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Fast-Tracking Changes Congress moves quickly on
retirement benefit changes. T
Legislative UPDATE
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he FY 2016 defense bill pro- poses taking the current 20-year, cliff-vested military retirement
benefit and converting it to a blended retirement system. Troops serving a full career would get government contribu- tions to a 401(k) in exchange for a reduced retirement pension. Troops who stay less than 20 years would have a portable ben- efit when leaving the service. The proposal is an offshoot of the Military Compensation and Retirement Modernization Commission (MCRMC) recommendation to revamp military re- tirement. The change is prospective for future entrants. It’s troubling that the House and Senate Armed Services committees are moving forward with these drastic changes without first getting input from DoD. The day after the House Armed Services Committee ap- proved changes to the military retirement system, DoD asked for more time to review the proposal and won’t finish its review until the end of July. In a letter to Congress, the White House
also asked for more time to vet the change. MOAA has been saying this exact same thing since the MCRMC released its report in January. So why the rush? Some on the Hill think if Congress fails to put something on the books before next year’s election, no one will support a change to career military benefits. But the last time Congress fast-tracked a change to the military retirement system, it didn’t heed the warnings of DoD. The last major adjustment to the military retirement
42 MILITARY OFFICER JULY 2015
system was in the mid-1980s when Con- gress passed REDUX. Then-Secretary of Defense Caspar
Weinberger opposed the change, warning Congress the new system would inevitably undermine readiness and retention and provide more of an incentive to leave. A decade later, that prediction proved
true. Congress had to repeal REDUX in 1999 because the Joint Chiefs of Staff told Congress the program was damaging mo- rale and badly hurting retention of the mid- career NCO and officer corps. The biggest problem with fast-tracking changes to the military system is that any future corrections Congress will need to make will be subject to strict budget rules. Accountants consider reduced payments to retirement accounts as savings. If Congress has to revert to the current system (or some other change), bean counters will see the change as an increase on their books. MOAA supports a blended retirement
system that can provide a portable benefit to those who leave voluntarily with less than 20 years of service. However, any change to the retirement system cannot put at risk retention of the highly experienced, mid-grade NCO or officer. Change of this magnitude requires fur-
ther study. Before fast-tracking changes to military retirement, Congress needs to hear from White House and DoD leaders. It’s mission critical to get this right from the start. Failure to do so could take years to correct and end up costing Americans more than just higher taxes. MO
— Contributors are Col. Mike Hayden, USAF (Ret), director; Col. Mike Barron, USA (Ret); Col. Bob Norton, USA (Ret); Capt. Kathy Beasley, USN (Ret); Col. Phil Odom, USAF (Ret); Cmdr. René Campos, USN (Ret); Karen Golden; Jamie Naughton; and Trina Fitzgerald, MOAA’s Gov- ernment Relations Department. To subscribe to MOAA’s Legislative Update, visit www.moaa .org/email.