If only there was a source document to clear up all of the speculation about the new retirement system:
https://www.congress.gov/bill/114th-congress/senate-bill/1356/text?resultIndex=5
Executive summary:
The new retirement system will be in effect for all members who join after January 1st, 2018. For people who joined between January 1st, 2006 and December 31st, 2017, they may stay with the old system or elect the new one. That election can only be made during CY2018.
Starting January 1st, 2018:
They new retirement multiplier will be 2.0 not 2.5. Members can still earn a 50% retirement by spending 25 years in.
Automatic contribution to TSP of 1% starting at 60 days of service and ending at 26 years of service. This money comes from the secretary and not the member.
Matched contribution to TSP starting at 2 years of service and ending at 26 years of service. 100% match up to 3% of members base pay and 50% match for the next 2% of monthly base pay. Between automatic and matched, the secretary will not contribute more that 5% of base pay.
A new continuation pay for full TSP members. At 12 years of service, if a member obligates to serve for another 4, the member receives a payment of (2.5 x monthly base) plus, at the discretion of the secretary (monthly base pay x (a number determined by the secretary up to 13 months)).
Lump sum retirement payment. Members eligible for retirement may elect to receive 25% or 50% as a lump sum payment. This payment will be calculated from the discounted present value of the full pension minus "an appropriate percentage as determined by the secretary".
Overall, I think this is a good system. Currently, only 17% of members ever receive retirement benefits. This is clearly a win for those 83%. And no current military member can claim it is not fair to them or they they took away their benefits. Also, even a few thousand dollars in a junior sailor's TSP will help him/her learn about investing and at least get the conversation started about how to invest.