April 3, 2015

The White House has given cautious support for proposed changes to military retirement and benefits proposed by the Military Compensation and Retirement Modernization Commission (MCRMC).

In a March 30 letter sent to Congress, the administration said that the proposed changes to the current system offered by the Commission are an, “important step forward in protecting the long-term viability of the All-Volunteer Force, improving quality-of-life for service members and their families, and ensuring the fiscal sustainability of the military compensation and retirement systems.”  The administration is working with the commission to refine specific proposals and said it will report its findings to Congress by April 30.

Before supporting any of the sweeping changes to military retirement and benefits, MOAA encourages the administration to consider testimony given by MOAA before the House Armed Services Personnel Subcommittee on March 25.

Under the MCRMC’s retirement proposal, servicemembers will receive a 20 percent reduction in military retired pay, in addition to matching government contributions in the federal Thrift Savings Plan.

MOAA’s Director of Government Relations, Col. Mike Hayden, USAF (Ret) questioned whether proposals to shift servicemembers into a 401k retirement system would harm mid-grade officer and enlisted retention. HASC Personnel Subcommittee Chair, Joe Heck (R-Nev.), also addressed Hayden’s concerns for servicemembers serving longer than 20 years. “As Colonel Hayden pointed out, when you retire at 20, the amount that you are going to get paid from year 20 until you’ve reached full retirement age is going to be less than you otherwise would get; in some cases, significantly less.”

The commission also recommends privatizing TRICARE, with military family members and retirees moving into a health care system similar to one used by federal civilians. MOAA believes the impact of shifting beneficiaries to a civilian-style health plan will be detrimental to military medical readiness. The surgeons general echoed MOAA’s concerns on March 25, telling Congress that comparison of military medicine and civilian health programs are some one of the “biggest threats to the system,” due to their drastically different purposes.

When considering these sweeping changes, it is important to remember that modifications to military compensation and retirement programs have resulted in detrimental recruiting and retention rates in the past.

MOAA is following this closely, and we will update members as soon as any information becomes available.