RETIRED PAY GREATER THAN 75 % FOR OVER 30 YEARS SERVICE
One of the more significant changes made by the National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364) was the lifting of the 75 percent cap used in the calculation of retired pay for members eligible for service retirements.
Effective January 1, 2007, anyone retiring due to service in excess of 30 years of total active service will receive credit for service over 30 years. For example, a member who served 32 years will receive 80 percent of their retired pay base and a member who has served 42 years will receive 105 percent of their retired pay base. In most cases, there is no longer a cap on the percentage multiplier to be utilized in the computation of retired pay.
There are two categories that have been excluded from the lifting of the percentage cap. The first is for a member retired by reason of disability. Such members are still capped at the 75 percent by law. A member with 30 or more years of service must be retired based on service, not disability, in order to have the retired pay computed using a percentage greater then 75 percent.
The second area is for Army and Air Force enlisted members who have been cited for Extraordinary Heroism (EH). The laws that provide the additional 10 percent of retired pay for extraordinary heroism for Army and Air Force members contains language that limits their computations to not exceed 75 percent. The new law did not change that language. Therefore, if their computation includes the additional 10 percent for the EH, they are limited to 75 percent. If the member has over 30 years of service, DFAS can compute their pay ignoring the EH, and then exceed the 75 percent.
