The White House said it needs more time to study proposals
to overhaul military retired pay.
On April 30, the administration unveiled its positions on
the Military Compensation
and Retirement Modernization Commission (MCRMC) report. The administration was originally
scheduled to provide its analysis on April 1, but because of the complexity of
the sweeping recommendations, requested an extension for additional study.
administration came out in support of 10 of the recommendations proposed by the
MCRMC. The proposals endorsed were largely non-controversial, including calls
for improved collaboration between DoD and the VA, enhancing financial
education for servicemembers, providing additional Space-Available travel, and
reporting on military children.
the White House expressed that the retirement proposal has merit, it signaled that
the Pentagon needs more time to look at the commission’s recommendation. Several
media reports indicate the White House will give Congress a complete evaluation
of the retirement proposal by the end of July.
the MCRMC proposal, troops will receive matching government contributions to 401k
accounts. The intent is to provide troops who serve less than 20 years a
transportable retirement benefit.
the proposal does reduce the overall pension. In order to provide transportable
retirement benefits to more troops, the proposal reduces military retired pay
by 20 percent.
retirees will not be affected by the changes.
believes that the combination of a reduced pension and a transportable 401k could
provide a greater incentive to leave the military prior to 20 years of service.
Congress Acts in Haste
the House Armed Services Committee did not wait to hear the administration’s
position before moving forward with changes to military retirement.
the MCRMC proposal, the HASC bill moves servicemembers into TSP accounts and
reduces military retired pay by 20 percent. However, matching government
contributions to TSP accounts continue for troops that serve more than 20
MCRMC proposal was so well thought out, why did lawmakers change it?” said
MOAA’s Director of Government Relations, Col. Mike Hayden, USAF (Ret). “If
House members agree that stopping contributions at 20 years of service is problematic,
what other problems will surface? This is a big change we’re talking about
here. The last thing we should do is fast-track this.”
thinks that proposed changes of this magnitude require further analysis.