The First Command Financial Behaviors Index found recently that 70% of middle-class military families who plan on serving at least 20 years and collecting full retirement benefits would prefer the current system to the blended retirement system proposed by the Military Compensation and Retirement Modernization Commission in January.
Currently, members of the military who serve 20 years are eligible for retirement benefits. As of September 2012, less than half of officers and only 17% of enlisted servicemembers remain in the service for that time.
Scott Spiker, CEO of First Command, said in a statement that “defined contribution plans have not worked for middle-class Americans in building a suitable income for retirement. There is no reason to believe they will work for our middle-class military force, either.”
EBRI found that as of 2011, less than half of Americans were covered by a DC plan.
The National Defense Authorization Act for fiscal 2016, which was vetoed by President Barack Obama on Oct. 22, would have reduced the current payout by about 20% with a continuation pay bonus for those who stay in the service past 12 years, according to the Military Times, and introduced an option for servicemembers to take a lump sum payout of their entire retirement benefit at 20 years.
Spiker expressed relief over the veto. “With President Obama’s recent veto of the National Defense Authorization Act, we have additional time to think through the implications of these potentially irreversible changes,” he said.