A panel put together to review the military’s compensation and retirement
systems has come forward with their list of 15 proposals, with most of
these proposals focusing on retirement and healthcare options. The suggested
cut would look to control the costs of personnel spending by $12 billion
One of the major proposals would be doing away with Tricare and replacing
it with several options for insurance, in a move that would mirror what
is already offered to civilian employees. The intent of this proposed
overhaul is to provide military families with a broader array of medical
services and quicker response times.
The proposals also take aim at the military retirement system that has
been in place for over five decades; that says if you serve for 20 years
or more then you can retire and immediately begin receiving pension benefits.
Under the newly proposed system there would be incentive to be enrolled
into the Thrift Savings Plan (TSP), which is similar to a 401k.
The TSP would allow for government matching funds and the choice for a
lump sum payment or for it to be doled out over time with a much smaller
pension. A military member with a TSP, which is currently optional, would
be able to transfer their TSP to a private 401k - with no penalties. This
would enable younger members of the military, who separate prior to 20
years, to better prepare for their future.
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