Military Retirement Benefits For The Current Retirement Program

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POSITION PAPER ON MILITARY RETIREMENT BENEFITS 1. The following position paper will cover the future of military retirement benefits in the current fiscally-constrained environment. Specifically, the problem with the current fiscally-unsustainable retirement program and possible solutions to the aforementioned problem. This paper advocates solutions including discussion on the current program, the newly implemented program, and variations of those programs. 2. The current military retirement program draws a great deal of attention due mainly to its cost. However, there are many factors that contribute to the overall disdain with the current retirement program. Some of those factors being cost, equality, civilian comparability. In…show more content…
For example, “…other public and private sector retirement plans typically do not begin providing an annuity until age 55, 60, or 65…” The next problem with the current retirement plan is that it is an ‘all or nothing’ system. Either a military member serves 20 years and qualifies for benefits or they do not. This is vastly different from many civilian programs currently offered and something that the Department of Defense (DOD) has attempted to remedy with the newly implemented program. Many civilian-based retirement programs offer vesting programs that enable employees to secure retirement benefits after a certain number of years, usually anywhere from five to 15 years. Another issue with the current military retirement plan is its comparability to the private-sector. As stated by FAS, “…private-sector employers who have reduced or eliminated their reliance on defined benefit programs and have focused almost exclusively on 401(K)-type programs…” Additionally, many private-sector companies offer contribution matching up to a certain percentage, assisting employees in saving for retirement. This is not offered in the current military retirement plan. Having discussed the current retirement program the next topic will be the newly implemented retirement program. 3. A possible solution to the current retirement program is a recently authorized plan. In fiscal year (FY) 2016 a new military retirement plan was introduced
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