Preliminary Review Of Military Retirement Systems

Military retirement reform has been a central element of the policy debate regarding why and how to restructure the system for compensating members of the U.S. armed forces. Concerns about the compensation system, and the retirement system specifically, include the rising cost of military compensation and the need for greater efficiency in the provision of compensation, the greater need for flexibility to reshape the force as missions change in ways that challenge the current compensation system, and issues related to the equity of military retirement benefits of active versus reserve personnel, junior versus senior personnel, and military personnel versus their civilian counterparts. Active members can claim retirement benefits before reservists can; junior members who leave prior to completing 20 years of service do not qualify for retirement benefits, unlike their more senior counterparts; and the 20-year vesting rule is outside the civilian vesting norm of 5-7 years of service, under the Employee Retirement Income Security Act of 1974 (ERISA). The 10th Quadrennial Review of Military Compensation (QRMC), building on previous studies and commission reports, including the 2006 report of the Defense Advisory Committee on Military Compensation (DoD, 2006) and the 2000 report of the Defense Science Board Task Force on Human Resources Strategy, has proposed an alternative military retirement system that addresses concerns regarding the current system while still sustaining the force. The defined benefit (DB) and defined contribution (DC) plans are the foundation of the alternative system considered in this analysis. RAND was asked to develop a modeling capability to assess compensation alternatives, such as the QRMC proposal, in terms of their effects on military retention, retirement behavior, vesting, cost, reserve participation, and the value of compensation from the perspective of the member leaving active duty. This monograph presents the results of that study.

Numerous proposals for restructuring the military retirement system have been prompted by increasing concern over the growth of personnel costs. In particular, the Retirement Modernization Act, now before Congress, has generated a considerable amount of controversy over its provisions for reducing the size of benefits for 20 year retirees. When future costs are used as a measure of effectiveness for alternative retirement programs, a problem arises because of the interactions between the retirement system and the personnel system. Changes in retirement benefits can induce significant changes in retention patterns, with serious cost implications. This report develops a dynamic model of the Air Force officer personnel system suitable for analyzing the long range effects of alternative retirement programs. The cost impacts of hypothesized changes in retention indicate that any savings in retirement costs may not be large enough to effect a net reduction in total system costs. Furthermore, if unanticipated changes in retention in the lower grades should develop, the increased turnover costs could completely swamp any savings in retirement costs. (Author).

The Naval Postgraduate School and correlated the level of knowledge to the effectiveness of the underlying communication sources used by the population. A web-based survey site was used for primary data collection, as well as preliminary survey results analysis. The MBA Project: 1) determined the areas of the retirement system that are unfamiliar to the sample population, 2) determined the various modes of retirement system communication used by the population, 3) correlated levels of knowledge to basic demographics and communication modes, and 4) found the root causes in knowledge deficiencies recommended. The MBA Project concluded that there was a significant military retirement knowledge deficiency in the sample population at the Naval Postgraduate School. The military retirement information system was assessed as the root cause of this deficiency. Recommendations included improvements in the consolidation, periodicity, and policy of the military retirement information systems.

Summarizes the authors' previously developed theoretical model of compensation in a large, hierarchical organization like the military that permits an analysis of the issues surrounding the design of military compensation. Presents an empirical version of that model and uses it to evaluate the current and alternative military retirement systems in terms of their implications for force structure, cost, and productivity (i.e., personnel effort and ability sorting); the implications for the current military compensation system, and the implications of several proposals (including several of the authors' own design) that change the structure of the military retirement system. The authors estimate that under certain circumstances the proposed systems would permit the Department of Defense to maintain forces at least as capable as today's at no higher cost.

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You don't have to pursue another career in government or the corporate world once you leave the military. Indeed, if you understand your key military benefits as well as fine-tune your finances, you should be able to chart a new arid exciting post-military life! That's the central message running throughout this revealing book for servicemembers, veterans, and their families who want to become financially independent prior to committing themselves to full-time retirement and plan accordingly. Semi-retired at age 41 and enjoying life with his family on the beaches of Hawaii, the author outlines how military personnel can become happily semi-retired regardless of their age. Emphasizing the importance of family, lifestyle, and bridge careers, Doug Nordman goes a long Way in providing answers to one of today's most important questions for transitioning military - ôWhat do you want to do with the rest of your life?ö Dispelling numerous myths about military transition, finances, and retirement. He focuses on the two most important inflation-protected benefits military retirees and their families receive and can build upon for creating a financially independent and semi-retired lifestyle: military pension TRICARE health system He shows how to build a sound financial house based upon: military benefits investment portfolios part-time work savings bridge careers frugal living Filled with examples checklists, recommended websites, and a rich collection of appendices that deal with inflation, multiple income streams, and the value of a military, pension, this ground-breaking book is essential reading for anyone contemplating retiring from the military or jump-starting their post-military career in the direction of semi-retirement and/or full-time retirement Book jacket.