USNAviator
04-29-11, 10:38 AM
Retirement under review: A $20 billion budget hole has DoD considering changes to the 20-year plan — again
By Andrew Tilghman - Staff writer
Posted : Tuesday Apr 26, 2011 14:21:01 EDT
<form id="hidden"> <input id="headline" value="Retirement under review: A $20 billion budget hole has DoD considering changes to the 20-year plan — again" type="hidden">
<input id="url" value="http://www.marinecorpstimes.com/news/2011/04/military-retirement-under-review-again-042611w/" type="hidden">Longer life expectancy has created a $20 billion hole in the Defense Department’s retirement pension fund and is driving officials to once again re-examine the traditional system of 20-year “cliff vesting” and lifetime checks, according to an internal Pentagon review.
</form> Military leaders may have to choose between the current pension system and major weapons programs, said Richard Spencer, a businessman who serves on the Defense Business Board.
“What are you going to trade off — a rich entitlements program, or boots and bullets for the troops?” Spencer told the board during an April 21 meeting at the Pentagon.
One major consideration will be recent studies showing that a decade of generous increases in military pay and noncash compensation such as housing allowances has put the overall income of troops on par with, or even above, that of civilians with similar education levels, Spencer said.
Those studies mark a shift from the past, when military pay was widely perceived to be lower than civilian pay and helped justify a generous retirement package that troops can start collecting as early as age 38.
The extended life span of today’s troops will also be a key factor, Spencer said. The life span of an American male has grown by at least a decade since the current system was adopted 63 years ago. The latest estimates suggest the military may need to pay $20 billion more than previously expected to cover future pension payments.
By Andrew Tilghman - Staff writer
Posted : Tuesday Apr 26, 2011 14:21:01 EDT
<form id="hidden"> <input id="headline" value="Retirement under review: A $20 billion budget hole has DoD considering changes to the 20-year plan — again" type="hidden">
<input id="url" value="http://www.marinecorpstimes.com/news/2011/04/military-retirement-under-review-again-042611w/" type="hidden">Longer life expectancy has created a $20 billion hole in the Defense Department’s retirement pension fund and is driving officials to once again re-examine the traditional system of 20-year “cliff vesting” and lifetime checks, according to an internal Pentagon review.
</form> Military leaders may have to choose between the current pension system and major weapons programs, said Richard Spencer, a businessman who serves on the Defense Business Board.
“What are you going to trade off — a rich entitlements program, or boots and bullets for the troops?” Spencer told the board during an April 21 meeting at the Pentagon.
One major consideration will be recent studies showing that a decade of generous increases in military pay and noncash compensation such as housing allowances has put the overall income of troops on par with, or even above, that of civilians with similar education levels, Spencer said.
Those studies mark a shift from the past, when military pay was widely perceived to be lower than civilian pay and helped justify a generous retirement package that troops can start collecting as early as age 38.
The extended life span of today’s troops will also be a key factor, Spencer said. The life span of an American male has grown by at least a decade since the current system was adopted 63 years ago. The latest estimates suggest the military may need to pay $20 billion more than previously expected to cover future pension payments.