U.S. Military (Ret.): Revising retirement system could derail incentive to serve - Military Retirement - Navy Times

U.S. Military (Ret.): Revising retirement system could derail incentive to serve

The retiree blogosphere has exploded recently in the wake of reports in this newspaper and elsewhere about a plan put forth by a Pentagon advisory board to radically overhaul the military retirement system.

At its core, the plan would shift the military away from the decades-old 20-year “cliff vesting” model and toward corporate-style 401(k) accounts to which the government would contribute.

That would be a boon for the more than 80 percent of troops who don’t serve until retirement, but clearly it would be a huge hit for those who are willing to make the military a career.

Of particular concern is how the plan would affect troops already in uniform but short of 20 years, and those already retired.

For people who are still serving, the advisory panel would offer a mix of the old and new systems. They would get credit for an immediate lifetime annuity based on their years of service at the time the new plan was launched, plus 401(k) contributions for the remaining time that they would have to serve to reach 20 years.

The board’s plan would make no changes to benefits for those who are retired.

It’s important to keep in mind that this is only a proposal by a group that has no authority to implement any changes. Even more reassuring: Defense Secretary Leon Panetta recently said that if any changes are made to military retirement, they would not affect current service members or retirees.

Plenty of people believe the current retirement system is too generous, and it always seems to be on the table when the talk turns to budget-cutting. But the context too often seems to focus heavily on cost.

What about fairness? What about morale? What about recruiting and retention?

It’s easy to see the military as a young person’s occupation. But today’s military operates in a complex, technologically sophisticated environment and the future workforce will require many of the same skills and talents that are in demand in the private sector.

How can you grow a seasoned, experienced leadership cadre if you offer little or no incentive to stay in uniform for any length of time, rather than taking your military skills and education benefits and heading off to the private sector?

I understand the sentiment behind the idea that those who leave service short of 20 years should leave with something as a reward for that service.

But the bottom line, for me, is that there must be a significant incentive to serve for a full career. Without that, the foundation of the all-volunteer force begins to look pretty darn shaky.