(1) General rule.— Subject to paragraphs (2) and (3), the percentage to be used under subsection (a) is the product (stated as a percentage) of
(A) 21/2, and
(B) the members years of creditable service (as defined in subsection (c)).
(2) Reduction applicable to certain new-retirement members with less than 30 years of service.— In the case of a member who first became a member of a uniformed service after July 31, 1986, has elected to receive a bonus under section
322 (as in effect before the enactment of the National Defense Authorization Act for Fiscal Year 2008) or section
354 of title
37, has less than 30 years of creditable service, and is under the age of 62 at the time of retirement, the percentage determined under paragraph (1) shall be reduced by
(A) 1 percentage point for each full year that the members years of creditable service are less than 30; and
(B) 1/12 of 1 percentage point for each month by which the members years of creditable service (after counting all full years of such service) are less than a full year.
(3) 30 years of service.—
(A) Retirement before january 1, 2007.—
In the case of a member who retires before January 1, 2007, with more than 30 years of creditable service, the percentage to be used under subsection (a) is 75 percent.
(B) Retirement after december 31, 2006.— In the case of a member who retires after December 31, 2006, with more than 30 years of creditable service, the percentage to be used under subsection (a) is the sum of
(i) 75 percent; and
(ii) the product (stated as a percentage) of
(I) 21/2; and
(II) the members years of creditable service (as defined in subsection (c)) in excess of 30 years of creditable service, under conditions authorized for purposes of this subparagraph during a period designated by the Secretary of Defense for purposes of this subparagraph.
