House Defense Budget Proposal Calls for Overhaul of Military Retirement System

Posted by Debi Teter

militaryauthority_us-capitalHouse lawmakers are set to unveil a defense budget this week that will not include any changes to Tricare health insurance or commissaries, but which calls for overhauling the military retirement system by 2017.

blended 401(k)-style retirement system was suggested in January as part of a landmark study by the congressionally appointed Military Compensation and Retirement Modernization Commission (MCRMC) and has sparked wide-ranging debate among servicemember and veteran groups.

Under the proposed blended retirement system, the military would give all new servicemembers a Thrift Savings Plan account and provide matching contributions throughout their service. Troops who separate after 20 years would still get a pension but only 80 percent of what those already in the system today will get.

The Armed Services Committee has stated it will modify the compensation commission proposal by continuing the TSP contributions beyond 20 years for those who want to continue serving. The loss of contributions was a sticking point for some military groups.

Servicemembers who are serving now would see no change or reduction to their retirements if they choose but could opt into the new system.

The committee’s bill must pass the House and eventually be merged with the Senate’s version, but the work this week — including the retirement overhaul — will set the course for what eventually gets passed into law.

#TSP #ThriftSavingsPlan #tricare #militaryretirement

 

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