Department of Defense Submits Its Proposed Military Retirement Changes

Department of Defense Submits Its Proposed Military Retirement Changes

June 19, 2015

Department of Defense Submits Its Proposed Military Retirement Changes

Last week, the Department of Defense weighed in on reforming the military retirement system. As we reported previously, 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. At that time, the House Armed Services Committee voted 60-2 in favor of the military retirement changes.

Now, military news blog BuiltUSA reports that the Pentagon sent its proposed changes to the military retirement system - a "blended system" - to Capitol Hill last week.

The Department of Defense's proposed changes to the military retirement system would cut guaranteed benefits for those who serve 20 years while boosting retention pay and adding a retirement savings plan to ensure most troops can leave with a benefit. One Pentagon spokesman said these military retirement changes would create a savings of $8.1 billion over 10 years for the Defense Department.

Military Times reported that “the Defense Department’s recommendations, approved by the top officers from each service, are likely to influence Congress as it works toward a final, single compromise version to send to President Obama.”

Both Sides of the Military Retirement Overhaul

As you can probably imagine, there are some service members and veterans who are happy to see a change in military benefits and some who do not like what is being proposed to reform military benefits.

The National Journal wrote a piece promoting the retirement benefits changes as positive.

If this year's Senate Defense authorization bill gets enacted, soldiers like the now-famous "American sniper" Chris Kyle would be able to leave the military with something in their back pockets for retirement. Kyle had 10 years of service in the Navy and served four tours in Iraq. But when he was honorably discharged in 2009, he had no employer-sponsored retirement savings.
Kyle is a high-profile example of one of the biggest defects in military compensation: 83 percent of men and women in uniform exit the armed forces without any retirement funds. Only those who stick around for 20 years are given the sweetest retirement deal—pensions for life. It's not fair to the rest of the soldiers. It hurts recruitment. It doesn't reflect the modern workforce.

On the flip side of the argument, Task & Purpose, which bills itself as "a news and culture site geared toward the next great generation of American veterans" wrote a detailed piece explaining why the Department of Defense's proposed military retirement system isn't the right solution.

The author of the Task & Purpose article wrote...

The halfway reforms proposed by DoD are not flexible, not modern, and irrelevant; they would be worse than no change at all. Instead of providing recruitment and retentions tools that are both cost-effective and effective, the DoD’s proposal would reduce the cost of military retirement benefits by reducing the efficacy of the recruitment and retention tools available to the military.
The proposed military retirement changes are still just that - proposed changes to military benefits. Now the changes must make it through Congress and then signed into law by President Obama. Between now and then, there will most likely be more changes made to military retirement reform.


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