Can somebody explain the TERA (15 year retirement)?

2016-05-28T12:34:50-04:00

I was told by my PCM recently that I'd have a better shot at collecting disability for an ailment I've been MEBd twice for if I reenlisted and took a 15 year retirement, rather than take a spin at another MEB. However, everything I've found related to the Temporary Early Retirement Authority talks about how it is only available to Soldiers being involuntarily separated with over 15 years TIG.

Response by SGM Matthew Quick made May 28 at 2016 12:55 PM

2016-05-28T12:55:24-04:00

TERA is ONLY available to NCOs selected for involuntary separation under QSP with between 15 and years 20 years of active service...it's not a program that can be requested without already having been selected under QSP.

Response by CPT Joseph K Murdock made May 28 at 2016 1:00 PM

2016-05-28T13:00:26-04:00

Summary:

The FY 2012 National Defense Authorization Act (NDAA), Public Law 112-81, enacted 31 December 2011, authorized the military services to offer early retirement to Soldiers who have completed at least 15 years of active service. This is a discretionary authority and not an entitlement. The Army has elected to use this limited program as part of a comprehensive force management strategy to shape the force. It does not apply to Soldiers of the Army National Guard or the U.S. Army Reserve.

Eligibility:

Early retirement under TERA is limited to active duty Regular Army Soldiers who are denied continued active duty service with an established involuntary separation date of 30 September 2018 or earlier who meet the following criteria:

a. Noncommissioned Officers (NCOs) denied continued service as a result of an approved Qualitative Service Program (QSP) centralized selection board who are serving on active duty and have completed 15 but less than 20 years of active service as of the established involuntary separation date.

b. Officers/Warrant Officers who have twice failed selection for promotion to the next grade, including those who have been selected for, but not yet accepted, selective continuation, who are serving on active duty and have 15 but less than 20 years of active service as of their established involuntary separation date.

c. All Soldiers must meet all eligibility requirements for retirement for length of service for a 20-year retirement, except as provided for under the TERA program. Exceptions to other eligibility requirements are not considered. In all cases, early retirement will not occur prior to attainment of 15 years of service on the established separation date.

This early retirement benefit will not be extended to Soldiers who:

a. Were previously separated under Voluntary Separation Incentive (VSI), Special Separation Benefit (SSB), or Voluntary Separation Pay (VSP) programs.

b. Are under evaluation for disability retirement under Title 10, Chapter 61.

c. Are members of the Army National Guard or U.S. Army Reserves.

Benefit Highlights:

TERA retired pay is generally calculated using the same formula that is used for 20-or-more-year retirements, but it includes an early retirement reduction factor. The calculation is 2.5 percent of the average of the highest 36 months of base pay times the number of years of service, times the TERA reduction factor. Reduction factors are based upon the number of months that retirement is taken before the 20-year minimum (1/12th of 1% for each month of early retirement).

Example:

E-7 with 15-years, 7-months, and 13 days of service and a high 36-monthly average basic pay of $3,783.50 would be computed as follows:

RPB - Retired Pay Base (i.e. high 36 monthly average basic pay)
AS - Active Service (in months)
MO - Months in a year
RPF - Retired Pay Percentage Factor
TRF - TERA Reduction Factor (from TERA Reduction Factor table above)

RPB × ((AS ÷ MO) × RPF) × TRF =
$3,783.50 × (((187 ÷ 12) × .025) × .95667 =
$3,783.50 × (15.5833 ×.025) × .95667 =
$3,783.50 × .3896 × .95667 = $1,410.18
(Since this is not a multiple of $1, round down to $1,410.00.)
Reductions for officers are based upon their service beginning on their 1405 service dates.

TERA and the Career Status Bonus (CSB)

Soldiers who entered the military on or after 1 August 1986 are eligible to accept a $30,000 CSB at 15 years of service if they agree to serve at least 20 years. Generally, the retired pay for Soldiers who opt to receive the CSB is calculated at 2 percent of their "retired pay base" (average of highest 36 months of active duty base pay) for each of their first 20 years of service, plus 3.5 percent for each of their next 10 years of service, plus 2.5% for each year of service over 30 years. In addition, cost-of-living adjustments (COLAs) to retired pay are applied at 1% less than increases in the Consumer Price Index (CPI) until age 62, at which time their retired pay is recalculated to the amount it would have been if the full COLAs had been applied since retirement. Thereafter, COLAs are again applied at 1% less than the CPI without further recalculations throughout their retirement. For more information, refer to the Defense Finance and Accounting Service (DFAS) website at http://www.dfas.mil/retiredmilitary/plan/estimate/csbredux.html

Soldiers who have accepted the $30,000 CSB at their 15-year point but who are later approved for early retirement under TERA will not be required to repay the CSB. However, their retired pay will be subject to a reduction factor because of their early retirement. TERA, likewise, has a reduction factor, so both reduction factors are applied.

