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House defense bill backs plan to overhaul military retirement system

From Stars and Stripes:

House lawmakers said Tuesday they will unveil a defense budget this week that calls for overhauling the military retirement system by 2017.

The measure is being supported by the leadership of the House Armed Services Committee as part of its version of the annual defense authorization act, according to committee leaders who sat down with Stars and Stripes. Meanwhile, the lawmakers said the committee will not pursue any changes to Tricare health insurance or commissaries in the defense bill.

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 servicemembers 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.

Heck said the Armed Services committee will modify the compensation commission proposal by continuing the TSP contributions beyond 20 years for those who want to continue serving. The loss of contributions was a sticking point for some military groups.

Servicemembers who are serving now would see no change or reduction to their retirements if they choose but could opt into the new system.

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 Senate Armed …read more

Read more here:: Project VetCare

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