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.