What are the pros and cons of the new military retirement system Research Paper

What are the pros and cons of the new military retirement system - Research Paper Example Retirement from services is the common end to all professions, whether in financial services, educational services, government jobs, or jobs in the defense sector. However, the provisions and procedure of retirement varies from sector to sector and across time periods. The retirement policies followed in the military system, too, has varied greatly with the passage of time. There are large differences between the retirement policies followed by the military in earlier times and the ones practiced in the 20th century. The greatest attraction of a strenuous military career has always been the benefits and incentives offered on retirement. Since the earlier periods, through the World War II era to the current times, dialogues have been exchanged on the subject of reform of the military retirement schemes. The primary focus of all these meetings and discussions was to reduce the government expenditure on the military system, by reducing the monetary compensation paid to the retirees. How ever, it is interesting to observe â€Å"that of the dozens of study groups, commissions, committees, boards, task forces, and the like that have recommended making major structural cuts, only one such has been enacted into law, in 1986 -- and that was essentially repealed (i.e., its cuts made voluntary) in 1999, seven years before it would become effective†. ... The retirement allowance of the active military personell is based on the longevity of their services. Usually, after 20 years of services a person is allowed to retire and enjoy pensions and benefits. The retirement decision of the disabled retirees, on the other hand, may depend on the longevity of service or the degree of disability suffered. The monthly annuity of retirees is calculated on the basis of Cost-Of-Living-Allowances (COLA), which ensures that their income is guaranteed against inflationary trends. These monetary benefits are accompanied by some non-monetary benefits â€Å"which include exchange and commissary privileges, medical care through TRICARE, and access to Morale, Welfare and Recreation facilities and programs† (Henning, 2008) The old discussions on the reformation of these provisions have continued in recent times as well and their objectives have remained much the same, i.e. a reduction in government expenditure. This paper will, now, study in detail the advantages and disadvantages of the current military retirement system. Advantages of the new Military Retirement System: Monetary Benefits: The present system of military retirement is divided into three categories of compensation. They can be described as follows. For the people who have entered the services before 8th September, 1980, the monthly annuity will be calculated over the basic pay. This is referred to as the System 1. For the people who have entered the services during the period of 8th September, 1980 to 31st July, 1986, the monthly income will be the average of the highest income in three years. This system is called System 2 or High 3. Lastly, those who entered the services on or after the date of 1st August, 1986, have the right to choose between the High-3 system and the