March 11, 2016
At a Senate Armed Services Committee hearing Tuesday, Personnel Subcommittee chair Lindsey Graham (R-S.C.) told service chiefs he's not happy DoD is proposing yet another reduced military pay raise for 2017.
“For the last three years, this administration has failed to allow servicemembers' pay to keep up with the private sector wage growth,” said Graham. “This is the fourth year in a row where the department is shortchanging servicemembers.”
The proposed 1.6 percent pay raise is being touted by DoD as the largest raise in the last four years. However, it is still below the average American's 2.1 percent raise, as measured by the Employment Cost Index (ECI). If Congress doesn't reject the Pentagon proposal, the cumulative four-year pay gap will increase to 3.1 percent.
Graham also took issue with the Pentagon's proposal to make changes to the new blended retirement system scheduled to take effect on Jan. 1, 2018 for new entrants.
Under current law, the new system cuts military retired pay by 20 percent, but provides up to a 5 percent government match to servicemembers' deposits in federal Thrift Savings Plan (TSP) accounts. Government matching begins when a servicemember reaches three years of service. DoD's budget proposes delaying government matching until the fifth year of service.
This proposal directly counters one of the main reasons why Congress originally approved the change to retirement: to provide a retirement benefit to more servicemembers, especially the majority who do not stay for twenty years.
“Let me be clear. It is our commitment to the many servicemembers who go out on deployment before reaching their fifth year of service that they, too, have earned some retirement,” said Graham.
MOAA agrees with Sen. Graham's concern on both the pay raise and TSP matching issues.
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