The 20-Year Military Retirement System Needs Reform

FPCD-77-81: Published: Mar 13, 1978. Publicly Released: Mar 13, 1978.

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Members of the Armed Forces can retire at any age after 20 years of service. The Department of Defense (DOD) justifies this length of service as necessary to retain a young and vigorous force and attract and retain servicemen. DOD uses a competitive promotion system which precludes most military members from serving full careers and must, by law, retire officers who have been passed over for promotion or who reach a certain age. Since their careers could end in the middle of their potential worklife, DOD believes military members need the assurance of early retirement benefits.

In fiscal year 1975, officers retired at an average age of 46 after about 24 years of service, and enlisted personnel retired at an average age of 41 after approximately 21 years of service. Most fiscal year 1975 retirees' career time was spent in occupations not demanding exceptional youth and vigor. In fact, 81 percent of the enlisted member retirees and 30 percent of the officers spent their entire careers in non-combat-related occupations. The 20-year retirement provision should be discontinued for many military personnel in occupations not demanding exceptional youth and vigor. Twenty-year retirement, in conjunction with present personnel management policies, is an inefficient means of attracting new members, causes the services to retain more members than are needed up to the 20-year point, provides too strong an incentive for experienced personnel to leave after serving 20 years, and makes it impossible for the vast majority of members to serve full careers.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should: revise the military retirement system length-of-service criterion, based on the type of duty performed; revise the retired pay system to encourage appropriate career lengths, based on duties performed; and provide some form of vesting for members who do not complete full careers. Congress should charge DOD with the responsibility for determining what specific occupational skills require youth and vigor, a more cost-effective force profile that considers longer careers for skills not requiring youth and vigor, and a more efficient method of retaining required personnel. In computing retired pay, Congress should revise the military retirement system to eliminate the use of constructive service and rounding to the nearest year of service; rounding to the nearest month should be used.

 

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