Early Retirements in the Future?

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MSG Glenn
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Joined: 08/31/2010

Congress ahead of curve on early-out options

In an all-too-rare display of prudent planning, Congress jumped in front of potential military personnel cuts, approving a set of measures that will help the services reshape the force without breaking faith with the troops.

Lawmakers reauthorized three programs used in the post-Cold War drawdown of the 1990s, and extended a fourth that was set to expire. These measures are now allowable, at the discretion of Pentagon leaders, through 2018: ■ Early retirement. A reduced retirement benefit for troops leaving after at least 15 years of service but short of the 20 typically required.

■ Two types of voluntary buyouts.

■ Separations up to a year early for enlisted members.

It is unclear at this stage whether the services will use these tools and, if so, who may be eligible. It’s also unclear whether the services will heed the lessons learned from mistakes made in the 1990s, when the force was cut by one-third — a cut that, in percentage terms, was as much as three times what the services may now be facing.

The Army opened up early separation incentives too broadly in the ’90s, only to have to boost recruiting in the midst of a drawdown to make up for the shortfall. The Air Force forced some officers to return to the enlisted ranks to finish their careers. The Navy and Marine Corps shrunk their promotion zones, severely limiting the number of people who were considered for advancement. The newly approved incentives are generous. One of the buyout programs, Voluntary Separation Pay, can total up to four times the current rate of involuntary separation pay. For an E-7 with 10 years of service, for example, that would yield a payment of $170,624.

The other buyout program, aimed at retirement-eligible officers with 20 to 29 years of service, would offer up to a year of basic pay for those who agree to leave immediately. For an O-6 with 22 years of service, that would be worth $113,587.

Early retirement for members with 15 to 20 years of service would offer the same type of annuity as regular retirement, at a reduced level.

Instead of the traditional benchmark of 50 percent of basic pay for 20 years, someone with 15 years of service would receive about 35.6 percent of basic pay, adjusted each year for inflation for the rest of their lives — along with all the other standard lifetime bene­fits such as military health care, commissary and exchange privileges, and more.

These incentives should be generous because they’re supposed to entice people to want to quit. But that means they must also be offered sparingly, lest too many people leave — especially in criti­cally needed skills — gutting the force rather than helping it slim down.

Doing that will take time, planning and great care. Service leaders must avoid across-the-board cuts that rack up big numbers fast but leave a mess for someone else to clean up afterward. History shows it can take years to recover from such a misguided campaign.

Some leaders may balk at wanting to use these tools, but they should not. Carefully targeted early-out incentives are the best and fairest way to scale down the force while keeping faith with those who volunteer to serve our country.

These incentives must be offered sparingly, lest too many people leave — especially in critically needed skills — gutting the force rather than helping it slim down.

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admin
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Joined: 12/21/2009
Thanks!

Thanks MSG Glenn, for this concise summary of what is going on, and what the Army could be planning on doing with their current personnel. This is really important information for people looking to enlist, and people who are currently serving.

Thanks!

MSG Glenn
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Joined: 08/31/2010
You're welcome, Admin

When I hear something that's verifiable during my research I like to pass it on. Even the odd rumor - but then I'll say something to the affect that "I heard that..." or "somebody (such as a Recruiter) told me...". I make sure that I say that so if it turns out to be wrong info I'm not considered a liar. I'm in the process of "taming" some local Recruiters & hopefully will be able to get some up-to-date info. I've been hesitant doing that because these days they're just too busy but I figure that a cup of coffee & a little of idle chit chat now & then might work. When I was on the Sergeant Major of the Army's Recruiting Team several years ago I had an open door at the local Recruiting Center but all of those Recruiters have been reassigned. Since I got those guys 25 recruits during the time when Recruiting was much slower I was welcomed warmly.