In an early indication that Congress is receptive to the significant proposed reforms to the military’s benefits and retirement system, the only challenge raised by the senators reviewing the proposals Tuesday was whether enough military retirees had been surveyed.
The 15 reforms were recommended by the Military Compensation and Retirement Modernization Commission last week. The most significant reforms cover a new 401(k) savings plan members would be automatically enrolled in and a massive overhaul of the way military members and their families get medical care, which the commission estimates would save $31 billion by fiscal 2020.
The reforms are intended to make military service attractive to future soldiers, to even out the disparity between the lifetime retirement benefits received by the relatively few members who serve a full 20 years and the zero retirement benefits soldiers who leave before they receive those benefits, and to improve medical services for military families and their dependents.
In the days since the report’s release, some military associations have begun to protest the proposed change in retirement, saying the promise of a guaranteed, set retirement payment after 20 years of service is what keeps members serving the full 20 years.
Any reform “is laying the groundwork for [a] catastrophic retention crisis,” the executive director of the Fleet Reserve Association said in a prepared statement, suggesting that a “civilianization” of the retirement system would encourage members to depart the military early because they could take their 401(k) with them even if they had not served 20 years.
Any current or retired military member who serves 20 years would be grandfathered under the old system, the commissioners emphasized. The changes would be instituted with new recruits, who would receive career-long financial literacy training to help them with financial planning.
Committee Chairman Sen. John McCain, R-Ariz., said he and the other senators are keeping “an open mind” about what kind of reforms are needed.
“Upholding our sacred obligation [to the military] does not mean resisting change at every turn,” McCain said. “We must not shrink from the opportunity before us to create a modern system of compensation and retirement benefits that would provide greater value and choice to those its serves.”
The other major component of the reforms — replacing the military’s TRICARE heath care system with a subsidy for military families and retirees to shop for heath care among private insurers — similarly did not raise major challenges. Instead, senators highlighted a few areas of specific concerns, questioning whether the reforms would help at-risk soldiers transitioning into retirement and whether the reforms would assist military families with special needs dependents.
For example, members asked how the commission could improve the discrepancy in medical care for soldiers at risk of suicide. The types of prescription drugs that are available to an active duty soldier are different than those available through the Department of Veterans Affairs. That means a service member who has been put on the proper dosage to help him or her deal with pain or post traumatic stress syndrome is at a loss once he enters the VA’s heath care system.
“We’re losing 22 veterans a day to suicide,” said Sen. Joe Donnelly, D-Ind. “In the active duty we lost 132 men and women to combat in 2013. We lost 475 to suicide. So your efforts on this are life-changing.”
Former Army Chief of Staff Peter Chiarelli, one of the commissioners said the proposed reforms supports a transition where there are no differences in the treatments available.
“If there’s anything we could fix to get at this suicide problem, it would be sure that once we get a kid on the right drug, at the right dosage, wherever he goes in the system he is able to get that same drug,” Chiarelli said.
In the only pushback in the first hearing on the proposed reforms, Sen. Lindsey Graham, R-S.C., also asked whether military retirees had been adequately surveyed about whether they would support changes to their retirement care. Under the current contract, service members who retire after 20 years of military service receive TRICARE for life. The proposed changes would transition these members to private medical insurance.
In the following weeks, Graham, who is the chairman of the personnel subcommittee, plans to hold a series of hearings to look deeper into the details of each of the proposed reforms.
