Hello
@AFgirl2012
Thank you for your reply. The REDUX with disability retirement situation is seen so infrequently that I have to re-educate myself every time I see one.
The portion of the answer I provided you that indicated Disability Retirees would not be affected by the REDUX is accurate when applied to the computation of the retired pay.
That part of my answer was a precise quotation from DFAS.
However, your remarks today reminded me of a DFAS determination of seven years ago on another board where I answered CRSC/CRDP questions, I am the person that requested my colleague "pin" the reply from DFAS for future reference. His summary follows:
[start with the summary moved to the top]
Answer:
The CRDP dollar amount is based on the 40% REDUX retirement. If you would like an audit of your account or have any further questions they may be directed in writing to:
Defense Finance and Accounting Service
U.S. Military Retired Pay
8899 E 56th Street
Indianapolis IN 46249-1200
My understanding on Concurrent receipt, as it applies to CSB/REDUX retirees who have been medically retired, is that the amount paid by either CRSC or CRDP is calculated based on the reduced REDUX multiplier calculation in order to comply with the concurrent receipt restriction found in 10 USC 1414 (b)(1). The premise for the 1414(b)(1) restriction is that any military medical retired pay which is in excess of that earned for years of service is de facto payment for the disability and duplicative of the VA payment for disability.
For those readers not familiar. Redux directs a reduction of 1% in the result of the 2.5% x years of service calculation for each year that the retirement is less than 30 years of service. This results in 40% of base pay at 20 years of service, 57 ½ % at 25 years of service, but the full 75% at 30 and 100% for 40 years of service. After retirement, the annual COLA is also reduced by 1% each year but, there is a recomputation at age 62 when both the multiplier and COLA are adjusted to equal the “High Three” system.
The amount of the military medical disability retirement is calculated, under Method B, using the 2.5% x years of service multiplier without regard for the REDUX provisions as the law governing medical retirements directs this calculation. Method A uses the percentage disability assigned to unfitting conditions to calculate medical retirement. The member gets the higher of the two methods.
Consider a medical retiree who did not opt in to CSB/REDUX and has 20 years of service who is medically retired at 70% of base pay based on Method A. His CRDP is restricted to no more than his longevity retirement - 50% of retirement base . An identical retiree who took REDUX, would also be restricted to no more than his longevity retirement - which is 40% of retirement base .
I would not be surprised if DFAS calculated it differently than I beleive was intended under 1414 but the language and intent of the code is as clear as code gets.
I addressed this issue to DFAS and the response from DFAS, received in October 2015, was:
Question:
A recurring question that I see on various veteran websites concerns how CRDP is calculated when a veteran with more than 20 years service has been retired under Chapter 61 but previously opted for the REDUX system.
When the VA disablity compensation exceeds the chapter 61 retirement amount, is the amount restored by CRDP calculated at the reduced REDUX retirement factor or at the 2.5% per year of service rate used for Chapter 61 purposes?
For example, a retiree has 20 years service and DOD disability finding of 30% disability. The retiree is retired at 50% based on 2.5% per year of service IAW chapter 61. All of his retirement is offset by his VA compensation. His REDUX retirement would be 40%. Is CRDP dollar amount based on the 40% or the 50% factor?
Answer:
The CRDP dollar amount is based on the 40% REDUX retirement. If you would like an audit of your account or have any further questions they may be directed in writing to:
Defense Finance and Accounting Service
U.S. Military Retired Pay
8899 E 56th Street
Indianapolis IN 46249-1200
It was suggested that I pin this material as a reference for those medical retirees who had opted into the REDUX retirement option. [end].
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Ron
