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Key Elements of A New Defined Contribution Plan

The following information is part of a presentation by the Defense Business Board about Modernizing the Military Retirement System dated July 21, 2011.  You can find the first slide in the presentation here.


  • Establish a mandatory TSP program for all Military Service Personnel
    • The government contribution, including extra incentives, 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, payable at age 60 to 65 (or Social Security age)
    • Partial withdrawals (or loans) to cover education, healthcare, or other specified emergencies
  • Plan would be risk adjusted to recognize combat roles, family separation, and other unusual duty, for example:
    • Double contributions for years in combat zones or high risk positions
    • Greater contributions for hardship tours
    • Retirement age could be lowered using similar metrics
  • Like most private sector severance plans, the option of a time formulated transition payment should be considered to facilitate the change to a new career
  • Comprehensive solution would apply to reserve as well as active duty personnel


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