Fundamental Changes to Retirement System Proposed

3/8/14 -  Here we go - the Pentagon has delivered detailed proposals to change the retirement system to the Military Compensation and Retirement Modernization Commission that call for fundamental change.  The changes would preserve the current system’s defining feature of a 20-year, ‘cliff-vesting,’ fixed-income pension. But it would ultimately provide smaller monthly checks.  To compensate for that, the new proposal would offer three new cash payments to be provided long before old age — a 401(k)-style defined contribution benefit awarded to all troops who serve at least six years; a cash retention bonus at around 12 years of service; and a potentially large lump-sum ‘transition pay’ provided upon retirement to those who serve 20 years or more.  In a broad view, the new plan would lower the total economic value of the military retirement package.  Details vary, but several options show a roughly 10 percent reduction in cumulative lifetime payments.  Pairing that long-term reduction with the new cash payments is a strategic decision by Pentagon personnel experts, based on the “notion” that troops would prefer a plan that gives them more money up front to reduce the impact of smaller pension payments later in life.    DoD "white paper" with proposed retirement system changes (pdf). 

Commissary Cuts will Mean Higher Prices

3/5/14 -   The President's 2015 defense budget includes steep cuts to the commissary subsidy, reducing the funding support from $1.4 billion per year by 2/3 (t0 $400 million) over the next 3 years.  This is expected to drive commissary prices up, with some estimating it will essentially wipe out the nearly $3,000 annual grocery bill savings realized by military families shopping at the commissary and even cause some commissaries to close.  Senators Mark Warner (D-VA) and Saxby Chambliss (R-GA) have cosponsored a bill that would prevent the Pentagon from cutting the commissary benefit, at least until after the Military Compensation and Retirement Modernization Commission has completed its work and made its recommendations late next year.  "Why do we keep singling out the military to get hit first?" Warner said.   Good question, Senator. 

Congress Repeals Military Retiree COLA Cut

2/19/14 - NAUS was pleased to see the House and Senate act with speed and in unison to ensure veterans receive all the benefits they have been promised and have earned while fighting in the uniform of our country. First the House then the Senate approved legislation (S. 25) that would undo the cuts to military retirement pay enacted under the Bipartisan Budget Act (BBA), otherwise known as the Ryan-Murray budget deal. Passage in both chambers was overwhelming; 326 to 90 in the House and 95 to 3 in the Senate, and the President signed the bill over the President's Day weekend. The COLA restoration was "paid for" by extending sequestration cuts one additional year into 2024.

Many members of Congress came forward for repeal  NAUS is grateful for this outpouring of congressional support in both chambers and to hear as well Defense Department’s leadership express opposition to the COLA cut. As a nation, we must honor the sacrifices our military men and women—and their families—have made at home and abroad. Our men and women in uniform face specific challenges when it comes to their own financial security. It can be difficult to save for retirement while serving abroad or to build equity in a home when relocating every few years. Having a COLA you can depend on and plan for is crucial to building financial security. As we move further into the new year, NAUS will continue its efforts to see that our government finds better ways to save money than to target veterans for budget savings.

2014 Retiree COLA is 1.5 %, Active Duty Pay Raise Just 1% 

1/4/14 - Military retired pay, Social Security, Supplemental Security Income, SBP and VA Disability compensation payments increased 1.5% in 2014, while Active Duty pay raise was just 1.0%, the lowest pay raise  in 50 years.