Come Jan. 1, the military will be subject to a new pension structure that is going to reduce benefits, particularly for higher rank retirees, over time.
This comes as the debate on how to cut the defense budget overall over the next several years is a hot topic on Capitol Hill.
This issue will impact all San Diegans, military or not, because this is where many military members retire. And for the last several years, retiring from the military has paid off in way that will likely never happen again.
With the war in Iraq in a critical phase in 2007, the U.S. military committed to a surge to defeat Al-Qaeda and stepped up efforts to defeat the Taliban in Afghanistan. To keep senior leadership – star rank officers – Congress made a commitment to the military, increasing the cap to 40 years plus of earning potential in which leaders could earn a pension in a time period half that.
“This person has spent the last 30 years learning and demonstrating their ability, and it's only the best of the best that are going to make it to that flag level. So are these the people that we want to compensate and keep in the organization,” said Tony Teravainen, CEO of Support the Enlisted Project, an organization that helps enlisted members of the military who are struggling financially.
That 2007 change dramatically increased pensions. Before the law was changed, the typical pension for a retired four-star officer was just over $134,000. After that, according to the Pentagon, the highest pension was nearly $273,000 to a retired four-star officer with more than 40 years of service.
But the 2015 Defense Authorization Act Congress included a provision decreasing a pay raises over time, the so-called "longevity" steps in basic pay.
Some families of service members say it’s hard to believe a reduction in pension is coming given all the sacrifices over the last decade.
Local
“It is sort of an insult to think all the time that you've put into an organization now is telling you that you are not worth as much as you were to begin with,” said military spouse Tera Scott.
So will this effect recruiting and retention? According to a RAND study, military members don't stay because of pensions when they reach higher ranks, but that may not be the case at lower levels.
That’s where Teravainen says many sacrifices are made, from moving from base to base to long deployments to living on low pay.
“For all the other hardships, this is the reward for sticking with it for 20 years,” he said.
