Budget Deal Hits Military Retirees with Pension Cuts, Federal Retirees Untouched -- Cost of living adjustments will decrease for retired military personnel, not for civilian retirees -- By Elizabeth Harrington, The Washington Free Beacon

Military retirees will see a decrease in their pension plans if the bipartisan budget agreement is adopted, while civilian federal employees will be exempt.

Under the budget agreement crafted by House Budget Committee Chairman Paul Ryan (R., Wisc.) and Senate Budget Committee Chairman Patty Murray (D., Wash.), military retirees younger than 62 will receive 1 percentage point less in their annual cost-of-living adjustment.

New federal employees who are hired after Jan. 1, 2014 will also be required to pay 1.3 percent of their pay more into their pension plans. However, federal retirees will continue to receive their generous pension benefits and current employees will not be required to pay more.

Civilian government workers will be grandfathered in at their current contribution rate of 0.8 percent.
Ryan contends lowering the cost-of-living adjustment (COLA) for military retirees under 62 will decrease the deficit by $7 billion over 10 years.

Military personnel that enlisted after 1980 currently have the choice between two retirement plans. The majority of the military prefers the “High Three” plan, which offers a full COLA equal to inflation as measured by the Consumer Price Index (CPI).

An alternative plan, the “Redux,” provides a lump sum of $30,000 upon retirement, but the cost-of-living adjustment is equal to inflation minus 1 percent.

According to the Congressional Research Service (CRS) as of 2009, 244,476 military service men and women chose the High Three plan, while only 14,605 opted for the Redux.

If the budget agreement is adopted, all military retirees will be forced into a plan similar to the Redux plan, but they will not receive a lump sum upon retirement.

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