Military Groups Feel Betrayed by Budget Pension Cuts

Thursday, 12 Dec 2013 08:33 PM

By Cynthia Fagen

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Military retirees could lose up to $124,000 in retirement income if the budget agreement is passed, according to the Military Officers Association of America, The Washington Free Beacon reports.

Military retirees younger than 62 will receive 1 percent less in their annual cost-of-living adjustment under the bi-partisan budget agreement that could mean thousands of dollars in lost retirement income.

The 1 percent cut saves $6 billion, according to the Congressional Budget Office.

New federal workers hired after Jan.1 , will be required to pay 1.3 percent more of their pay into their pension plans. Federal retirees will not be affected. Current civilian government workers will be grandfathered in at their current contribution rate of 0.8 percent.

According to the MOAA, the nation’s largest association of military officers, the budget proposal would have a significant impact on military retirees, including many who retire in their 40s after two decades of service.

A 42-year-old who retires as an enlisted E-7 — which includes sergeant first class, chief petty officer, master sergeant, and gunnery sergeant — could lose a minimum of $72,000.
Lieutenant colonels and commanders (an O-5 rank) who retire at 40 would lose $124,000.

In 2012, the Pentagon spent $52.4 billion on 2.3 million military retirees and survivors, and the cost is expected to rise over the next few decades, according to the Department of Defense Office of the Actuary, CNN Money reports.

House budget chief Rep. Paul Ryan's website states that military retirement "provides an exceptionally generous benefit, often providing 40 years of pension payments in return for 20 years of service," an explanation as to why benefits should be trimmed.

“I do not support paying for increased federal spending on the backs of our retired and active duty troops,” said Sen. Roger Wicker,  R- Miss., Thursday. “Congress should not change the rules in the middle of the game for those who have chosen to serve our nation in the military.”

Sen. Lindsey Graham,  R- S.C., a member of the Senate Armed Services Committee, called the deal “unacceptable.”

“I believe it will do disproportionate harm to our military retirees. Our men and women in uniform have served admirably during some of our nation’s most troubling times. They deserve more from us in their retirement than this agreement provides," said Graham.

Sen. James Inhofe, R- Okla., the ranking Republican on the Armed Services Committee, said the military retiree provision would have to be removed before he could vote for it.

Sen. Kelly Ayotte, R-N.H., said to look elsewhere to cut. "My hope is that both parties can work together to replace these unfair cuts that impact our men and women in uniform with more responsible savings, such as the billions that the Government Accountability Office has identified in waste, duplication and fraud across the federal government.”

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