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An Overview of Past Proposals for Military Retirement Reform

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Technical rept.

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This technical report provides an overview of the history of U.S. military retirement studies and associated legislation, with a particular focus on the past 60 years of proposed reforms. The emphasis is on regular as opposed to reserve nondisability retirement because of the relative weight that reformers have placed on the regular retirement system. It is organized around five major issues that have driven attempts at retirement system reform 1 Cost -- Reducing the benefits associated with the transition from active duty to civilian life during the so-called second-career phase of military retirement i.e., service members who are fully vested receive an immediate annuity upon retirement, which is often at a young enough age for them to embark on a second career 2 Equity -- Providing benefits for members separating before 20 years of service YOS as well as for those who are vested at 20 YOS 3 Selective retention -- Increasing incentives for key service members to stay beyond 20 YOS 4 Civilian comparability -- Providing a defined contribution plan that vests earlier than 20 YOS the military retirement system is a defined benefit plan, like a pension plan in the private sector and 5 Force management flexibility -- Providing tools for the services to create variable career lengths when needed for force management. To provide context, the report begins with a brief overview of the current provisions e.g., vesting rules and benefit formulas of the regular and reserve retirement systems before going into detail about the history of reform efforts. It also includes a brief commentary on reforms aimed at the reserve retirement system as a point of comparison. Two other RAND Corporation documents are associated with this research Beth Asch, et al., Reserve Retirement Reform A Viewpoint on Recent Congressional Proposals, 2006 Beth Asch and Daniel Clendenning, unpublished RAND research on a policy analysis of reserve retirement reform.

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  • Economics and Cost Analysis
  • Sociology and Law
  • Personnel Management and Labor Relations
  • Military Forces and Organizations

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