U.S. Military (Ret.): Military retirement benefits are safe, for now - Military Retirement - Navy Times

U.S. Military (Ret.): Military retirement benefits are safe, for now

Q. My brother is retired from the Navy. We have heard rumblings that Congress is considering changes to retirement benefits. From what we can gather, Congress is proposing that retirement benefits no longer be paid to retirees until they reach Social Security age. Is this correct and if so, can you point me to the particular bill? Also, it is my understanding that if the bill is passed, current retirees will not be “grandfathered.” Please let me know — my brother and his family depend on his retirement benefits to make ends meet.

A. This question is a reflection of how quickly rumors can ignite and turn into raging brushfires.

Unfortunately, in this case the brushfires are being fed by a serious lack of clarity about what might happen.

Yes, top defense, administration and congressional leaders have discussed the need to overhaul military retirement benefits as part of ongoing negotiations to cut the federal budget. Much of the talk in that regard focused on the possibilities of shifting retirees to a system that more closely resembles a civilian 401(k)-type plan, and possibly delaying eligibility for full retired pay until age 60.

But at this point, nothing has come of those discussions.

A few other things that are matters of public record:

Defense Secretary Leon Panetta has said that any changes to military benefits would not “break faith” with current troops and retirees. However, he has also said that the growing cost of such benefits must be addressed.

On Jan. 26, Panetta released more details: His plan for military retirement is to seek approval from Congress to create an independent panel to spend a year studying the retirement system and recommending changes.

The interesting wrinkle there is that the Pentagon wants to use the same framework that has been part of past base closure rounds — whatever recommendations the retirement commission comes up with would go to Congress as a package that would get a straight up-or-down vote, with no chance for lawmakers to tinker with the details.

Already, some lawmakers are balking at that idea. And again, there’s no guarantee that Congress would approve any changes.

One reassurance offered by Panetta is that any changes to the retirement system would not affect current troops or, by extension, current retirees.

Take that with a grain of salt if you choose, but it’s hard for me to believe that major changes would be made that would significantly diminish the value of benefits for current retirees. The outcry would be swift and deafening.

The bottom line on your question: Your brother’s retirement benefits are safe for now. As for what may come next, stay tuned. You can be sure that any updates on this important subject will be prominently reported in this newspaper.