Adapting to a New Generation

If all the proposals of the Military Compensation and Retirement Modernization Commission are adopted, the value of a service member’s compensation in all scenarios would only go up, several members of the commission told reporters and members of the public on Thursday during the rollout in Arlington, Va. Chairman Alphonso Maldon said over time the Defense Department and the government could save as much as $12.5 billion a year if all recommendations are implemented. Maldon noted that in most cost models, it is “more efficient” to give service members money before they retire, whether through health care spending accounts or matching 401(k) funds. It also generates better retention incentives and lower overall costs to the government. Most of the eventual savings come from the changes proposed to the TRICARE system and health care, combined with retirement reforms and changes to the commissary system, he added. Though the commission did not speculate on how receptive Congress would be to the proposals, they noted the recommendations are culled from countless conversations and hearings with service members who wanted to see more flexibility in managing their own benefits. Commissioner Michael Higgins said the changes respond to the “demands of a new generation” of service members, and sets out a “path of change” to the existing system, which could pay off over the long run. (President Obama’s statement) (Defense Secretary Chuck Hagel’s statement) (Link to final report; Caution, large-sized file).