5-Day NDAA Campaign, Day 4, Common Sense Retirement Changes

On January 29, 2015, the MCRMC made several recommendations, one of which was to convert the current military retirement system to a blended one which incorporates a significantly reduced, fixed retirement benefit at the 20-year point; a Thrift Savings Plan (TSP) with some government matching; a "Continuation Pay bonus/incentive at the 12-year point of a career; and financial literacy training throughout a military career. One selling point of this proposal was that it would provide a future, transferable retirement benefit to those who serve for only a few years. The proposed changes are attractive to the Administration and its DoD because it promises to significantly reduce future spending on military retirement programs. The House and the Senate have each called for the change to this "blended system," in their individual versions of the FY2016 NDAA. However, because there are some differences in details between the two versions of the NDAA, it is important that we participate in shaping the final changes. They will apply to new folks coming into the military; and current members will have the option to switch into the new program. We believe the final decisions on the shape of the new program could well impact recruiting, retention, and the overall success of the All-Volunteer Force.

The Senate wants to stop government matching of the TSP at the 20-year point of a career; the House does not. We agree with the House position. The Senate wants to leave it up to the Services as to when or if it provides Continuation Pay and to whom; the House maintains that it should be a feature of a career for all servicemembers regardless of AFSC and not left up to the whims of DoD and individual services--we agree with the House position. For financial literacy training, we believe it should be left out of the hands of DoD which has a vested interest in steering military members toward certain choices that will, in the long run, significantly reduce retirement spending.

Take Action Now, Common Sense Military Retirement Changes

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