Defense seeks to bolster military retirement benefits

Tom Vanden Brook | USA TODAY

Show Caption Hide Caption 401k's for soldiers? Maybe... Defense Secretary Ash Carter is considering changes to military enlistment standards and might also increase retention benefits. Video provided by Newsy

WASHINGTON — Defense Secretary Ashton Carter plans to push a series of proposals, including a 401(k)-style pension plan and incentives for cyber warriors, aimed at attracting and retaining troops with the skills needed to fight modern wars.

Carter, who took office last month, intends to move quickly to enact changes before the Obama administration leaves the White House in early 2017, according to a senior aide who was not authorized to speak publicly. Carter has identified building a new force capable of dealing with new threats and retaining top performers as a key priority.

Carter is scheduled to address a number of issues regarding military personnel during a two-day trip starting Monday to Pennsylvania and New York. He's scheduled to speak at his old high school in Philadelphia and to address soldiers and students in New York.

An outline of the proposals was provided by a second senior Defense Department official who was not authorized to speak about them because they haven't been announced.

Among the initiatives:

• Modernizing retirement pay. The vast majority of troops, including those called on to do most of the fighting, would get a 401(k)-style retirement account. To qualify for a pension, troops must serve 20 years in uniform. The majority of troops serve fewer years, many of them enlisted soldiers and Marines, and they qualify for no retirement benefits.

"About 83% leave with absolutely nothing," said Todd Harrison, a military budget expert at the Center for Strategic and Budgetary Assessments. "That's especially true when you think about the people who have actually been fighting the wars in Afghanistan and Iraq."

A recent report by a military compensation commission recommended a 401(k)-style plan that would create retirement accounts for all troops. Creating incentives for young people to join the military makes sense as they form the backbone of the fighting force, Harrison said.

"What you need on the battlefield are young, 20-year-olds in peak physical condition," Harrison said. "People who are ready, willing and able to live in hostile environments to serve their country. We don't need large numbers of people staying in the military for 20 years or more."

• Recruiting a new cyberspace force. The Pentagon is building a force of 6,200 personnel, military and civilian, for its cyber mission. It has about half that many people now. It plans to have 133 teams across the services by 2018, according to the senior official. Another 2,000 reservists and National Guardsmen would be on standby for crises and to help defend critical infrastructure.

Finding people with the right high-tech skills requires looking beyond the pool of traditional recruits, the official said. Carter is looking at waiving age limits for cyber recruits and student-loan forgiveness for those with special skills.

• Allowing mid-career breaks. The plans would allow troops to have mid-career breaks for school or family. Carter is considering allowing sabbaticals for troops to return to college, the official said. They could take a break from service to earn degrees or enhance their qualifications and return to the military, picking up where they left. The same break in service could be allowed for troops who want to start raising a family, the official said.