DFAS_Newsletter

                     The Director's Corner by Commander Ed McFarland, SC, USN:

Welcome to the first issue of the DFAS Retired Pay Newsletter for 2009. In this
issue you will find information on The American Recovery and Reinvestment Act
of 2009, offset of pay for disability-based compensation, safekeeping of bonds,
the Combat-Related Special Compensation (CRSC)/Concurrent Retirement and
Disability Payments (CRDP) Open Season which was extended through Feb. 28,
2009. Also, we have provided information on where you can find each individual
Service's newsletter. http://www.dfas.mil/rna-news/march2009/directorscorner.html

                                     Changes to Federal Tax Withholding:

Public Law 111-05, The American Recovery and Reinvestment Act of 2009, was
signed into law by President Obama on Feb. 17, 2009. This act authorized a tax
credit for most workers, including recipients of Retired and Annuity Pay.
http://www.dfas.mil/rna-news/march2009/chgfedtax.html

                Offset of Pay for Disability-based Compensation (Method A):

We have received numerous inquiries regarding the offset of pay for
disability-based compensation. Legislation states: "The retired pay of a member
retired under Chapter 61 of this title with 20 years or more of service otherwise
creditable under Section 1405 of this title, or at least 20 years of service
computed under section 12732 of this title, at the time of the member's retirement
is subject to reduction under sections 5304 and 5305 of title 38, but only to the
extent that the amount of the member's retired pay under Chapter 61 of this title
exceeds the amount of retired pay to which the member would have been entitled
under any other provision of law based upon the member's service in the
uniformed services if the member had not been retired under Chapter 61 of this
title."

Put more simply, those retirees compensated based upon disability will have their
Concurrent Retired Disability Payment (CRDP) or Combat-Related Special
Compensation (CRSC) reduced, or offset, but only by the amount of the difference
between their Method A and Method B calculations.

For example, if a retiree is entitled to $2,200 each month through Method A,
disability-based compensation and only $1,400 through Method B, service-based
compensation, he will be compensated at the higher $2,200 Method A amount. If
the same retiree is awarded $1,100 through CRSC, the $1,100 amount will be offset
by the $800 difference between the original $2,200 Method A and $1,400 Method B
types of compensation, resulting in a $300 CRSC amount. With the original $2,200
disability-based retired pay and the addition of the $300 CRSC amount, the retiree
will receive a total $2,500 monthly compensation.
http://www.dfas.mil/rna-news/march2009/offsetpayfordisability-basedcompensation
.html

                                                   Safekeeping of Bonds:

The savings bond system allows Active Duty military service members for all
branches of service to request bonds they have purchased through allotment
deductions to be kept in safekeeping. Currently, these bonds are held indefinitely
as long as the service member remains on Active Duty or until the member
requests the bonds to be mailed to a current mailing address.
http://www.dfas.mil/rna-news/march2009/safekeepingofbonds.html

                                                CRSC/CRDP Open Season:

At the beginning of the year, if a retiree was eligible for both CRDP and CRSC
he/she had the opportunity to participate in the CRSC/CRDP Open Season. For
2009, this annual election was extended through Feb. 28, 2009 allowing the retiree
to choose which payment was preferred (federal law states that you can receive
CRDP or CRSC; not
both).http://www.dfas.mil/rna-news/march2009/crsccrdpopenseason.html

                                  Newsletters from each branch of service

Were you aware each branch of service has a newsletter available online? Below
are the website addresses for these newsletters:
http://www.dfas.mil/rna-news/march2009/newsletters.html

              Do you qualify for Combat-Related Special Compensation (CRSC)?

CRSC may entitle you to additional funds designed to compensate you for the
reduction of your military retired pay due to the receipt of Department of Veterans
Affairs (VA) compensation (also known as VA waiver). With CRSC, you can receive
either partial or full concurrent receipt of your military retirement pay and your VA
disability compensation:
http://www.dfas.mil/rna-news/march2009/doyouqualifyforcrsc.html

                           Paid-up SBP rebuttal period (DD Form 2656-11):

The "Paid-up Survivor Benefit Plan (SBP)" program, effective Oct. 1, 2008,
ensures all retirees who are at least 70 years of age and paid SBP premiums for at
least 360 months (30 years) will have their premiums stopped and are no longer
required to make monthly payments beginning in the month they meet the
eligibility requirements:
http://www.dfas.mil/rna-news/march2009/pdupsbprebuttalperoid.html

                                           Retired and Annuity Pay Seminars
http://www.dfas.mil/retiredpay/2009retseminarsched.html

                                                Designation of Beneficiary:

We at Defense Finance and Accounting Service (DFAS) emphasize the need for
Retired military service members to make certain their Designation of Beneficiary
paperwork is up to date and on file.
http://www.dfas.mil/rna-news/march2009/designationofbeneficiary.html

                                                     Newsletter Feature:

***In order to download the entire March 2009 Retired Pay Newsletter in .pdf
format, click here***
http://www.dfas.mil/rna-news/march2009/RetirdPayNewsletterMar09.pdf

Delivered by Defense Finance and Accounting Service