The White House said Wednesday that President Obama and his advisers are still refining some of the proposals from an independent commission on military retirement pay before giving the recommendations to Congress.
White House aides didn’t indicate which of the 15 recommendations by the Military Retirement Compensation and Retirement Modernization Commission are of particular concern to the president, who told congressional leaders Monday that he generally supports the proposals as “important step forward in protecting the long-term viability of the all-volunteer force” and “ensuring the fiscal sustainability of the military compensation and retirement systems.”
“The recommendations deal with complex military pay and compensation issues that he wants his team to look into further before he consults with Congress,” said White House deputy press secretary Shawn Turner.
Congress would need to approve any changes to the military retirement benefits, and lawmakers have expressed skepticism about the panel’s findings.
One of the main proposals would cut the traditional annuity that troops receive after serving 20 years, but set up a 401(k)-like system that a service member would pay into and the government would match.
While service members currently can contribute to a Thrift Saving Plan (TSP), the military doesn’t provide matching contributions. Under the proposed plan, service members would receive matching contributions up to 5 percent of their salary, plus a base of 1 percent regardless of their contribution levels.
The commission also recommended that service members be automatically enrolled in the TSP at an amount equal to 3 percent of their base pay, with the ability to raise, lower or terminate their contribution at any time.
The commission presented projections on how the changes in the retirement pay system would affect the average service member. For example, it said a soldier at the enlisted rank of “E7” who retired with 20 years of service would lose nearly $135,000 in defined benefit retirement pay but would gain $565,500 from a TSP through age 85, for a net gain in retirement of $430,500.
Also, the commission said the majority of the current defined benefit would be kept under the proposed changes. The defined-contribution benefit would be an option for currently service members who opt into the new blended retirement plan, as well future service members.
Under the current plan, the commission said, 83 percent of service members leave the military without any retirement benefits. The proposed plan would give retirement benefits to about 75 percent of service member due to a shorter vesting time.
The commission also proposed ending Tricare in favor of private health insurance for active-duty family members, National Guard and reservists, and middle-aged retirees not yet eligible for Tricare for Life.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
Please read our comment policy before commenting.