The new Military retirement plan would be based on the existing Uniformed Military Personnel Thrift Savings Plan (TSP), but with the government providing annual contributions.
Payments into the plan by the Government would include an option for military member contributions and the accounts would be transportable into the private sector and back into the military. DoD contributions could vary depending on circumstances, such as larger contributions for personnel at risk or on hardship tours.
A mandatory TSP program would be established for all Military Service Personnel and the Government would add a defined contribution which would be funded at a percentage level comparable to the highest end of a private sector pension plan. The plan would vest after 3 to 5 years and would be payable at age 60 to 65 (or Social Security age). Before the age when the retirement money is payable, partial withdrawals (or loans) to cover education, healthcare, or other specified emergencies would be available.
The new Military Retirement Plan would be risk adjusted to recognize combat roles, family separation, and other unusual duty such as double contributions for years in combat zones or high risk positions and greater contributions for hardship tours.
There are several individual features that would be available such as:
Based on information received, the Government would contribute a percentage of the Servicemember's base pay towards retirement (estimated right now at about 16%), adjust contributions based on high risk jobs and hardship tours,
When the new Military Retirement Plan is started, Implementation would be phased-in to ensure current military personnel are treated fairly with due consideration to cost, all military personnel will earn retirement benefits, costs will be far more manageable in future years, contributions would be flexible and reward longer service, high risk assignments, and family separation, retired and disabled members would be unaffected and they would still receive current benefits.
It is rumored that personnel already serving would receive a portion of their earned retirement benefit under the old (current) system provided they serve at least 20 years. For example, a Servicemember with 10 years in at the start of the new Military retirement plan would not only start accruing the defined contribution from the Government, but would receive half the retirement pay they would have earned at 20 under the old plan (20 years of service = 50%, so 10 years of service (half) would be 25%)