Second task force seeks to cut retired pay - Navy News | News from Afghanistan & Iraq - Navy Times

Second task force seeks to cut retired pay

The military retirement system is under attack from another group trying to cut federal spending, and this time they say they would make the changes apply even to current service members who have less than 15 years of service.

In a report released Nov. 17, the Debt Reduction Task Force of the Bipartisan Policy Group recommends cutting military retirement costs in half by making three changes:

• Instead of drawing a retirement check immediately after completing active duty, checks would not start until age 57.

• Instead of calculating retirement benefits on the highest three years of basic pay, the highest five years of consecutive service could be used as the multiplier to set amounts.

• A new formula would be adopted for calculating cost-of-living adjustments in military and federal civilian retired pay and Social Security — a formula expected to result in smaller increases by disregarding price increases in some goods and services if people could use a less expensive alternative product or service.

The Debt Reduction Task Force was headed by former Senate Budget Committee chairman Pete Domenici, a Republican from New Mexico, and Alice Rivlin, who was the White House budget director during the Clinton administration.

The report also talks of either freezing defense spending or rolling back the size of the defense budget to pre-2001 levels.

Retirement changes are similar, but slightly less drastic, than recommendations made by co-chairmen of another bipartisan group, the National Commission on Fiscal Responsibility and Reform. That panel also recommended a high-five calculation for military retirement with a revised COLA calculation, but would have made retirees wait until age 60 to draw their first checks.

The Domenici-Rivlin task force calculated $131 billion in savings by 2040 from the revised retirement plan, but it noted that by postponing the effect on anyone with 15 or more years in the military, the plan wouldn’t start achieving real savings until 2017.

The recommendations from the National Commission on Fiscal Responsibility and Reform co-chairmen, former Sen. Alan Simpson, R-Wyo., and former Clinton White House chief of staff Erskine Bowles, do not include a specific savings estimate from changing military retired pay, instead lumping cost estimates in with changes in federal civilian retired pay. Additionally, the Simpson-Bowles recommendations do not specifically say whether anyone now in the military would be grandfathered or whether the reduced and delayed retired pay could apply to everyone still in the service.

Any change in retirement calculations would require congressional approval, since the formula and timing for payments are set in law. The two reports are expected to get attention from Congress next year when current lawmakers are faced with drawing up a 2012 federal budget plan after the 2010 elections featured a lot of talk about cutting federal spending.