Military Benefits

DoD wants more details on proposals to overhaul retirement, health systems

Pentagon officials are raising questions about the conclusions reached by a blue-ribbon commission and its proposal to overhaul the military retirement and health care systems, a top defense official said.

In the Defense Department's response to recommendations from the Military Compensation and Retirement Modernization Commission, the military services are likely to ask for more information about the panel's detailed proposals on retirement, health care and quality-of-life programs.

Most Defense Department officials have had no access to the data that the commission's recommendations are based on, and that lack of background information makes it difficult for the services to provide a firm response to the proposal, Chief of Naval Personnel Vice Adm. Bill Moran said Wednesday.

"[The commission] claims they've done all the analysis but we have not been able to see what's inside that analysis, so I'm anxious to see it . … We are interested in looking at how the commission came to the conclusion that [its proposed retirement recommendations] would be a better option," Moran said.

Military officials are receptive to the idea, Moran said, noting that the Defense Department last year offered its own proposal for military retirement reform that includes some similar features.

Still, Moran said he'd like more information about the commission's claim that troops would prefer the proposed system and it would not affect retention.

"There are aspects we like and aspects we need more analysis on," Moran said.

Top personnel officials have been working around the clock to analyze the controversial proposals.

The Pentagon's official views on the proposals will likely have a strong influence on Capitol Hill and on whether any of the changes proposed in January become law. Defense Secretary Ash Carter has a March 13 deadline to give the White House a response on the commission's report.

Carter testified on Capitol Hill in early March about the defense budget, but did not offer an opinion on the commission's report.

For years, top Pentagon officials have expressed concern that personnel costs are soaring and could soon limit the military's ability to modernize weapons and develop advanced technology. Congress created the commission in 2013 to launch a two-year study of the controversial issues involving military compensation.

The proposal specifically calls for shrinking the traditional pension by about 20 percent. It would also create a new retirement benefit for troops who leave before 20 years of service by offering government contributions to a portable 401(k)-style investment account, up to 5 percent of base pay. And the new plan would give troops a lump-sum retention bonus after 12 years of service.

It includes a provision to give individual troops the option to forgo immediate monthly retirement checks and instead receive a lump-sum payment for the total value of their working-age retirement benefit between the time they leave service and the time they become eligible for their normal Social Security benefits, usually starting at age 67.

Military officials have expressed interest in a flexible retirement system that gives troops the option to save for retirement early in their careers with retention bonuses along the way and incentives to stay at least 20 years.

While military officials have sought to alter the military pay, benefits and retirement system to trim burgeoning personnel costs, they also have concerns that drastic changes could hurt retention and upend the stability of the volunteer force.

Commission officials have said that a sweeping survey of military personnel indicates that troops favor their proposal.

But while most of the survey results and data are available online, they remain challenging to process into a readable format and the commission uses a proprietary computer program to translate the information.

The commission's proposals, Moran said, appear to offer flexibility that the services could use to attract and retain personnel and provide incentives to manage personnel needs.

"All you want to do is build a framework that allows you to build [retirement benefits] to your best advantage, especially when you can use it for your specific [service] needs," Moran said.

President Obama is expected to deliver the administration's formal recommendations on the commission proposals by April 1.

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