Panel Urges Overhaul of Future Military Benefits

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A congressionally-appointed commission has recommended overhauling health care and retirement benefits for future members of the armed forces.

The Military Compensation and Retirement Modernization Commission recently produced 15 proposals to change pay and benefits. The commission consisted of former military and political leaders, including former senator Bob Kerrey, a past Concord Coalition co-chair.

Enacting all 15 recommendations, the commission estimates, would decrease federal outlays by $11 billion in nominal terms between 2016 and 2020, with larger savings expected afterwards. 

Pentagon officials and defense experts have warned that current military benefits, particularly in health care, are not sustainable.

When lawmakers created the commission in 2013, they forbid proposals affecting current service members and retirees. With their benefits grandfathered in, the savings from reforms would be limited for the near-term.

For future reservists, working-age retirees, and dependents of active-duty service members and retirees, the commission recommends that the military replace its TRICARE health plan with commercial insurance plans. Coverage for active-duty personnel would not be changed, and their dependents would receive health-care allowances.

The panel also recommended giving all service members access to the thrift savings defined-contribution pension plan available to other federal employees, while retaining a smaller defined-benefit plan for members of the military who serve more than 20 years.

External links:
Military Compensation and Retirement Commission Recommendations
President’s Statement on Commission Recommendations
Defense Secretary’s Statement on Commission Recommendations
Trends in Military Compensation (Bipartisan Policy Center)

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