Primary elements of the costs of military personnel include pay and benefits during military service, and retirement and health care benefits paid to qualified personnel after leaving the military. This report focuses on retirement benefits. Public Law PL 9894, enacted in 1984 and implemented in fiscal year FY 1985, mandated accrual accounting to fund the military retirement benefit liability and specified the use of the aggregate entry-age normal accounting method. Before PL9894, the amount appearing in the Department of Defense DoDbudget for military retirement was the annual payment to current military retirees military retirement was a pay-as-you-go PAYGO system. The shift to accrual accounting sought to meet the objective of recognizing in the current budget the cost of future retirement benefits associated with current manning decisions.