Blogging Employee Benefits

March 5, 2006

Military Target: New Retirement Plan

Filed under: Pensions — Fuguerre @ 11:09 am

Military.com reports a New Option for Retiring for new military unveiled this past week by the Defense Advisory Committee on Military Compensation

  • Basic Benefit Formula – The program would continue to accrue benefits at 2.5% of basic pay, as under the current program, with annuity benefits adjusted annually for cost-of-living increases.
  • Vesting – In contrast with the current program, which requires 20 years of service to vest, benefits would be vested after 10 years of service.
  • Maximum Service Credit – Members under the new program would be permitted to accumulate up to 40 years of service credit, producing a maximum retirement benefit equal to 100 percent of basic pay. The maximum under the current program is 30 years.
  • Earliest Retirement Age – Members would not be able to commence receiving benefits until age 60. Under the current program, members can commence annuity benefits upon retirement after 20 years of service.
  • Matching Contributions – Under the new program, the government will match a service member’s contributions to the Thrift Savings Plan up to 10 percent of basic pay.

In addition to being the sole plan for new service members, the new plan might be offered as an optional program for existing members.

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1 Comment »

  1. I hope this proposal never becomes a bill and never gets to the vote. As a veteran on active duty for ten years, one of the incentives for staying in until I retire at 20yrs active service is the current retirement ((pension)). The new proposal is total crap. We deserve what we have earned with blood and sweat and years away from family.

    Comment by BKH — June 21, 2006 @ 10:24 am


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