Amid seemingly ubiquitous challenges in federal spending, one aspect of entitlement reform has emerged as successful: the Blended Retirement System, which was introduced by the military in 2016. In addition to the BRS helping the troops, it also helps taxpayers and the military.

With the introduction of the BRS, military retirement underwent its first major overhaul in decades. These changes were designed to support a more modern, evolving military workforce. The BRS added a defined contribution option to service members’ benefits, similar to a civilian 401(k). This meant that all service members, even those who leave the service before 20 years, can now take retirement savings with them. At the same time, the BRS reduced by 20% the military retirement pension for those who serve longer than 20 years. This reduction lowers the overall cost of military retirement and thereby lowers its burden on taxpayers.

The defined contribution part of the BRS includes an opportunity for service members to receive matching payments from the government on the contributions they make to their Thrift Savings Plan. The best news — service member participation figures indicate that the new system is working for military members and their families.

Here is how the participation and benefits look in more detail:

• To date, 1.31 million service members enrolled in the BRS are taking advantage of the TSP. This now outnumbers service members using the legacy TSP, according to the Federal Retirement Thrift Investment Board.

• The vast majority of BRS participants — 84.9% — are contributing at least 5% of their salary and receiving the maximum 5% match from the government. In 2022, only 69% of BRS participants were receiving the full match.

• A change in BRS policy is responsible for the uptick in participants contributing the maximum amount and receiving increased savings as a result. Beginning in 2020, the default contribution was increased from its 2018 rate of 3% to 5%. Prior to 2020, service members had to opt into a higher contribution rate.

• When it comes to participation rates across the branches of the armed forces, the Department of Defense reports that active-duty Marines have the highest percentage of service members using the full 5% match, followed by the Air Force, Army and Navy.

• Reservists across all the services are contributing for the full match at lower rates than their active-duty counterparts.

It’s encouraging to see these participation numbers. However, there is still a lot of work to be done to promote the benefits of the BRS and matching contributions. An August 2023 Marine Corps symposium highlighted the continued lack of financial knowledge among military members, particularly with respect to the BRS: “positive messaging and awareness of BRS is insufficient within the force.” A 2022 satisfaction survey from the FRTIB revealed that service members reported lower satisfaction compared to federal employees participating in TSP. They were also reported to be less knowledgeable about their plan.

These gaps in knowledge and engagement around retirement savings options likely stem from the fact that many service members were automatically enrolled in the BRS and did not take time to learn more about its benefits or the intricacies of the TSP. Now that the default enrollment includes the 5% contribution and match, many service members are getting more value out of their retirement plan without even knowing it. Further, default TSP contributions are made into a lifecycle fund that is tied to likely retirement age. This means most service members will receive retirement savings consistent with their needs.

The BRS is the default retirement benefit for all new service members, so participation will only increase yearly as new cohorts join the military. Today, 65% of active-duty members are participating. As that percentage increases, financial education on the value of retirement savings and the unique opportunity offered by the BRS will become more essential.

A handful of years after it was introduced, the BRS represents a uniquely successful form of entitlement reform — one that saved federal budget dollars while offering service members an opportunity to play a more active role in their financial future.

Michael Meese, a retired Army brigadier general, is president of the American Armed Forces Mutual Aid Association, a nonprofit financial solutions provider supporting military families and veterans with advice, information, insurance, financial planning, investments, mortgages, survivor assistance and other benefits.