A presidential commission yesterday recommended a series of money-saving changes in the military pay and retirement system, the most important of which would force military retirees to wait until they are at least 55 before they could begin drawing a pension.
The proposed changes, an attempt to gain control of rising military retirement costs, would end the tradition of 20-year retirements, under relatively young officers and enlisted personnel are eligible for full pension benefits after 20 years of service. Military retirement costs, projected to reach $100 billion a year in about 40 years, now account for about one-twelfth of the Defense Department budget.
However, because the commission proposed exempting the current generation of officiers and enlisted personnel from the changes, the new retirement system it recommended would not begin to reduce costs until the next century. Until then, the new system actually would cost more.
The commission recommended an end to the practice of "double dipping," under which military retirees who go to work for the federal government continue to draw a military pension.
It also urged retention of the system of pay and allowances for military personnel, with additional incentives for those who go into certain military specialities.
President Carter has long advoated revising the military retirement system and has been particularly critical of the "double-dipping" practice. Yesterday, he promised to study the commission's report "very thoroughly," without committing himself to any of its recommendations.
To make the proposed retirement system changes more politically palatable, the commission suggested that they not apply to military personnel with more than four years service, in effect exempting the current generation of officers and enlisted men and women. Nor would the changes apply to those who have already retired.
The changes proposed by the commission would require legislation. The president is not bound to recommend any of the changes, not is there any certainty that Congress would enact a sweeping revision in the military retirement system.
Charles J. Zwick, a Florida banker who headed the commission's 10-month study, said there is general support for revising the military pay and retirement system but no clear agreement on specific points.
"I think there is a general recognition on [Capitol] Hill that something must be done," he said.
In a statement that accompanied the report, Zwick declared that "military compensation is in serious trouble."
"The current military compensation system is very expensive. It is unfair to a majority of the troops. It is ill-suited to manage a force of 2 million men and women in rapidly changing conditions. And, more importantly, it will be still less effective in the 1980s as manpower supplies shrink."
The commission's most controversial recommendations by far concerned the retirement system, which this fiscal year will cost $9.2 billion.
Under the existing system, officers and enlisted personnel can retire with a pension after 20 years' service, regardless of age. If they retire earlier, they receive nothing. As a result, the commission noted in its report, there is a strong incentive to put in 20 years in the military, but little incentive to remain on active duty beyond that point.
The 20-year retirement practice has allowed thousands of military personnel to retire in their 40s, begin a second career in civilian life and, in the case of the "double dippers," receive a salary from the same source (the federal government) that is paying their military pension.
The commission's recommendations would end this by modeling the military retirement system after the Civil Service one, with benefits beginning at age 55 for those with 30 years' or more service, age 60 for those with 20 to 29 years' service and age 62 for those with 10 to 19 years' service.
Other recommendations by the commission included:
Reducing military pensions by up to 50 percent when retirees begin to receive Social Security benefits.
Establishing a deferred compensation trust fund, paid for by the government, for all military personnel with five years' service. After 10 years' service, those who leave the military would be paid the amount in their trust account.
Providing severance pay to enlisted personnel as well as officers, who now receive severance pay when forced to leave the military.
Retaining medical, PX and commissary benefits for retirees.
According to the commission's report, by 2020 the changes it recommended in pay and benefits for active-duty personnel would cost $570 million more than under the current system. But this would be more than offset by a $4.7 billion savings in the retirement system.
However, until shortly after the turn of the century, the retirement system proposed by the commission would cost about $1 billion a year more than the existing system.