Military Retirement: Background and Recent Developments

Abstract

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, health care benefits, and access to Morale, Welfare and Recreation (MWR) facilities and programs. Currently, there are three general categories of military retiree-active component, reserve component, and disability retiree. Active component personnel are eligible for retirement (i.e., vested) after completing 20 years of service (YOS). Reserve personnel are eligible after 20 years of creditable service based on a points system, but do not typically begin to draw retirement pay until age 60. Finally, those with a disability retirement do not need to have served 20 years to be eligible for retired pay; however, they must have been found unqualified for further service due to a permanent, stable disability. In FY2019, approximately $60.5 billion was paid to 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. Others have argued that past modifications intended to save money have had a deleterious effect on military recruiting and retention. Military retirees, families, and veterans service organizations closely monitor potential changes to the retirement system.

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Document Details

Document Type
Technical Report
Publication Date
Feb 16, 2021
Accession Number
AD1171891

Entities

People

  • David Burrelli
  • Kristy N. Kamarck

Organizations

  • Library of Congress

Tags

Communities of Interest

  • Biomedical

DTIC Thesaurus Topics

  • Accounting
  • Active Duty
  • Business Administration
  • Congress
  • Department Of Defense
  • Federal Budgets
  • Financial Management
  • Governments
  • Health Care
  • Health Services
  • Law
  • Marine Corps
  • Military Personnel
  • National Security
  • Public Health
  • Social Security
  • Training
  • United States Government

Readers

  • Military Mobilization and Reserve Forces Studies.
  • Rehabilitation and Prosthetic Care for Military Service Members and Veterans with Limb Loss or Disability.