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Uniting all Tri-State Veterans

Support for Guard/Reserve 
Retirement Pay at age 55

  
Legislation has been introduced to provide a more equitable retirement for the men and women serving in the Guard and Reserves. This bill would reduce the age for receipt of retirement pay for Guard and Reserve retirees from 60 to 55. This proposed legislation is contained in Senate Bill S. 1035 and House Bill H.R. 742. Active duty members draw retirement pay the day after they retire. Guard and Reserve retirees currently have to wait until they reach age 60 before they can draw retirement pay, regardless what age they retire. The following is an example of a typical Active Duty and Guard/Reserve retirement.
Scenario A - Joe Active

Joe Active joins the Army at age 18 and serves on active duty for 20 years.  He retires as an E-7.

 Scenario B - Joe Guard

Joe Guard joins the Army at age 18 and serves on active duty for 3 years. Joe completes his enlistment and is discharged from active duty and joins the guard. Joe gets recalled (mobilized) to active duty after a few years and is sent to Iraq for a year. He then finishes his guard duty with a total of 4 years active duty and 16 years in the guard for a total of 20 years. He retires as an E-7.
Joe Active serves a total of 7,300 days in uniform. Joe Active will draw retirement pay from age 38 until the current life expectancy of age 77 - or for 38 years. Joe Active will receive a total of $761,907 in retirement pay during this 38 year period or $104.37 for every day he served on active duty. Joe Guard serves a total of 2,068 days in uniform. Joe Guard will draw retirement pay from age 60 until the current life expectancy of age 77 - or for 17 years. Joe Guard will receive a total of $123,454 in retirement pay during this 17 year period or $59.70 for every day he served on active duty.
$59.70 is 57% of $104.37 * This would imply that the Guard/Reserve men and women fighting in Iraq, along side their active duty counterparts, are only worth half as much when it comes to retirement.
In this example:
Guard/Reserve serve 28% as much time as an Active Duty member. (2,068 versus 7,300 days)
Guard/Reserve receive 16% as much in retirement. ($123,454 versus $761,907 )
If Guard/Reserve would receive equal pay (28%) they would receive $215,837 in retirement.
Lowering the Guard/Reserve retirement pay age to 55 would not bring them to the same level, or equal pay, but it would provide a slightly more equitable treatment than the current age 60 rule. By drawing retirement pay at age 55 they would receive $77.26 per day served compared to active duty receiving $104.37 per day served. $77.26 is 74% of $104.37 * Still not equal, but more equitable.

Many Guard/Reserve retirees have spent more time in a combat zone than their active duty counterparts. These rules apply equally to all service members, regardless if they are on the front line or behind a desk. Thus, the type of duty does not have any bearing on this legislation. The Department of Defense (DoD) has not supported legislation to provide guard/reserve men and women more equitable retirement pay in the past. See Army Times, 5APR04, page 10 "Pentagon Doesn't Back Push To Improve Reserve Benefits."  The DoD obviously feels it should use their funds for current operational needs. Additional requirements and reliance has been placed on the Guard/Reserve in recent years. It is time to recognize our men and women in uniform serving in the Guard and Reserve and provide them a more equitable retirement system. 

Please contact your elected officials in Washington DC and let them know you support this legislation and want to see members of the Guard and Reserve receive a more equitable retirement program.
Contact your Senator (Senate) 
Contact your Representative (House)
Assumptions used in this example - Both service members are:  the same age and sex; enter active duty on the same day; achieve the same rank and; retire the same day.  Results will vary depending on rank, years of service, retirement plan (depending on when they entered the military), etc. - keep everything equal.  A monthly base pay of $3,341.70 (2004 pay scale for an E-7 over 20) was used to calculate retirement pay with no cost of living, inflation, etc. included.  See "Military Retirement Pay Computations" for more details on how this comparison was calculated..

Also see Pending Legislation on TriStateVeterans for more military and veterans legislation and contact information on how to reach your Senators and Representatives.
Another Excellent Site on this topic is "Uniting the Military Community" at: http://m.1asphost.com/military/unite/page11.html
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