The question below on active duty retirement was recently posed by an ROA member; please see the answer for ROA's response.
Q: Is there any hope of successfully changing the ridiculous active duty retirement benefits in order to reduce the budget strain of expanding personnel costs and gain some parity in military retirement plans at the same time? I hope ROA supports what is obviously going to be an unpopular initiative with the other associations that care more about benefits than increasing national security!
A: First proposed by DoD in 2003 under Secretary Rumsfeld, a suggested retirement plan is still being circulated within the Pentagon that would permit active duty members to “retire” as early as ten years in, allowing them to keep matching funds in a 401(k)-style savings after ten years of service. Those members who serve 20 years would receive full benefits starting at age 57. ROA speculates that some of the resistance to earlier retirement for the Guard and Reserve is this proposal making the active duty retirement closer to the Reserve retirement, thus creating an inverted parity. To sell this concept, those currently serving would be grandfathered, delaying any savings for almost 20 years, unless this would reduce the annual liability where the Pentagon has to contribute to a retirement fund for every member in the military yearly.
ROA has watched this proposal evolve. The Association’s concern is that this proposal would create two tiers of benefits. An older generation of “haves” who continue with current benefits, and a younger generation of “have nots” who would be under the new system. While federal employees did go through a change to their retirement, the federal retirement plan is not for a population that risks their lives to defend the United States on the front lines. Such a change to retirement would create the problematic situation of two soldiers in a fox hole with different benefits. ROA has fought against that situation for decades as we sought parity for the Guard and Reserve.