House Committee Backs Military Pension Overhaul, Including Switch to Hybrid Plan

military

In January, a government panel made a series of recommendations for overhauling the U.S. military retirement system.

This week, House lawmakers say they will release a defense budget that includes many of those recommendations, including a shift from a defined-benefit system to a hybrid system with qualities of a 401(k).

From Stars and Stripes:

A blended 401(k)-style retirement system was suggested in January as part of a landmark study by the congressionally appointed Military Compensation and Retirement Modernization Commission and has sparked wide-ranging debate among servicemember and veteran groups.

“We think there is benefit in requesting the [Defense Department] come back to us probably within six to eight months with an implementation plan,” said Rep. Joe Heck, R-Nev., who is chairman of the Armed Services subcommittee on military personnel.

Under the blended retirement system, the military would give all new service members a Thrift Savings Plan account and provide matching contributions throughout their service. Troops who separate after 20 years would still get a pension but only 80 percent of what those already in the system today will get.

[…]

The bill will require the transition to the new retirement system be complete by October 2017, according to Heck, who will introduce the legislation Wednesday, and Rep. Mac Thornberry, R-Texas, chairman of the Armed Services committee.

The bill currently sits in the House Armed Services Committee.

According to Stars and Stripes, the committee is expected to vote on the measure next week. Then it must be passed by the full House and merged with a similar bill in the Senate.

 

Photo by Brian Schlumbohm/Fort Wainwright PAO

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