Military Retirement Pay Cap is Lifted

[280plus]

Military Retirement Pay Cap is Lifted
Week of July 23, 2007

Retiring military personnel - who have had due 30 years of service or more - will no longer have their retirement pay capped at 75 percent of base pay thanks to changes in the National Defense Authorization Act for Fiscal Year 2007. For example, a member who served 32 years will receive 80 percent of their retired pay base and a member who has served 42 years will receive 105 percent of their retired pay base. More detail about the new retirement pay schedule is available from the Defense Finance and Accounting Service

[Leatherneck]

We used to say "I'm now working for half-pay" (at 20 years) or "I'm now working for 1/4 pay" (at 30 years). Now those few who are over 40 years can rightfully observe that they're actually paying the government for the privilege of coming to work. Strange world.

TC

[Moondoggie]

Man, some of those 4 stars are really going to love this.

They're the only ones who get to serve past the 30 year mark...for the most part.

This will encourge some folks to stay around longer, which will effect (slowdown) promotions down the line.

[Leatherneck]

Not the only ones. Next 'cube over holds an AF Colonel with 42 years. The first eight were as an enlisted Marine.

TC

[Gewehr98]

There's a fine balance between punching out and "working for half-pay", vs. staying in to 30 or more and being unattractive to potential employers looking for younger candidates.     

[SomeKid]

Damn, seeing something like this makes me wonder if enlisting at 17 wouldn't have been smarter than college.

[Balog]

So you enlist at 18, stick until you are 60, and then you actually make more as a retiree? "Want a raise? Quite!" Weird.

I thought this was about concurrent receipt of retirement and disability pay. Now that's a change that needs made.

[Gewehr98]

That's happening, Balog.

Only problem is, it has to be combat-related, for now, and is categorized as Combat Related Special Compensation.  That's what I have in the works for my own disability rating:

http://www.military.com/benefits/military-pay/special-pay/combat-related-special-compensation

But there's a move afoot to swing non-combat disability pay out of the pension offset trap, too. It started changing in 2004, but only for a small category of qualified disabled vets, with 50% or higher disability ratings:

http://www.military.com/benefits/military-pay/retired-pay/retired-concurrent-receipt-overview

I just sent off the paperwork to have part of my disability added to my pension, vs. being siphoned off into a separate VA payment as an offset.  Luckily, I had the combat records to include in the package. 

There was a law passed in the late 1800s that precluded disability income from being received concurrently with military pay, in an effort to reduce what was considered double-dipping by Civil War vets. Military retirement benefits were instituted in 1861, and within 30 years Congress banned the receipt of both a military retirement and disability compensation.  Their justification was that a military pension was compensation enough for any disabilities incurred during the individual's term of service.  That stayed in effect until 2004, see above.