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Recommendation: Earlier Pension Payouts for Career Reservists and Guard Members


The new Quadrennial Defense Review is out, and it’s a doozy. One of the bigger issues affecting reader pocketbooks is proposed reforms in reservist and Guard pay. The bottom line: The reviewers think they’re paying you too much to drill, but not enough to compensate career reservists and Guardsmen.

The authors recommend cutting the number of days of drill pay for most drilling members. The sweetener: They propose bringing reserve component retirement benefits more into line with active duty members.

Currently, if you retire after 20 years’ qualified reserve component service, you don’t get a pension until you turn 60. Some special rules allow you some credit for deployment, allowing you to start pension payments a year or two early if you’ve had a couple of deployments. But if you enlisted at age 20 and serve til age 40, and retire, you still have to wait 18 or 20 years before you can begin collecting a pension for your reserve component service.

This is a severe disadvantage compared to active duty servicemembers, who begin collecting retirement pay as soon as they retire (where many of them go on to “double dip” in government jobs that will allow them to collect two pensions by the time they’re 60 or 65!).

Under the proposed rules, though, the studies’ authors recommend starting reserve component pensions as of the 30th anniversary of entry into service, provided the service member has completed 20 years of qualified service.

For someone who enlisted at age 20, then, the new system would allow for pension payments to begin at age 50. For an officer who entered service at age 23, out of ROTC, pension payments would begin as early as age 53.

The result, if Congress adopts the recommendations, would be a skewing of the pay system from the pockets of junior enlisted who may not elect to pursue careers to senior officers and NCOs, who would overwhelmingly reap the benefits of earlier pension payouts.

The findings are detailed in Chapter 6 of this publication, along with more background.

In addition to the pension reforms, the report also noted the inane complexity of the fiscal accounting system feeding into the pay and orders processes affecting Guardsmen and reservists, and called for changes to simplify the system, encourage volunteerism and reduce confusion. For example, they recognized the ‘two-tier’ system that results in AGR personnel being eligible for much more in allowances and benefits than troops working beside them on state or Active Duty Special Work orders (ADSW), even for extended periods doing the same jobs.

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