Military's 1-Year 'Look Back' Retirement Provision Should Be Revoked
Highlights
An administration proposal to reform the military retirement system is pending before Congress. Among other things, this proposal seeks to eliminate one of two "look back" provisions currently in effect. The provision to be eliminated allows new retirees to look back one previous pay scale for the purpose of calculating initial retired pay, plus the intervening retired pay cost-of-living adjustments. The second provision allows new retirees' initial retired pay to be calculated by using any previous active duty pay scale in effect on or after January 1, 1971, but at the grade and longevity step at which the member was eligible to retire at under the previous pay scale. Because both provisions affect the retirement system's cost and equity, GAO conducted a review to determine whether the administration's position to eliminate the first provision was justified and to determine if the services can justify the continued use of either provision.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should repeal the 1-year "look back" provision authorized in 10 U.S.C. 1401a(e). |
Closed – Implemented
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When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Secretary of Defense should task the services with developing data by September 30, 1983, to show whether retention of senior careerists well beyond 20 years of service has been or is expected to be a problem and if the multiyear "look back" is cost-effective and necessary for dealing with the problem, if the administration's legislative proposal is not enacted. |
Closed – Not Implemented
DOD strongly opposed the recommendation to validate the cost-effectiveness of the multiyear "look back"; however, no followup action was warranted in view of the total examination of the military retirement system being performed by the 5th Quadrennial Review of Military Compensations and by the House Committee on Armed Services.
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| Department of Defense | The Secretary of Defense should prepare and submit to Congress a legislative proposal to repeal 10 U.S.C.1401a(f), if the services cannot document the need and cost-effectiveness of the multiyear "look back" provision. The repeal provision should contain a provision that the retired pay for individuals who retire after the effective date of repeal would be less than it would have been had they retired on the day before the effective date of revocation. Further, if the Secretary of Defense determines that adequate alternatives are not available to retain those senior officers the services want and need to remain on active duty, he should seek legislative authority for a suitable alternative to be used selectively. |
Closed – Not Implemented
DOD strongly opposed the recommendation to validate the cost-effectiveness of multiyear "look back;" however, no followup action was warranted in view of the total examination of the military retirement system being performed by the 5th Quadrennial Review of Military Compensation and by the House Committee on Armed Services.
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