Talk of changing military pensions sparks debate

FORT WORTH, Texas – Mant Hawkins is a retired Marine officer and fighter pilot who transitioned seamlessly from the cockpit into the corporate culture several years ago.

Some of the skills he uses today, as CEO of a building services company, he once used as a commander of several thousand Marines in a combat zone. But there is one stark difference that stands out between his two careers: 35 memorial services.

“I don’t know anyone in the business world who has gone to the funerals of 35 people they worked with and knew personally, who looked all those men’s children in the eye and knew they’d grow up without a father,” said Hawkins, who leads Bell Industry, based in Dallas.

This kind of conversation has been common lately among those associated with the all-volunteer military as ideas and proposals are debated in Washington, D.C., to reform the pension package for those who serve a minimum of 20 years.

Driven by the need to cut the defense budget by $450 billion in the next decade, officials have raised the subject of military pensions, which are far more generous than what most Americans receive. The government will spend $50 billion on military retirement just this year, and the number goes up every year as life expectancies improve.

President Barack Obama recently proposed several budget-cutting changes to military retirement to “align government programs with those in the private sector” and to address the “measurable disparity between the fees most retired private-sector workers pay … and what military personnel pay.”

Among the White House proposals is to establish a commission, similar in setup to the Base Realignment and Closure Commission, to recommend changes to the military retirement system, although numerous defense officials have said the system isn’t likely to change for current troops, only those who haven’t joined yet.

Just a few weeks earlier, the Defense Business Board – an influential group of business executives that advises the Defense Department on streamlining and efficiencies – similarly suggested that the military switch to a 401(k) plan that the government contributes to for everyone in the military. That would allow those who serve four or eight years, for instance, to leave the military with a retirement nest egg, which doesn’t happen now. The current system is basically all-or-nothing, and in the view of some experts, unfair for that reason.

But turning military retirement into a 401(k)-style system also would reduce the amount provided to those who serve 20 or more years, which is less than 20 percent of those who enter the military.

“This has some serious ramifications associated with readiness and retention,” said Mike Hayden, deputy director of government relations for the Military Officers Association of America. “It jeopardizes the ability of the military to sustain a top-quality force because of the loss of a career incentive.”

In all of the discussion, perhaps most upsetting to former military and their advocacy groups is the suggestion that benefits packages can or should be compared between civilians and career military members, who have sacrificed much over the past decade.