The United States could slash military pension costs up to $13 billion annually by the year 2000 by adopting tough new retirement standards being considered by a special presidential commissioner a study by the Congressional Budget Office indicated yesterday.
The nine-member commision reportedly is "leaning toward" requiring servicemen and women to reach age 55 and serve at least 30 years to qualify for full retirement benefits. Shorter service would be compensated on a reduced basis.
Some panel members believe the current system lets personnel retire too young, at too great a cost to the government.
At present, carrer military personnel can retire at any age after 20 years odservice and recieve half pay. About three-quater of them do so and then draw checks for an average of 33 years.
The typical such enlistec is 39 to 40 at retirement and will collect $190,000 in military pensions.
The Congressional Budget Office said that if this system continues, the military pension program will cost over $9 billion this year and will rise to about $375 billion (in year 2000) by the end of the century.
CBO staff member Robert Hale estimated that one possible version of the age 55/30 year plan if put into effect after a phase-in period, would cut the $37.5 billion figure to about $24 billion annually by 2000.
Under the plan, which not apply pension for voluntary military retirement would be payable before age 55 - and then only to those with a minimum of 30 years of service. The rate would be 75 per cent of pay. Those with shorter service could receive pensions (at a lower rate) at 60 or 62, depending on length of service.
A typical 20-year retired enlistee, under this proposal, wuold get only $65,000 (in constant dollars) in pension benefits over his lifetime.
One effect of the plan would be to stimulate non-commissioned officers to stay in the armed forces for longer periods instead of retire after 20 years.
The CBO study said that many military officers believe wiping out the right to retire after 20 years at half pay could retard enlistments, and that the older average age would make for a less effective combat force. But the study said others believe older personnel can handle most of the needed jobs and that the age change might not be harmful.
The CBO also studied two other possible tightenings of the military pension system and said substantial savings could be realized from them without severely raising the average age of military personnel.
Under one plan, the least-harsh possible change studied, the servicemen or women could still retire after 20 years regardless of age, but such a pension after other minor adjustments would be 30 per cent below the half-pay standard. After 10 years in retirement, it would go up to the half pay level.
For example, an army master sergeant retiring now after 20 years under the current system gets $5,800 a year in benefits at the half-pay rate. Under this alternative plan, he'd get $4,010 for 10 years, then go up to about $5,800. Overall the lifetime take of a typical 20-year enlisted man would be $155,000.
This plan, according to the CBO study, would save in the vicinity of one-third the 55/30 plan. It was originally drafted by a Defense Department study group in 1972.
A third plan would save about half what the 55/30 plan would. It would allow a 20-year man to retire at any age, but drop his benefit from 34 per cent to 42 per cent below half-pay until he reaches 60, thus reducing the typical 20-year enlistee from $5,800 a year for those years to $3,110. He'd end up with $110,000 overall. This plan was recommended by an intergency committee in 1971.