Discount Rate Analysis for Blended Retirement System Lump Sum Payments

November, 2017
IDA document: P-8527
FFRDC: Systems and Analyses Center
Type: Documents , Human Capital
Division: Cost Analysis and Research Division
Stanley A. Horowitz, David M. Tate, John T. Warner See more authors
The Fiscal Year (FY) 2016 National Defense Authorization Act modified the military retirement system. The new system, called the Blended Retirement System (BRS) allows retiring personnel to convert a part of their retirement annuities to a lump sum, receivable at retirement. The Secretary of Defense must determine the discount rate to use in calculating the lump sums. The Director for Military Compensation, Office of the Assistant Secretary of Defense (Manpower and Reserve Affairs) asked the Institute for Defense Analyses to perform analytical tasks to help determine the discount rate.