A Policy Analysis of Reserve Retirement Reform
RAND NATIONAL DEFENSE RESEARCH INST SANTA MONICA CA
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As the burden of defense borne by reserve forces has increased, more attention has been paid to differences between the compensation systems for the reserve and active components. One particular emphasis is on the retirement systems, a key difference being that reserve members who complete 20 years must wait until age 60 to draw their retirement benefits whereas active members can draw their benefits immediately. This monograph provides a policy analysis of reserve retirement reform. It compares the reserve and active retirement systems, discusses the importance of structuring compensation to enable flexibility in managing active and reserve manpower, describes how the debate over reserve retirement reform has differed from active component retirement reform debate, and considers obstacles to reform and how they might be overcome. It also provides a quantitative assessment of several past congressional proposals to change the reserve retirement system in terms of their effects on reserve participation and personnel costs. None of the proposals were actually legislated, although discussions surrounding them led to the fiscal 2008 National Defense Authorization Act, which changed reserve retirement eligibility so that National Guard and Reserve members can begin to receive retirement benefits three months sooner than age 60 for each cumulative period of 90 days served on active duty. These proposals represent the types of changes that continue to be advocated by those who desire to align the reserve retirement system more closely with the active retirement system. The analysis in the report shows the effects of these proposals on reserve participation, as well as their possible effects on active retention, the transition from active to reserve forces, and cost. Early results of this analysis were presented to the Office of the Secretary of Defense OSD and helped to inform the policy discussion about reserve component RC retirement changes.
- Personnel Management and Labor Relations
- Military Forces and Organizations