Last fall, the Department of Defense floated the idea that one way to fix the long-term sequester cuts would be to make military retirees ineligible for civil service pensions.
In its simplest terms, it means the Pentagon would save money by not contributing to a military retiree’s Federal Employees Retirement System or Civil Service Retirement System account should they decide to continue their DoD service as a civilian employee, said Larry Korb, who oversaw manpower issues as an assistant Defense secretary during the Reagan administration.
More than half of the DoD’s budget goes toward pay and benefits for its personnel, which makes it an easy target for budget cuts. According to the Office of Personnel Management, more than 134,000 military retirees held DoD civilian jobs as of last March, which means this change has the potential to save large sums of money.
“Strategic Choices and Management Review”
Defense Secretary Chuck Hagel explained that savings could be $100 billion over 10 years when combined with a halt to commissary subsidies and restrictions on availability of unemployment benefits, as reported in Federal Times. These recommendations are listed in the “Strategic Choices and Management Review.”
There’s no denying the savings, but there’s a big issue with the morality of denying someone compensation because they previously served their country in a uniform.
Do I understand the argument that one organization shouldn’t pay the same person twice for retirement, or “double-dip” as they say? Sure, I can kind of see their point. But that doesn’t mean I agree with it.
Here’s the thing. If we gave identical jobs to both a military retiree and a civilian without any prior service, wouldn’t you agree that they’re doing the same amount of work? And if they’re both managing the same workload, on-call hours and responsibilities, why does only one get retirement compensation? Aren’t both parties earning their pay?
A retirement you can live on?
Now some of you may think that one retirement should be enough to live on, but when you crunch the numbers it’s unlikely. Active duty service members can retire once they hit 20 years of service, but their retirement pay will only be a percentage of their previous salary. Now factor in that someone who joined in their mid-20’s is now in their mid-40’s and you have a math problem. Is it possible to live off half of your salary for the rest of your life, say another 40 or 50 years? Not likely. So many military retirees start a second career and because of experience, may end up in civil service.
Currently, military retirees who take DoD civilian jobs have two options. One, they can forfeit their military retirement and use those years of service as credit toward a civil service pension. Or two, they can keep their military retirement pay and start fresh in civil service, according to the OPM. To go from these options to zero retirement compensation seems harsh at best.
Hopefully the DoD will realize that by shortchanging military retirees, they’d only be shortchanging themselves. Military retirees have an extensive knowledge of the organization and its needs, often have unique skill sets and have proven leadership experience. Aren’t these the type of people we want in the DoD system? Take away their potential pensions and my guess is they’ll pack up their bags and take their skills to the private sector where they will be fairly compensated.
So when discussions ramp up again, I hope the DoD remembers the old adage that still holds true today: you get what you pay for.
