New Retirement System For Military Rollout

A new retirement system is being rolled out by DoD to help provide added benefits to troops who do not plan on staying in long enough to retire and for those who have determined it is their career path.

For too long we have seen how the last administration reduced and often demeaned the troops as well as how his administration’s lax and often criminal habits toward military personnel have created a toxic atmosphere there. This came as a welcome change in the last days of his administration that actually made it into the 2016 budget.

Hopefully with careful consideration, planning, implementation, and oversight, this will prove to be a great incentive and relief just like reforming the veterans healthcare looks to be under Trump as he continues to honor his promises before he was elected. | Aug 11, 2016 | by Brendan McGarry (tap for article)


Pentagon Spells Out Details of Troops’ New Retirement System

Government Executive posted today an article about a new “Retirement System for Troops” that sounds promising.

“The plan was developed and put in motion under Defense Secretary Ashe Carter. It is scheduled to be phased in and take effect in 2018.

The changes were included in the fiscal 2016 Defense authorization bill as the result of a longstanding effort to reform military service members’ compensation package. Deputy Defense Secretary Robert Work, a Obama appointee who President Trump asked to stay on, officially issued the policy that will take effect in 2018.

Under the system, new troops would automatically be enrolled in the Thrift Savings Plan and receive a matching contribution from the government. The government will contribute between 1 percent and 5 percent of service members’ salaries toward their TSPs, depending on what they elect to contribute themselves, though they will be defaulted into contributing 3 percent of their paychecks. The TSP account will begin 60 days into their service. Those who stay in the military for 20 years, and are thereby entitled to a retirement pension, would receive a less generous calculation for their annuity.”


In February 2016, Department of Defense added an article to their website concerning this change.

“Upon taking office almost a year ago, Defense Secretary Ash Carter promised reforms, saying “that a blended retirement system is a key step in modernizing the department’s ability to recruit, retain and maintain the talent we require of our future force.”

An overhaul of the current military retirement system is slated to take effect January 1, 2018. The new system has three elements: a 401(k)-style component with Defense Department matching funds for entry-level and other service members, a mid-career continuity bonus, and a retirement annuity similar to the one now in place for service members that complete twenty or more years of eligible service.

Training the Force on Retirement Options

The first critical step in the change, he said, is educating senior leaders about the program’s provisions. Those leaders will then ensure training takes place at the “camps, posts and stations” where service members work.

Training tools now in the works will include online classes and benefits calculators for troops and their families, as well as classroom and distance learning, Schultz added.

He said the “deliberate approach to educate the force” will be a key effort from now until rollout.

Grandfathering and Opting In

The sergeant major said the question he hears most often about blended retirement is: “What will it mean to me?”

First, he said, all troops now serving are grandfathered and will be allowed to remain in the current system.

Those who have served in uniform for fewer than 12 years as of December 31, 2017, will have a choice to stay in the current system or to opt into the new retirement plan, Schultz said, and those who enter service after the blended retirement rolls out will automatically be covered by the new modernized retirement system.

Incentives, ‘Portability’ Built In

The phase-in will, Schultz noted, both keep faith with those who could retire under the current system, and offer new options for what he termed a “portable” retirement benefit plan to those who will serve in the future.

The aspects that make the plan “blended” are automatic and matching government contributions in the Thrift Savings Plan, similar to a 401(k) and transferable on leaving service, for service members in the new retirement plan, and retaining lifetime monthly retired pay for those who serve at least 20 years.

The government will automatically contribute 1 percent of a member’s basic pay into the member’s TSP account even if the member contributes nothing. After 24 months of service, the government will match member contributions, dollar-for-dollar, up to the first 3 percent the member contributes and fifty cents per dollar for the next 2 percent the member contributes.”

If military people or retirees haven’t learned about this new system yet, I would urge you to find out more. Go to the following site to see the DoD video at


Many businesses have similar types of retirement plans that have been rolled out over the years. Without knowing what current retirement benefits are for military, I do know that no matter what EVERYONE needs at least two fallback systems for retirement.

