Congress considers slashing military retirement

Chief Petty Officer Michael Dugas is "piped ashore" by active and retired chief petty officers at the conclusion of his retirement ceremony at the Willoughby Hills Community Center in Willoughby Hills, Ohio, Sept. 30, 2013. Dugas retired after a combined 26 years of service in the Navy, Navy Reserve, Coast Guard and Coast Guard Reserve. (U.S. Coast Guard photo by Chief Petty Officer Kyle Niemi)

Congress is looking at changing the way military members get their retirement pay.  For the first time in decades, new retirement rules could take effect in October 2017, affecting all troops enlisting after that date.

The Florida Times-Union reported that military retirement now carries an all-or-nothing pension plan that requires a minimum of 20 years of service.  The new proposed plan would cut those pensions to 40 percent of pay from 50 percent, and create a matched 401(k) style plan open to all service members.

Military members already in the ranks would have the option to join the new plan or to stay with the current “cliff vesting” system.

Col. Bryan Hiferty of Sumter stated that the current system has to change in light of budget cuts being made after nearly 15 years of war.  Hilferty, retired U.S. Army Central’s former director of communication, said, “We have to modernize and economize the system.”

The Military Compensation and Retirement Modernization Commission recommended the 401(k) style savings plan, which was recently embraced by the House Armed Services Commission.  A version of the plan is also being considered by the Senate Armed Services Committee.

With the new retirement plan, military members who serve at least 12 years will still see some bonuses and benefits of the current 20-year retirement plan.  However, all retirement payments would be cut back by up to 20 percent.

There is concern among veterans that the changes will deter talented troops from making a career out of the military.  With that realized, part of the goal of the retirement proposal is to attract young servicemen who want to refine their high-tech skills in the military but do not desire to serve 20 years.

“The new proposal doesn’t have enough in it to retain the very best officer for 20 years,” said retired Army Col. Mike Barron, a spokesman for the Military Officers Association of America.  He is also concerned that some young military members won’t know how to handle a retirement like a 401(k) plan, which might force lower-paid servicemen to contribute less towards retirement in order to pay bills.

According to The Florida Times-Union, the plan is still at the subcommittee level in both the U.S. House and Senate. With the end of major ground wars in Iraq and Afghanistan, the U.S. military is drastically cutting personnel and budgets.


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