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Officers can cash in big for getting out early

Some could take home nearly $200K in FY15

Apr. 6, 2014 - 06:00AM   |  
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AV-8B pilots are among the officers in 43 MOSs who will be elligible for Voluntary Separation Pay or Temporary Early Retirement Authority programs in fiscal 2015.
AV-8B pilots are among the officers in 43 MOSs who will be elligible for Voluntary Separation Pay or Temporary Early Retirement Authority programs in fiscal 2015. (Sgt. Austin Hazard / Marine Corps)
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Jobs eligible for early out cash

Officers in 43 military occupational specialties will be eligible for Voluntary Separation Pay or Temporary Early Retirement Authority programs in fiscal 2015, three fewer than this year.
Captains, majors and lieutenant colonels with between 15 and 20 years of service are eligible for TERA, while majors and major selects who have served between six and 15 years are eligible for VSP.But all must be in one of the following MOSs:
0180: Adjutant
02XX: Intelligence field specialties
0302: Infantry officer
0402: Logistics officer
0602: Communications officer
0802: Field artillery officer
1302: Combat engineer officer
1802: Tank officer
1803: Assault amphibious vehicle officer
3002: Ground supply officer
3404: Field management officer
4302: Public affairs officer
4402: Judge advocate
5803: Military police officer
6002: Aircraft maintenance officer
6602: Aviation supply officer
72XX: Air control/air support/anti-air warfare/air traffic control field specialties
7509: Pilot VMA, AV-8B qualified
7525: Weapons systems officer, F/A-18D qualified
7556/57: Pilot VMGR, KC-130 co-pilot or aircraft commander
7562: Pilot HMH/M/L/A, CH-46 qualified
7563: Pilot HMH/M/L/A, UH-1 qualified
7564/66: Pilot HMH/M/L/A, CH-53 A/D or E qualified
7565: Pilot HMH/M/L/A, AH-1 qualified

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Some Marine officers will be eligible for an early retirement or a lump sum payout of nearly $200,000 under the service’s recently announced fiscal 2015 early out incentives.

Incentives include the Temporary Early Retirement Authority program for captains, majors and lieutenant colonels and Voluntary Separation Pay for majors and major selects, according to Marine administrative messages 154/14 and 155/14, signed March 28.

Between the two programs, hundreds of officers are likely eligible. Marines can begin applying immediately if they will have served the requisite number of years by the time they leave the service under one of the early out incentives, although they can not separate until fiscal 2015.

Both programs are part of the Marine Corps’ drawdown plan, which is on track to cut the service to 174,000 personnel by the end of 2017. That’s down from a wartime high of 202,000, when Marines were fighting a two-front war in Iraq and Afghanistan.

With the need to cut tens of thousands of Marines, the service sought to rely primarily on voluntary separation measures for officers and enlisted. Those include early outs, both with and without financial incentives. In some cases, however, retirement-eligible lieutenant colonels and colonels have been involuntarily cut by Selective Early Retirement Boards.

Many Marines remain eligible for generous voluntary incentives, however. Here is a look at two of the most anticipated programs for officers.

Voluntary Separation Pay

Voluntary Separation Pay for majors and major selects offers those in one of 43 military occupational specialties lump-sum payouts that can reach nearly $200,000.

Because VSP is a carefully targeted incentive, not all Marines are eligible. It is designed to cull only ranks and MOSs where there is a surplus of Marines. As a result, “the VSP program is not an entitlement,” according to MARADMIN 154/14. “Each request will be considered based on the needs of the Marine Corps.”

Those approved will receive a handsome payout, enough to buy a nice home in many areas.

The payout is calculated by multiplying a Marine’s annual basic pay by his years of service, and multiplying the total by 20 percent. A major with 12 years of service making $83,055 per year, for example, would receive a VSP payout of $199,332, before taxes.

To be eligible, majors and major selects must:

■ Be in an eligible MOS.

■ Have served between six and 20 years on active duty, although those who have served 15 or more should opt for TERA.

■ Have served at least five years continuously on active duty preceding their separation under VSP.

■ Not be subject to pending disciplinary action, administrative separation or mandatory discharge.

■ Not be pending a disability discharge, a transfer to the permanent disability retired list or currently enrolled in the disability evaluation system.

Waivers will be considered for Marines with service obligations for reasons that include payback for education, time-on-station requirements or aviation retention pay.

Those applying for FY15 VSP must separate by Sept. 30, 2015, but no earlier than Oct. 1.

Temporary Early Retirement Authority

The TERA program will be offered again in FY15 and is expected to continue throughout the drawdown until the service hits its personnel target at the end of 2017.

Early retirement will again be available to captains, majors and lieutenant colonels in one of 43 MOSs who have served between 15 and 20 years. Like VSP, TERA is a carefully targeted tool used by manpower planners to alleviate overmanning in specific jobs.

Marines eligible for TERA are also technically eligible for VSP, although they would be well-advised to take TERA instead. Despite the large lump-sum payout offered by VSP up front, TERA could pay out hundreds of thousands more dollars over the duration of a Marine’s retired life.

A range of factors are used to compute TERA, which is roughly based on years of service and base pay. A major with 16 years of service and a base pay of $7,192.50, for example, would receive a pension of $2,897 per month, or nearly $35,000 per year.

For specific directions on how to calculate your own pension under TERA, refer to the TERA fact sheet available in the references section at https://www.manpower.usmc.mil.

To be eligible for TERA, a captain, major or lieutenant colonel must be in an eligible MOS. Prior enlisted officers must also have at least 10 years of commissioned service, although waivers are available for those with as few as eight.

Separation under either program will not affect Post-9/11 GI Bill benefits transferred to dependents.

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