Pentagon & Congress

Advocates expand fight over military retirement changes

Military advocates in favor of retirement reform are pushing lawmakers to move ahead on the issue, saying the change could help strengthen the fighting force and the financial lives of troops.

In a letter to House Armed Services Committee leaders this week, five advocacy groups jointly gave strong support for a 401(k)-style retirement plan proposed by the Military Compensation and Retirement Modernization Commission earlier this year.

"By not establishing a retirement plan when they begin working, service members are several years, if not a decade, behind financial planning for retirement guidelines," the letter states. "We believe that the (commission's) recommendation enhances the current retirement system and is a valuable recruiting tool for a new generation of warfighters."

The five groups — Veterans of Foreign Wars, Air Force Association, Enlisted Association of the National Guard, National Guard Association and Reserve Officers Association — boast more than 3 million members collectively.

They are in direct opposition with the Military Officers Association of America, another high-profile advocacy group that has lobbied heavily against the potential retirement change.

MOAA officials have said the changes could be a disincentive for midcareer service members to stay in the ranks.

The compensation commission's proposal features government contributions to investment accounts, matching up to 5 percent of troops' base pay, and would allow troops who serve at least 12 years to see some financial bonuses to their retirement accounts.

But it would also scale back retirement pay by up to 20 percent, alarming supporters of the current system.

VFW and the other groups have argued the current 20-years-or-nothing system is unfair to the 83 percent of troops who don't reach that retirement mark, including many driven out by difficult deployments or force cuts.

The letter also offers support for a separate recommendation to promote troops' financial literacy through new benefits training classes, so they will better understand changes to the Thrift Savings Plan.

Lawmakers on the committee so far have not weighed in on whether they'll back the retirement changes, but said that a quick legislative change on the issue is unlikely.

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