Military Retirement: Background and Recent Developments [February 27, 2017]   [open pdf - 857KB]

"The military retirement system is a government-funded, noncontributory, defined benefit system that has historically been viewed as a significant incentive in retaining a career military force. The system currently includes monthly compensation for qualified active and reserve retirees, disability benefits for those deemed medically unfit to serve, and a survivor annuity program for the eligible survivors of deceased retirees. The amount of compensation is dependent on time served, basic pay at retirement, and annual Cost-of-Living-Adjustments (COLAs). Military retirees are also entitled to nonmonetary benefits including exchange and commissary privileges, medical care through TRICARE, and access to Morale, Welfare and Recreation (MWR) facilities and programs. Currently, active component personnel are eligible for retirement or 'vested' after completing 20 years of service (YOS) and have a choice between two options […] based on career expectations and the individual's financial situation. Reserve personnel are eligible for retirement after 20 years of creditable service based on a points system, but do not typically begin to draw retirement pay until age 60. A third category of retirement is disability retirement. In FY2015, $56 billion was paid to approximately 2.3 million military retirees and survivors. Given the size of the program, some have viewed military retirement as a place where substantial budgetary savings could be made. However, others have argued that past modifications intended to save money have had a deleterious effect on military recruiting and retention. […] When considering alternatives to the current system, Congress may choose to consider the balance between budget constraints and the needs and concerns of this constituent group."

Report Number:
CRS Report for Congress, RL34751
Public Domain
Retrieved From:
Federation of American Scientists: http://www.fas.org/sgp/crs/index.html
Media Type:
Help with citations