In 1990 or so when I attended a retirement meeting for teachers, we were flat out warned that in coming years depending on a teacher’s retirement check alone was not going to provide even basic needs. In addition, in the state I taught at the time, possibly even now, teachers did not have social security paid out of their checks so at retirement that was not a main option if other outside employment had not paid into the system.

Those I knew who have left military service did not stay unemployed. They had families depending on them to provide for daily expenses. Retirement levels of payment did not even scratch the service if I recall their conversations correctly.

I do not know anything about this new system for military but every person needs to find out as much as they can regardless of military status about how their own retirement will shape up in the days and years to come. I know firsthand how I was caught up short and had to fall back on only social security checks, even though I worked for great companies in the oil industry in addition to the education field until I had to retire for disability reasons. I doubt my story is unique.

The fact is no one but YOU can know the right choice for your future.  But YOU have to be savvy enough to understand that life is messy, things happen and planning for your future is important. There are a lot of people out there with a lot of “helpful” schemes but consulting with experts does help to figure out the basics. When we are beginning the journey into adulthood, we don’t see beyond the current crisis or daily activities.  As a retiree, I now think back and wonder where I could have done anything differently. 

This is an encouraging sign that the military is trying to move to help their people.  Whether it is feasible, I have no idea; but, it does sound reasonable and very similar to many non-military companies which is encouraging. Advocating for military personnel improvements and health benefits has never been more necessary as we have seen over the last eight years or more. 

Hopefully Trump’s new cabinet members will address this issue of health and other benefits for all so that the crisis for military, like the Obamacare, doesn’t adversely punish or effect service members.


About Uriel

Retired educator and constitutionalist
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8 Responses to New Retirement System For Military Rollout

  1. GunnyG says:

    There was nothing wrong with the old system of 50% at 20, 75% at 30. It ensured that continuity and experience was maintained and kept in the service to ensure that what was learned was passed on. Then the goddamn civilian slime on BOTH sides, who never served a day, got in there and F-D it up.

  2. Popular Front says:

    After my 30 years service, my ‘pension’ gives me a comfortable – not lavish – living. I’m fairly frugal by nature anyway, I don’t need toys and trinkets. Gas in the tank, beer in the fridge and bread on the table and I’m just fine.

    To attract young people into military service, which is still a necessity like it or not, you have to demonstrate that you will look after your people, in service and afterwards. A decent pension plan based on time in service, the best possible health care during and after (which should be free) and tax breaks, big ones.

    • Uriel says:

      Good point Popular especially given the current discussion by all citizens on how best to plan for retirement. Millennials to under 30ish have had an opportunity to see videos discussing and some to be in companies who have such accounts so they grew up with this.

  3. HW Safford says:

    When I enlisted (March 10, 1965) I was promised 50% base pay at 20 years, and 2.5% fro each year thereafter up to 35 years. I was also promised military medical and dental and vision for myself and my wife for the rest of my life. Vision, hearing and dental were taken away, and I was forced onto Medicare when I hit 65. TirCare is OK, but it is no longer primary, it comes after Medicare. I want my promised retirement back.

    • Uriel says:

      Ouch. I know one or two others at least that it happened to as well sir. I truly pray any new changes are for the better and really do help veterans such as yourself. Any of Enforcement and military who daily put their very lives and those of their families at great risk deserve far better.

      Welcome to Hardnox several here are retired and/or military retired as I am sure you can tell, lol.

  4. HW Safford says:

    Related comment – this type of roll-out/changeover is how they should consider revising Medicare and Social Security. Let people under 18 start the new system; let those 19-40 have the option of the old or the new; and those 40 and over keep theirs as is, unchanged.

    • Uriel says:

      HW. I believe this has been discussed over the past few years. I would think it a better plan for younger adults. Many don’t like manipulation and hold a hearty distrust after seeing their elders go through. I chose an add on insurance who gets paid by Mediare and Medicaid and as yet have had little trouble compared to my friends. My second son had medical savings and childcare as well back in DC area with his company.