and ill go more into that further below.
Using the example Service Percent above into excerpt from CRSC document.
"a. Drop the days from your Service for Percent (9 years and 2 months), then fractionalize the months by dividing by 12 (2 divided by 12 equals 0.166). Round to two decimal places. The
result (9 years and 2 months, or 9.17) is your Service for Percent.
b. Because you are entitled to 2.5% of your High 36/High 3 base amount for each creditable year of service, multiply the Service for Percent by .025 (9.17 times .025 equals 0.22925). Round to
four decimal places. The result is your Percent Multiplier.
c. Multiply the Percent Multiplier (0.2293) by $6012.53 to obtain your initial monthly gross pay amount. For pay received after September 30, 1983, drop cents from the final figure (since your
retirement date is after September 30, 1983, the Method B initial monthly gross pay equals $1,378.00."
Using the quick math in initial example the longevity we calculated was 1,386.49, using the actual math that DFAS uses, its 1378. Its combination of paragraph 2.8 and 2.9 stated above from vol 7B.
That's a loss of 8.49 per month or 101.88 a year as the 21 days that is disregarded.
This is why I said this does the M-Day SMs a disservice.
Time after time in the reserves I always heard old timers say, "I received my 20 yr letter and can retire but I'm drilling for more points for better retirement pay". This loss of days could save people who is ready for retirement just retire and not waste more time drilling for more points. M-Day SM needs to look at their retirement points and calculate it to be divisible by 30. Any none full numbers are disregarded. Unless those next few drill months will make it be fully divisible by 30, then its not going to have a bearing on your retire pay.
Example from above at 21 days, SM needs 3 drill weekends to make it a full 30, in this scenario, worth it to go to the 3 day drills.
9 yrs 3 months - 23.13% x 6012.53 = 1,390 ( $12 more a month or 144 a year).
The caveat to it is, the longer you drill, the higher your High 3 will be but pretty minor that you should ask yourself is it worth the headache to continue to show up to drill? My last unit was ate up and I was ready to just stop coming. Granted I was the grumpy warrant but still, when your time is done, you kinda know its time to hang up the uniform. Being this is the PEB forums, and we cannot control when we retire, at least for reservist, you have an idea and can request to RST and stop showing up to drill if the points will not make sense. Maybe that only works for Warrants? who knows
TLDR: These rounding downs to nearest dollar and disregarding less than full months sucks.
I've attached Table 3-4 (Traditional) and 3-5 (BRS) from Vol7B that shows service percentage multiplier conversion.
Over the holiday break, DFAS sent me a CRSC Statement that showed the COLA increase and how they actually calculated my CRSC. When I got approved for CRSC, i never formally received any paperwork from DFAS regarding my pay. Initially when I was medically retired, DFAS sent me a Retired and Annuity Pay letter welcoming me to the Retired Roll of the US Army. Part of the paperwork included a "Summary of Retired Pay Account" which highlighted things like:
1. Retired Pay Rank: E#/O#/W#
2. Percentage of Disability: ##%
3. Service for Basic Pay: XX Years, XX Months, XX Days
4.Jargon about joining after 7 September 1980 which computes monthly pay as High 3, etc.
5. Service for Percent: XX Years, XX Months, XX Days
The biggest thing was Method A and Method B.
"In accordance with 10 USC 1401, you are entitled to receive
retired pay computed using your Percentage of Disability
(Method A) or, using your Years of Active Service (Method B)"
This is how most people who are chapter 61 see how DFAS calculates our pay. One of the things that stuck out to me was Method B percent multiplier was less than what I calculated as a Reservists using my points. See below under Method B for more info.
Now to the CRSC statement I received. This statement also included the Method A and Method B but it included verbiage that made more sense on why my calculations didn't match what DFAS showed me.
Method A.
Excerpt from the statement i got regarding Method A:
"Multiply your military (not VA) disability rating (XX%) by $####.## (0.xx times $####.## equals $####.##). For pay received after September 30, 1983, drop cents from the final figure (since your retirement date is after September 30, 1983, the Method A gross pay amount equals $####)."
This Bolded sentence made me go find the regulations regarding this verbiage since its why the retired pay is a whole dollar. The cents aren't rounded, its completely drop from the final figure.
In comes DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 3 "Gross Pay Computation", Paragraph 2.9 Rounding Retired Pay.
"Under P.L. 98-94, the 1984 DoD Authorization Act, round the monthly retired or retainer pay entitlement as initially computed and as subsequently adjusted.
