The House of Representatives on Thursday passed a fiscal year 2016 defense spending bill that includes some reforms to the military retirement system.
President Barack Obama has promised to veto the $612 billion bill, which passed 270-156.The bill was produced by a House and Senate conference committee. The Senate will vote on the bill Oct. 5.
The bill seeks to address an estimated 83% of service members who leave in less than 20 years before vesting in the military’s defined benefit system. Those staying 20 years or more would see their benefits cut 20%. Beginning in 2018, new service members would be required contribute to the Thrift Savings Plan with matching contributions from the Department of Defense. Existing members will also be able to contribute to the TSP with matching contributions.
The new system would be mandatory for new people enlisting after Jan. 1, 2018.
Members with 12 years of service could also take a lump-sum payment upon separation. The lump-sum option is reminiscent of 1986 changes that had to be repealed a decade later because it hurt retention and readiness, the Military Officers Association of America said in a statement.
The bill incorporates some of the recommendations made in a Jan. 29 report by the Military Compensation and Retirement Modernization Commission.
