Officer Grade Determination: Calculating What Could Be Lost
This blog explains how an Officer Grade Determination (OGD) can result in a lower retirement grade, significantly reducing an officer's military retirement pay. It highlights the financial impact of such reductions and emphasizes the importance of seeking legal assistance to protect your retirement benefits.
How Retiring at a Lower Grade Due to an Officer Grade Determination (OGD) Results in Less Military Retired Pay
Military retirement pay is based on two primary factors:
- Your retired pay base (which is determined by the highest grade satisfactorily held)
- Your years of service
When an officer undergoes an Officer Grade Determination (OGD), the review board evaluates whether the officer served satisfactorily in their highest grade. If the board determines the officer did not serve satisfactorily, they may decide that the officer must retire at a lower grade. This downgrade directly impacts the calculation of retirement pay.
Retirement Pay Calculation Formula
Military retired pay is generally calculated using the following formula:
Retirement Pay = Retired Pay Base × Multiplier (2.5% × Years of Service)
- Retired Pay Base: For officers who entered service before September 8, 1980, the retired pay base is the final basic pay at their highest grade. For those who entered after that date, it’s the average of their highest 36 months of basic pay ("High-3").
- Multiplier: The percentage of your final pay base that you’ll receive as retirement pay, calculated as 2.5% times your years of service.
Example of Retirement Pay at Different Grades
Let’s consider the following hypothetical example of an officer (John Doe) with 25 years of service, whose highest grade held is O-6 (Colonel) but who is being considered for retirement at the grade of O-5 (Lieutenant Colonel) due to an adverse administrative action that triggered an OGD.
Scenario 1: Retiring at the Grade of O-6
- Years of Service: 25 years
- Basic Pay for O-6 (2024): $12,412 per month
- Multiplier: 25 × 2.5% = 62.5%
Retirement Pay Calculation:
$12,412 × 62.5% = $7,757.50 per month
John, if he retires at the grade of O-6, will receive $7,757.50 per month as his retirement pay.
Scenario 2: Retiring at the Grade of O-5
- Years of Service: 25 years
- Basic Pay for O-5 (2024): $10,856 per month
- Multiplier: 25 × 2.5% = 62.5%
Retirement Pay Calculation:
$10,856 × 62.5% = $6,785 per month
If John retires at the grade of O-5 instead of O-6, his retirement pay drops to $6,785 per month.
Impact of Lower Grade Retirement
In this example, the difference between retiring at O-6 versus O-5 is significant:
- O-6 Retirement Pay: $7,757.50 per month
- O-5 Retirement Pay: $6,785 per month
The officer would lose approximately $972.50 per month in retirement pay, which equals about $11,670 annually. Over the course of 20 years of retirement, this reduction amounts to a loss of over $233,400 in total retirement income.
Why This Matters
A reduction in grade due to an OGD can have substantial financial consequences for the remainder of your life. The lost retirement pay adds up over the years and could also impact survivor benefits, as these are generally calculated based on your retirement pay amount.
How an Attorney Can Help
An experienced military attorney can assist you in presenting the strongest case possible during an OGD. By providing supporting evidence, crafting a strong argument, and submitting persuasive character statements or mitigating evidence, you may be able to avoid a reduction in grade and protect your retirement pay.
If you’re facing an Officer Grade Determination, it’s essential to get legal assistance as soon as possible. Contact Patriots Law Group today at 301-952-9000 or schedule a consultation online (CLICK HERE) to help protect your retirement benefits.
DISCLAIMER:
The information provided in this blog is for general informational purposes only and does not constitute legal advice. Reading or engaging with this content does not establish an attorney-client relationship between you and our law firm. If you need legal assistance regarding your specific situation, we encourage you to contact us directly for a consultation.
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