2.9.1. Effective October 1, 1983, the initial computation of gross retired pay, if not a multiple of $1, round down to the next lower multiple of $1. Make all further reductions, deductions, withholdings, and allotments from this rounded figure. When retired pay is subsequently increased under 10 U.S.C. § 1401a by cost-of-living adjustment (COLA), the retired or retainer pay, if not a multiple of $1, is rounded down to the next lower multiple of $1."
This made total sense when i calculated my COLA increase and wonder why I lost 0.93 cents and it was rounded down instead of up.
Method B.
This is how most of the people on here who do longevity pay calculations for CRSC estimate get the numbers. However, this will show a more accurate number that DFAS actually uses.
I remember when I was active duty and people told me that only full months are credited. I never paid to much attention to this minute detail through the years after i left AD and joined the reserves. I never remember it but now i find that it really does the Reserves/National Guards/M-day service members a disservice.
DoD 7000.14-R Financial Management Regulation Volume 7B, Chapter 3 "Gross Pay Computation", Paragraph 2.8 Service Credit Rounding of Months.
"2.8.3. A member who became entitled to retired or retainer pay on or after October 1, 1983, receives credit for each full month served. Disregard less than full months. See Table 3-4."
According to DFAS:
"RESERVE
Reserve service is “converted” to active service by dividing retirement points by 360."To get the multiplier, take the number calculated from above and multiply by 2.5.
How I've been calculating longevity using points:
Example :
3321 / 360 = 9.225 x 2.5 = 23.0625 or 23.06% service percent multiplier.
High 3 = 6,012.53 x 23.06% = 1,386.49 longevity pay.
This is a close short paper math calculation however for someone like me who likes to figure out the real math, its wrong and usually higher number as long as the points are correct.
Excerpt from the CRSC Statement paperwork i got regarding Method B. I will be using the example points above "3321".
3321 = 9 years, 2 months, 21 days
We drop the days as regulations chapter 3 para 2.8 says disregards less than full months. Which screws with M-Day SM as 21 points roughly 5 drill weekends essentially. In this example that's 5 months of drill that has no bearing on the final retirement pay. Of course it adds up into the big numbers, and ill go more into that further below.
Using the example Service Percent above into excerpt from CRSC document.
"a. Drop the days from your Service for Percent (9 years and 2 months), then fractionalize the months by dividing by 12 (2 divided by 12 equals 0.166). Round to two decimal places. The
result (9 years and 2 months, or 9.17) is your Service for Percent.
b. Because you are entitled to 2.5% of your High 36/High 3 base amount for each creditable year of service, multiply the Service for Percent by .025 (9.17 times .025 equals 0.22925). Round to
four decimal places. The result is your Percent Multiplier.
c. Multiply the Percent Multiplier (0.2293) by $6012.53 to obtain your initial monthly gross pay amount. For pay received after September 30, 1983, drop cents from the final figure (since your
retirement date is after September 30, 1983, the Method B initial monthly gross pay equals $1,378.00."
Using the quick math in initial example the longevity we calculated was 1,386.49, using the actual math that DFAS uses, its 1378. Its combination of paragraph 2.8 and 2.9 stated above from vol 7B.
That's a loss of 8.49 per month or 101.88 a year as the 21 days that is disregarded.
This is why I said this does the M-Day SMs a disservice.
Time after time in the reserves I always heard old timers say, "I received my 20 yr letter and can retire but I'm drilling for more points for better retirement pay". This loss of days could save people who is ready for retirement just retire and not waste more time drilling for more points. M-Day SM needs to look at their retirement points and calculate it to be divisible by 30. Any none full numbers are disregarded. Unless those next few drill months will make it be fully divisible by 30, then its not going to have a bearing on your retire pay.
Example from above at 21 days, SM needs 3 drill weekends to make it a full 30, in this scenario, worth it to go to the 3 day drills.
9 yrs 3 months - 23.13% x 6012.53 = 1,390 ( $12 more a month or 144 a year).
The caveat to it is, the longer you drill, the higher your High 3 will be but pretty minor that you should ask yourself is it worth the headache to continue to show up to drill? My last unit was ate up and I was ready to just stop coming. Granted I was the grumpy warrant but still, when your time is done, you kinda know its time to hang up the uniform. Being this is the PEB forums, and we cannot control when we retire, at least for reservist, you have an idea and can request to RST and stop showing up to drill if the points will not make sense. Maybe that only works for Warrants? who knows
TLDR: These rounding downs to nearest dollar and disregarding less than full months sucks.
I've attached Table 3-4 (Traditional) and 3-5 (BRS) from Vol7B that shows service percentage multiplier conversion.
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