Statement of Robert F. Hale, Assistant Director, National Security Division, Congressional Budget Office
Abstract
Mr. Chairman, I am pleased to appear before your subcommittee this afternoon to discuss the military retirement system. As you know, changes in military retirement have been proposed by many studies during the past 15 years. Most recently, the Department of Defense (DoD) has submitted two alternative plans in response to a requirement stated in the fiscal year 1986 Defense Authorization Act. In discussing DoD's plans, I will focus on three issues: whether the changes can be expected to generate the cost savings mandated by the Congress; what will be the effects of these changes on military personnel and force profiles; and how much confidence should be placed in these projections of cost savings and manpower effects. The Department has submitted two plans for the Congress to consider. The principal features of the plans are summarized in Table 1. Both plans would reduce the retirement benefits earned for service up to 20 years and would increase the credit for service between 20 and 30 years. In addition, one plan -- which I will refer to as the "COLA-Minus" plan -- would reduce cost-of-living allowances. The other plan -- which I will call the "High-Five" proposal -- would keep full inflation protection, but would calculate retired pay on the basis of the retiree's five highest years of pay, rather than the three highest as under current law. Both plans would apply only to those retirees who enter service after enactment of the new provisions -- that is, current service personnel and retirees would be "grandfathered" and so would remain under the current system.
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 05, 1985
- Accession Number
- ADA529826
Entities
People
- Robert F. Hale
Organizations
- Congressional Budget Office