Monday, September 19, 2011

Retired Military Facing Budget Cuts

Retiree Benefits for the Military Could Face Cuts, is an article posted by the New York Times about possible benefit cuts for retired military in response to the debt ceiling agreement approved this summer. This debt ceiling agreement will force the Pentagon to make a budget cut of $400 billion over the next 12 years and it is quite possible that the benefits of the retired military could be reduced.
Currently, “military pensions and health care for active and retired troops now cost the government about $100 billion a year.” “Each year the Defense and Treasury Departments set aside more than $75 billion to pay not only current and future benefits but also pensions for service many years in the past. But the retirement fund has not accumulated nearly enough money to cover its total costs, with assets of $278 billion at the end of 2009 and obligations of about $1.4 trillion.”
A proposal from the Defense Business Board of the Pentagon has been made that would give military members a benefit plan in which contributions would be made to individual accounts and after serving the minimum requirements soldiers could leave with a small “nest egg,” however, retirees wouldn’t receive benefits until the age of 60.
As with any possible budget cut and plan proposals there are people for and against them. It seems however, most people are against cutting retired military benefits.

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