Advertisement

You will be redirected to the page you want to view in  seconds.

Pentagon: No formal proposal for retirement overhaul until 2015

Mar. 7, 2014 - 04:08PM   |  
  • Filed Under

Defense Secretary Chuck Hagel wants to wait until next year before asking Congress to make fundamental changes to the current military retirement system, a Pentagon spokesman said Friday.

One day after the Defense Department released detailed proposals for military retirement reform, Hagel’s spokesman said that the politically sensitive suggestions should not be considered formal recommendations.

“No one of these options is a favorite. No one is preferred. These are just options that are teed up to be considered,” Rear Adm. John Kirby said during a press briefing Friday.

The proposals were developed by the Defense Department’s Personnel and Readiness Office and sent to both Capitol Hill and the Military Compensation and Retirement Modernization Commission.

Before making any formal recommendations for how Congress should change military retirement laws, Hagel wants to wait for the commission to complete its study and submit its report to Capitol Hill, due in February 2015.

Hagel “has been consistently clear that he wants to work this through the commission,” Kirby said. “That is the forum he believes is the appropriate one to deal with these issues.”

The proposals would preserve the current system’s defining feature of a 20-year, “cliff-vesting,” fixed-income pension. But it would ultimately provide smaller monthly checks.

To compensate for that, the new proposals would offer three new cash payments to be provided long before old age — a 401(k)-style defined contribution benefit awarded to all troops who serve at least six years; a cash retention bonus at around 12 years of service; and a potentially large lump-sum “transition pay” provided upon retirement to those who serve 20 years or more.

Hagel said retirement reform must eventually be put on the table for potential cost cutting, Kirby said.

“The Secretary believes that we’ve got to get a handle on compensation, pay and benefits for the military, soon,” Kirby said.

“He has been very clear that the longer we wait, the harder this gets going forward and the larger the crash is going to be 10 or 20 years from now when it becomes unsustainable,” Kirby said.

“He wants all options considered — to include retirement benefits.”

More In SPECIAL Content

Start your day with a roundup of top defense news.

VA Home Loan
Rates

Search By:

Product Options:
Zip Code:

News for your in-box

Sign up now for free Military Times E-Reports. Choose from Money and Education. Subscribers: log in for premium e-newsletters.


This Week's Army Times

This Week's Army Times

This job will get you promoted
Army's new program elevates role of AIT platoon sgts.

Subscribe for Print or Digital delivery today!

Classifieds
MilitaryTimes Green Trusted Classifieds Looking to buy, sell and connect on Military Times?
Browse expanded listings across hundreds of military installations.
Faces of valorHonoring those who fought and died in Operations Iraqi Freedom and Enduring Freedom.
hall of valorThe Hall of Valor is a searchable database of valor award citations collected by Doug Sterner, a Vietnam veteran and Military Times contributing editor, and by Military Times staff.
Woman who cried rape
(3 replies)
   Last Post: TJMAC77SP
        May 3, 2014 1:32 PM
   Last Post: garhkal
        May 1, 2014 5:03 PM
Cliven Bundy
(45 replies)
   Last Post: Chief_KO
        Apr 26, 2014 9:49 AM
Handbooks

All you need to know about your military benefits.

Benefits handbook

Guard & Reserve All you need to know about the Guard & Reserve.

guard and reserve handbook