Example:

Same example as above (E-7 with 15-years, 7-months, and 13 days of service and a high 36-monthly average basic pay of $3,783.50). TERA/CSB retired pay would be computed as follows:

RPB - Retired Pay Base
360 - 30-Years (360-months)
AS - Active Service (in months)
MO - Months in a year
RPF - Retired Pay Percentage Factor
RRF - CSB REDUX Reduction Factor (1%)
TRF - TERA Reduction Factor (from TERA Reduction Factor table above)

RPB × ((AS ÷ MO) × RPF) - (((360 - AS) ÷ MO) ×RRF)) × TRF =
$3,783.50 × ((187 ÷ 12) × .025) - (((360 - 187) ÷ 12) × .01)) × .95667 =
$3,783.50 × ((15.5833 ×.025) - ((173 ÷ 12) × .01)) × .95667 =
$3,783.50 × (.3896 - (14.42 × .01)) × .95667 =
$3,783.50 × (.3896 - .1442) × .95667 =
$3,783.50 × .2454 × .95667 = $888.24
(Since this is not a multiple of $1, round down to $888.00.)

If this Soldier had not taken the CSB, his TERA retired pay would be $1,410.00.

CSB/REDUX

Response by MAJ Javier Rivera made May 28 at 2016 1:01 PM

2016-05-28T13:01:01-04:00

I will keep it very simple:

TERA: Army tells you it doesn't need you anymore and allows you to retire with way less than 50%.

Disability: Army broke you (like must of us) and depending on the injuries you could be compensated with equal or more than what your current pay; or less. It's all about analyzing the whole picture and making the best choice.

Response by CPT Joseph K Murdock made May 28 at 2016 1:19 PM

2016-05-28T13:19:03-04:00

A quick estimate is months served/240 X 1/2 X High 3 monthly salary

Response by CPT Mark Gonzalez made May 28 at 2016 1:22 PM

2016-05-28T13:22:00-04:00

If you separate with less than 20 years you do not qualify for concurrent receipt. Fiancially the best thing you can do is get to 20 and can collect both. This is why you will see people attempt to COAD who are close to 20 as there is a big financial difference. Also TERA is not a guarantee so it wouldn't be smart to try and trigger it. QMP also do not qualify for TERA so do everything you can to avoid a bad eval.

Response by SSG Roderick Smith made May 28 at 2016 1:35 PM

2016-05-28T13:35:47-04:00

Thank you all for your responses. SGM Matthew Quick, I definitely appreciate your clarification. That is the same conclusion I came to, but my PCM is so darn sure that it's the best option. CPT Mark Gonzalez If I'm understanding you correctly, if for some crazy reason I were eligible for TERA and retired, I wouldn't be able to collect disability?

Response by TSgt John Goodson made May 28 at 2016 7:29 PM

2016-05-28T19:29:34-04:00

I took TERA... But whether or not it was involuntary is, well, complicated. Here was the deal: I had a brief moment of... err... Less than stellar decision skills. That moment coupled with an over reacting, puny little commander who was prior marine and hated the Air Force put me in a position where I received literally every form of "discipline" available. He wouldn't Article 15 me because he knew I'd take it to trial and win (this from the first shirt). Anyway... The Air Force needed to cut 25k troops after years of cutting already, so they started what was called a quality force review board. It's where they find people like me, who had been in some trouble, but nothing punitive, and let us decide A) face the board and convince them that you are more valuable than an Airman with impeccable records, or B) take TERA. If you try choice A and lose, you get TERA. I chose TERA. Now, your conundrum. If you get TERA, it is, in every way, retirement. The only difference is the amount of retired pay you get. All other benefits are the exact same... Tricare prime, for family, burial, etc.... None of this affects VA benefits. VA is the same whether you were in for 20 or in for four. So, bottom line... TAKE TERA!!! You will get two checks, retirement and VA (assuming you get at least 50% disability from VA) plus benefits for family. No TERA, you get VA only. Huge difference.

Response by PO1 Private RallyPoint Member made Jun 30 at 2017 11:44 PM

2017-06-30T23:44:03-04:00

Is it possible to get early retirement if you are enlisted Navy with no discipline actions, sitting at 16yrs, with two EFMPs. One EFMP will not be able to remain stable if my schedule varies or I deploy. My next assignment is sea rotation with no other options. The EFMP has a permanent mental disability. I was also told by SR that promotion will NEVER happen for me during the rest of my career time due to extreme family needs and lack of collateral duties. Any advice?

Response by SGT Devon Bethea made Dec 21 at 2017 9:36 PM

2017-12-21T21:36:58-05:00

I dont know if I actually fall into this category because I was medically retired due to an injury to my right hip, which I suffered from Active Duty but I was placed on Retired Reserve effective date 27 December 2017 after 15 years, 3 months, and 5 days. But I was granted Early Retirement for medical disqualification which was not the result of my own misconduct. I was authorized early retirement under title 10 USC Section 1273b. Can someone explain to me what is about to happen in regards to pay or Severance pay?