Pentagon offers pension-reduction plans
Under orders from Congress, the Pentagon has reluctantly come up with a proposal to cut military pensions, even though Defense Secretary Caspar Weinberger says any benefit cuts will hurt recruiting and troop morale. None of the changes announced Wednesday would affect the 1.1 million people receiving pensions or the retirement plans for any of the 2.1 million people now in uniform.Skip to next paragraph
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The reductions were ordered by Congress last summer in response to increasing complaints that the military pension system was too generous.
Under the present system, military personnel can retire after 20 years' service and receive up to 50 percent of their base pay, a figure that rises to 75 percent if they remain in for 30 years. People serving less than 20 years receive no pension.
Congress ordered the Pentagon to come up with two systems for reducing future benefits.
Under one option, the maximum after 20 years would be cut from 50 percent to 36.3 percent of basic pay with full cost-of-living adjustments in the future. The second plan would limit the 20-year rate to 39.8 percent but would reduce future cost-of-living increases.
The pension system cost the federal government $17.4 billion in the last fiscal year and was scheduled to increase to $18.2 billion in fiscal 1986. Congress ordered that amount cut by $2.9 billion, to $15.3 billion.
Congressional critics, including Rep. Les Aspin (D) of Wisconsin, chairman of the House Armed Services Committee, say that unless future pensions are reduced, the system will cost $45 billion a year by the end of the century.