Panel Proposes Overhauling Military Retirement & Tricare
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 dollars annually.
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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