WASHINGTON (Sputnik) — For the first time, members of the US armed services will automatically, upon entry, contribute to their retirement plan from their current compensation, according to the white paper.
“Future Service members will receive 80% of the current defined benefit (pension) if they serve for 20 years,” the six-page white paper sent to legislators on Wednesday said.
The change will ensure that more service members leave it with retirement savings, the white paper claimed.
Changes to the US armed forces’ pension system have been infrequent and incremental, the document acknowledged.
“Our proposal is, and will be perceived as, a momentous change to a tried and true system,” it said.
The proposed system would provide for the first time a modest retirement benefit for the vast majority of service members who leave the military before reaching 20 years of service to qualify for the full traditional pension, it said.
On Thursday, senior Pentagon officials will begin meeting with members of Congress to discuss the white paper plan.
