washingtonscene

Retired Pay and Survivor Issues

Military retirement changes Congress adopted retirement reform recommendations for future service entrants in the FY 2016 National Defense Authorization Act (NDAA). The new system will cut future military retired pay for 2018 and subsequent service entrants by 20 percent and substitute defined contributions to federal Thrift Savings Plan (TSP) accounts held by servicemembers. The new blended retirement system pro- vides for an automatic government contri- bution (1 percent of basic pay a year) to TSP accounts, with an additional match of the servicemember’s own contribution, up to 4 percent of basic pay a year. The new law ends the government match after 26 years of service. MOAA will continue to advocate for government matching for a full career. The new retirement plan also calls for DoD to provide a robust financial education program to help servicemembers make bet- ter decisions about the investment portion of the new plan. MOAA will advocate to en- sure this requirement is fully met. Current servicemembers and retirees will be grandfathered into the current retirement system. Because the new retirement system

reduces benefits for those who serve a career in order to fund new benefits for those who leave service, MOAA has great concerns about the new system’s impact on long-term retention and readiness. We intend to be watchful for any such trends as the new system takes effect over time.

COLA commitments Inflation-protected COLAs are an essential part of the nation’s commitment to protect earned-compensation value for military retirees and survivors and other federal annuitants over the course of many years.

46 MILITARY OFFICER JANUARY 2016

Proposals to cap annual COLAs below inflation or to redefine and depress the Consumer Price Index for the purpose of geometrically depressing successive annual adjustments would break long-standing statutory commitments to them. Accordingly, MOAA is gratified the FY

2016 NDAA repealed the final section of a COLA-reducing law that was enacted two years ago for future military retirees. Under the repealed law, future military re- tirees would have had their annual COLAs capped 1 percentage point below inflation until age 62. MOAA was instrumental in repealing the COLA cap, with members sending more than 300,000 messages to Capitol Hill in just a few months. MOAA will continue to exert every ef-

fort to preserve the congressional intent, as expressed in the House Armed Services Committee Print of Title 37, U.S. Code, “to provide every military retired member the same purchasing power of the retired pay to which he was entitled at the time of retirement [and ensure it is] not, at any time in the future ... eroded by subsequent increases in consumer prices.”

Concurrent receipt MOAA supports a plan to phase out the disability offset to retired pay for all disabled retired servicemembers, with initial priority for those who were prevented from serving 20 years solely because they became severely disabled in service. MOAA will work with Congress, DoD, and the administration to advance this proposal as a further important step toward ending the offset for all disabled retirees.

Eliminate the SBP/DIC offset MOAA will continue to fight for full repeal of the deduction of VA Dependency and Indemnity Compensation (DIC) from Survivor Benefit Plan (SBP) annuities for