Pentagon considers hybrid retirement system for veterans

Source:® News

Pentagon considers hybrid retirement system for veterans
The Pentagon, looking northeast with the Potomac River and Washington Monument in the distance.

The Pentagon is considering a hybrid retirement system for veterans as it focuses on making changes to its overall plans. Essentially, the changes would give future veterans less in retirement benefits, but the benefits would be spread out among more people. The Pentagon has been careful to point out this is not a final proposal or plan and simply something they are working on for a study.

Veterans may end up seeing smaller retirement benefits in the future, according to the Detroit Free Press. Current veterans and those who have already retired would not be affected in any way by the potential changes, but future veterans could see some significant modifications. In addition, current military members who have not retired may benefit from a grandfather clause that would mean they would not be affected.

The suggestions from the Pentagon would reduce costs greatly in the future by providing fewer benefits. This means that future veterans will see smaller checks in their retirement compared to current veterans. In addition, veterans who have not reached retirement age would receive even less and would have to wait to reach the right age before getting full benefits.

The changes also include a possible continuation pay and a transition pay that would act as bonuses. The U.S. military would include its own version of a 401(k) as a savings plan to go along with some of the options. Despite some of the positive aspects, veterans are not happy to see future vets face smaller retirement packages.

The Pentagon realizes these potential ideas could mean retention in the military will suffer, but it feels the bonuses and other factors would encourage people to stay. Additionally, it thinks the option of opening benefits up to more people will help entice people. Veterans are worried these potential changes will hurt people who stay in the military for more than 20 years while helping those who stay for shorter periods of time.

It is already clear that the suggestions are not sitting well with some veteran groups that have analyzed them. They are also concerned about retention and the message the U.S. military is sending to its members. If people who stay for a shorter length of time are getting more benefits, then what is the advantage of staying longer? Changes to the retirement benefits will be made, but they may not be the ones the Pentagon just released.







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