Definitions .—
In this section:
Covered retired pay .—
The term “covered retired pay” means retired pay under—
this title;
title 14;
33 U.S.C. 3001 the National Oceanic and Atmospheric Administration Commissioned Officer Corps Act of 2002 ( et seq.); or
42 U.S.C. 201 the Public Health Service Act ( et seq.).
Eligible person .—
The term “eligible person” means a person who—
first becomes a member of a uniformed service on or after ; or
makes the election described in section 1409(b)(4)(B) or 12739(f)(2) of this title; and
does not retire or separate under chapter 61 of this title.
Retirement age .—
l42 U.S.C. 416lThe term “retirement age” has the meaning given the term in section 216() of the Social Security Act (()).
Election of Lump Sum Payment of Certain Retired Pay.—
In general .—
An eligible person entitled to covered retired pay (including an eligible person who is entitled to such pay by reason of an election described in subsection (a)(2)(A)(ii)) may elect to receive—
a lump sum payment of the discounted present value at the time of the election of an amount of the covered retired pay that the eligible person is otherwise entitled to receive for the period beginning on the date of retirement and ending on the date the eligible person attains the eligible person’s retirement age equal to—
50 percent of the amount of such covered retired pay during such period; or
25 percent of the amount of such covered retired pay during such period; and
a monthly amount during the period described in subparagraph (A) equal to—
in the case of an eligible person electing to receive an amount described in subparagraph (A)(i), 50 percent of the amount of monthly covered retired pay the eligible person is otherwise entitled to receive during such period; and
in the case of an eligible person electing to receive an amount described in subparagraph (A)(ii), 75 percent of the amount of monthly covered retired pay the eligible person is otherwise entitled to receive during such period.
Discounted present value .—
The Secretary of Defense shall compute the discounted present value of amounts of covered retired pay that an eligible person is otherwise entitled to receive for a period for purposes of paragraph (1)(A) by—
section 1401a of this title estimating the aggregate amount of retired pay the person would receive for the period, taking into account cost-of-living adjustments under projected by the Secretary at the time the person separates from service and would otherwise begin receiving covered retired pay; and
reducing the aggregate amount estimated pursuant to subparagraph (A) by an appropriate percentage determined by the Secretary—
using average personal discount rates (as defined and calculated by the Secretary taking into consideration applicable and reputable studies of personal discount rates for military personnel and past actuarial experience in the calculation of personal discount rates under this paragraph); and
in accordance with generally accepted actuarial principles and practices.
Timing of election .—
An eligible person shall make the election under this subsection not later than 90 days before the date of the retirement of the eligible person from the uniformed services.
Single payment or combination of payments .—
An eligible person may elect to receive a lump sum payment under this subsection in a single payment or in a combination of payments.
Commencement of payment .—
An eligible person who makes an election under this subsection shall receive the lump sum payment, or the first installment of a combination of payments of the lump sum payment if elected under paragraph (4), as follows:
Not later than 60 days after the date of the retirement of the eligible person from the uniformed services.
In the case of an eligible person who is a member of a reserve component, not later than 60 days after the earlier of—
the date on which the eligible person attains 60 years of age; or
the date on which the eligible person first becomes entitled to covered retired pay.
No subsequent adjustment .—
section 1401a of this titleAn eligible person who accepts payment of a lump sum under this subsection may not seek the review of or otherwise challenge the amount of the lump sum in light of any variation in cost-of-living adjustments under , actuarial assumptions, or other factors used by the Secretary in calculating the amount of the lump sum that occur after the Secretary pays the lump sum.
Resumption of Monthly Annuity.—
General rule .—
Subject to paragraph (2), an eligible person who makes an election described in subsection (b)(1) shall be entitled to receive the eligible person’s monthly covered retired pay calculated in accordance with paragraph (2) after the eligible person attains the eligible person’s retirement age.
Restoration of full retirement amount at retirement age .—
section 1401a of this titleThe retired pay of an eligible person who makes an election described in subsection (a) shall be recomputed, effective on the first day of the first month beginning after the person attains the eligible person’s retirement age, so as to be an amount equal to the amount of covered retired pay to which the eligible person would otherwise be entitled on that date if the annual increases, in the retired pay of the eligible person made to reflect changes in the Consumer Price Index, had been made in accordance with .
Payment of Retired Pay to Persons Not Making Election .—
An eligible person who does not make the election described in subsection (b)(1) shall be paid the retired pay to which the eligible person is otherwise entitled under the applicable provisions of law referred to in subsection (a)(1).
Regulations .—
The Secretary of Defense shall prescribe regulations to carry out the provisions of this section.
Pub. L. 114–92, div. A, title VI, § 633(a)(1)129 Stat. 847 Pub. L. 114–328, div. A, title X, § 1081(a)(4)130 Stat. 2417 Pub. L. 115–232, div. A, title X, § 1081(a)(14)132 Stat. 1984 (Added , , ; amended , , ; , , .)
Editorial Notes
References in Text
Pub. L. 107–372116 Stat. 3082 section 3001 of Title 33The National Oceanic and Atmospheric Administration Commissioned Officer Corps Act of 2002, referred to in subsec. (a)(1)(C), is title II of , , , which is classified principally to chapter 43 (§ 3001 et seq.) of Title 33, Navigation and Navigable Waters. For complete classification of this Act to the Code, see Short Title note set out under and Tables.
act July 1, 1944, ch. 373 58 Stat. 682 section 201 of Title 42The Public Health Service Act, referred to in subsec. (a)(1)(D), is , , which is classified generally to chapter 6A (§ 201 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under and Tables.
Amendments
Pub. L. 115–2322018—Subsec. (e). struck out “concerned” after “The Secretary of Defense”.
Pub. L. 114–3282016—Subsec. (b)(1)(B)(ii). inserted period at end.
Statutory Notes and Related Subsidiaries
Effective Date; Implementation
section 635 of Pub. L. 114–92section 8432 of Title 5Section effective , with certain implementation requirements, see , set out as an Effective Date of 2015 Amendment; Implementation note under , Government Organization and Employees.