Defense Panel Supports Military Retirement Overhaul

May 04, 2015

Defense Panel Supports Military Retirement Overhaul

Against the wishes of many military vets and veterans organizations, a defense panel in the U.S. House of Representatives voted in favor of overhauling military retirement benefits. The changes came from recommendations by Military Compensation and Retirement Modernization Commission which were backed by the White House and Pentagon.

The military retirement overhaul is part of the 2016 National Defense Authorization Act - a policy and spending blueprint for the fiscal year beginning Oct. 1. Even though the House Armed Services Committee voted 60-2 in favor of the military retirement changes, it still has a way to go before it becomes official.

It must first head to the full chamber of the U.S. House of Representatives for a vote. After that, it must make it through the Senate and then be signed by President Obama before becoming law.

Proposed Changes to Military Retirement

The proposed changes involve offering service members a 401(k)-style retirement plan by 2017 with matching contributions and full vesting after two years. Another key component to the changes involves extending retirement benefits to all troops.

Presently, the military pension system pays out 50% of a soldier’s pay after 20 years’ service. Prior to those 20 years, military service members receive nothing. About 83% of troops right now do not qualify for retirement pay. Most of those not receiving military benefits are enlisted men and women who have done the majority of fighting in Afghanistan and Iraq.

Support for Military Retirement Changes

Support for the changes to military retirement is mixed among military veterans and veterans organizations. Lawmakers in Washington, including veterans of the wars in Iraq and Afghanistan, are not all on board with changing the decades-old military retirement system.

The Pentagon says changes are desperately needed. Military officials say if military personnel costs – including pay, health care and retirement – are not brought under control, they will consume the entire defense budget by 2039.


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