Reforming the Military Retirement System

by Asch, Beth J.; Johnson, Richard; Warner, John T.

• ISBN13: 9780833024633
• ISBN10: 0833024639
• Format: Paperback
• Copyright: 1998-04-21
• Publisher: RAND Corporation

Summary

The current military retirement system dates back to 1947, when Congress implemented a common system for the military services and for officers and enlisted personnel alike.

Table of Contents

Preface	p. iii
Figures	p. vii
Tables	p. ix
Summary	p. xi
Acknowledgments	p. xix
Introduction	p. 1
Overview of MFERS	p. 7
Basic Benefit Plan	p. 7
Thrift Savings Plan	p. 9
Social Security Benefits	p. 10
Coupling MFERS with a Pay Raise	p. 10
Differences Between MFERS and FERS	p. 10
Transitioning to MFERS	p. 11
Overview of the Theoretical and Empirical Models	p. 13
Theoretical Model	p. 13
Organizational Objectives	p. 13
Individual Productivity	p. 14
Individual Decisionmaking	p. 15
Organizational Policies	p. 20
Empirical Model Overview	p. 25
Retention and Force Structure	p. 26
Computing Ability and Effort Supply	p. 31
Cost Analysis	p. 34
Estimating the MFERS Retirement Annuity	p. 35
Modeling the Transition to MFERS	p. 36
Steady-State Results	p. 39
The Current Military Retirement System: REDUX	p. 39
MFERS without a Pay Raise	p. 41
MFERS with an Across-the-Board Pay Raise	p. 43
MFERS with a Skewed Pay Raise	p. 45
Results for the Transition to the Steady State	p. 51
Theoretical Effects	p. 51
Grandfathering	p. 51
Converting Members	p. 52
Results	p. 54
Other Considerations	p. 61
Force Management Flexibility	p. 61
Involuntary Separation	p. 66
Portability	p. 68
Force Stability	p. 69
Conclusions and Policy Options	p. 71
MFERS with Retention Bonuses	p. 73
Policy Options	p. 74
References	p. 79
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