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Jo Ann Rooney, DOD: Keep Faith on Military Retirement

October 27, 2011

The Defense Department has no proposals or recommendations on revamping military retirement at this time, but any future proposal must not break faith with those in the military today, senior Pentagon officials told Congress yesterday.

Jo Ann Rooney, principal deputy undersecretary of defense for personnel and readiness, and Vee Penrod, deputy assistant secretary of defense for military personnel policy, testified on military retirement before the House Armed Services Committee’s military personnel subcommittee.

The Defense Business Board has proposed making a military retirement system more like private-sector systems. The military system has remained fairly constant over time, Rooney said, while the private sector has changed its retirement systems to cater to the increasingly mobile workforce.

“Unlike [the private] sector, the military services must grow most of their military workforce internally,” she said. “It generally takes 15 to 20 years to develop the next generation of infantry battalion commanders and submarine captains. As a result, the military must ensure compensation, promotions and personnel policies that all foster the retention and longer careers necessary to create these experienced leaders.”

The military, she said, needs greater longevity and continuity to develop leaders, and a retirement system mirroring a private-sector approach -- with contributions from individuals and transportable benefits -- may not be the best way for the uniformed services to go.

This does not mean that the current system is sacrosanct, Rooney said. The department should examine the retirement system in the context of a total military compensation system, she added.

DOD officials, she told the panel, are examining all aspects of the retirement system for all components. Rooney said the review has been deliberate, careful and pragmatic, and that officials are reviewing proposals and modeling them to determine the impact on recruiting and retention.

The Defense Department, she said, is working to strike the correct balance. “This includes weighing the impact of a new system on recruiting and retention, considering the welfare of the individual service members and families -- which includes grandfathering our existing force who took their oath under the current system -- and acknowledging our responsibility to the American taxpayer,” she said.

The current military retirement system has supported the most-successful volunteer force in the world, Penrod noted.

“The question now,” Penrod added, “is whether the current system is still relevant in today’s environment. If not, should it be modified in a manner more in line with the private sector?”

Officials are not looking at retirement in isolation, Penrod pointed out, but rather at how personnel and pay policies affect decisions to join the military and then to stay.

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