Military Advantage

MOAA Warns Retirement Under Attack

The Military Officers Association of America is warning that the military retirement system is facing assaults from various fronts including outgoing Secretary of Defense Robert Gates, incoming Secretary Leon Panetta, Congress, and Vice President Joe Biden.

According to a recent MOAA article, “Gates has criticized the "one-size-fits-all" 20-year retirement structure and has directed the Defense Science Board to establish a working group to develop alternative options.” Gates testified to the Senate Appropriations Committee last week that he liked the idea of an early vesting system because, "70-80% of the force does not stay until retirement but leave with nothing." This type of plan could enable servicemembers to leave the military with some form of retirement savings prior to reaching 20 years of service. However, unlike the current system, they would not be able to draw benefit payments until age 60 - similar to a civilian 401K program.

It seems clear that military retirement cutbacks will be an outcome from the deficit-reduction talks between administration and congressional leaders, which are currently being headed by Vice President Joe Biden.

Here is a quick list of ideas being discussed:

  • Converting to a civilianized 401(k)-style system under which full retired pay wouldn’t be paid until age 57-60.
  • Authorizing the services to make variable annual retirement contributions depending on changing retention and skill requirements.
  • Vesting retirement benefits after 10 years of service.
While none of these ideas are likely to affect current retirees, the impact on future retention and recruiting efforts could be as bad as seen after high-36 and other changes that were implemented back in the 80’s.

Let Congress know how you feel about this issue!

Read the full MOAA article, ‘Military Retirement on the Chopping Block?’ to learn more about this important issue.

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