Military careerists have been spun up this month, unnecessarily in our view, by sensational headlines and news bulletins about a plan to “slash” their retirement, citing a “Pentagon study.”
The study was done by the Defense Business Board, a group of independent business executives that advises the secretary of defense from time to time on ways to streamline department organizations and programs.
The retirement report, still a draft, proposes replacing the current 20-year defined retirement plan with a 401k-like pension that would grow though annual government contributions equal to as much as 16.5 percent of military basic pay. The idea is that more service members would leave after only a tour or two with portable retirement benefits, and yet the total cost to the government would fall sharply, along with lifetime benefits for careerists.
Despite overheated headlines, no Department of Defense leader, civilian or military, has embraced this alternative pension system. Before he left office in July, then Defense Secretary Robert Gates did call for retirement reform. But Gates said any changes are likely to “grandfather,” or protect, the current force. Adm. Mike Mullen, chairman of the Joint Chiefs, seconded that view last week, saying retirement changes have to be implemented with care and should not break faith with current members.
On Tuesday the new defense chief, Leon Panetta, weighed in. To an audience at the National Defense University on Fort McNair, Washington D.C., Panetta said retirement reform must be done “in a way that doesn’t break faith with our troops and with their families. If you’re going to do something like this, you’ve got to think very seriously about grandfathering, in order to protect the benefits that are there.”
So, while it took longer than it should have, defense leaders have quashed the notion of cutting retirement benefits for the only segment of America that has sacrificed dearly since the attacks of 9/11, fighting two wars and being buffeted by an ungodly pace of operations.
That’s not to say, however, that retirement dollars aren’t at risk.
Congress could agree, for example, to dampen the formula for setting annual cost-of-living adjustments for all federal entitlement programs, as described here in an earlier column. Amid the current debt crisis, Congress could also make military retirement less generous for future generations of service members without fear of “breaking faith” with the current force.
Finally, retirement dollars might be put at risk if any “reform” plan has features to entice current members to switch voluntarily to a less valuable plan.