For the first time in a quarter century, the military is likely changing retirement benefits, and new recommendations are going to Congress.
Congress tasked the Military Compensation and Retirement Modernization Commission to take a look at military benefits two years ago because they felt the government couldn't sustain the costs.
Since then, the group has been traveling to bases across the U.S. to get feedback and talk about how to transform the benefit structure. On Thursday, they are expected to propose detailed legislation.
The idea is to cut costs and address the evolving military mission. According to the Military Times, the new structure will phase out the 20-year, cliff-vesting pension, and there will likely to be a hybrid or a 401(K)-style plan available for service members.
Jim Bedinger, a financial expert and head of a focus group for military and family life for the San Diego Military Advisory Council, has been following the commission’s work and has access to the summary.
He said the new structure is designed to attract young people, as the trend is more educated people are joining the Armed Forces for high-tech careers. More women are entering the military, and there is more concentration on the use of more Special Operations forces
Those groups tend to leave the military before traditional retirement age.
“It's really important that we all understand that the commission is trying to modify, adjust the current system so it will service looking forward for the next 30 to 40 years,” said Bedinger, “so that we will have the right kind of people in the military, compensate them fairly, and if a person only stays in for 10 or 12 years, they can leave the military with a 401(K) or something like that.”
Others fear that the change will keep experienced personnel from staying in the military. The changes would have a grandfather clause and would apply to only future recruits. Before any changes, Congress is required to pass changes in the law.