U.S. Military (Ret.): Military associations prepare for retirement changes - Money, Military Retirement - Air Force Times

U.S. Military (Ret.): Military associations prepare for retirement changes

Military associations are moving to a higher state of alert over recent shifts in the wind regarding the military retirement system.

“Once again, the military retirement system is coming under the scrutiny of budgeters and deficit reduction task forces,” states the website of the Military Officers Association of America.

MOAA is one of the big guns in the Military Coalition, an umbrella group of more than 30 military-related associations that share a common legislative agenda.

It seems like more than just idle talk this time. The pressure is coming from various directions, and from a comparatively high level: Former Defense Secretary Robert Gates and his successor, Leon Panetta, have both mentioned the need to address military retirement costs.

Gates criticized the “one-size-fits-all” 20-year retirement. In his final appearance before Congress, he noted that up to 80 percent of the force does not stay until retirement and leaves with nothing, and suggested a system that allows earlier vesting for a reduced or deferred benefit might make sense.

Most of the proposals in play are recommendations of the 10th Quadrennial Review of Military Compensation, completed in 2009:

• Fully convert to a 401(k)-style system with matching government funds but with full military retired pay deferred until age 57 to 60.

• Authorize the services to make variable annual retirement contributions depending on changing retention and skill needs.

• Vest some retirement benefits after 10 years of service.

On its website, MOAA has produced a suggested “sample letter” that people can use to urge White House, Capitol Hill and Pentagon leaders to be careful about changing the military retirement benefit in pursuit of budget cuts.

The letter mentions the embarrassing experience with the Redux military retirement experiment of the 1980s and ’90s, which had to be repealed a decade after enactment when career service members began realizing what a comparatively ungenerous option it was and began to leave service in droves.

The 20-year career incentive embodied in the current system is the primary means to induce service members and their families to endure arduous conditions for years on end.

“The hard lessons of the past demonstrate that hollowing the military retirement system to ease current budget problems will only undermine” the long-term readiness of our military, the letter states.