Championing Responsible National Security Policy

Senator Questions Retirement Perks for Generals and Admirals

Is it fair that the military’s top brass gets paid more in retirement than they did while on active service at the same time that lower ranking service members see cuts to their future retirement benefits? Sen. Kelly Ayotte (R-N.H.) thinks not.

During a hearing on military compensation last week, Sen. Ayotte raised an important issue of equity and fairness: whether a special pension enhancement for top generals and admirals should be revoked following Congress’s decision to cut cost-of-living adjustments (COLA) for military retirees.

Over the winter holidays, Congress enacted the Ryan-Murray budget deal, which reduced the COLA for military retirees by 1 percent for estimated savings of $6 billion. However, the budget deal did not touch a special pension enhancement provided to retired three- and four-star generals and admirals.

In 2007, Congress enacted a provision, which the Pentagon had earlier requested, that boosted pensions for three- and four-star generals and admirals who serve more than 40 years. This provision was intended to help retain senior officers during the height of the wars in Iraq and Afghanistan.

As a result of the 2007 enhancement, three- and four-star generals and admirals with more than 40 years of service receive pensions greater than their basic pay at the time of retirement—2.5 percent greater per year they serve beyond forty. This means that a four-star general or admiral with 40 years of service will receive about $237,144 a year during retirement. That’s $50,000 more than he or she would have received while on active duty. (Previously, generals and admirals’ pensions were capped at 75 percent of their pay).

While this 2007 enhancement was left intact, the Ryan-Murray budget deal reduced the annual COLA for military retirees who have not yet reached the age of 62. It is simply unfair to ask men and women who served in combat in Iraq and Afghanistan to shoulder the burden of deficit reduction while top Pentagon brass get to keep their special perks and benefits.

Last week, the Senate Armed Services Committee held a hearing to examine the recent changes to the military retirement system. During the hearing, Sen. Ayotte raised the pension enhancement issue with Vice Chairman of the Joint Chiefs of Staff Admiral James Winnefeld, Jr.:

Now we’re in a situation where the Congress has made cuts to—and I want to say these cuts, by the way, are a penalty. It’s a one percent decrease in your cost of living increase. It’s a penalty.

And we haven’t even looked at issues like do we need to continue the increases to the generals and admirals that they’ve received now that we are winding down in Iraq and Afghanistan.

Admiral Winnefeld pointed to the Military Compensation and Retirement Modernization Commission, created by Congress last year to analyze the Pentagon’s compensation system. He said that he believes the Commission should examine the pay and benefits of all members of the armed forces as part of its comprehensive review. The Project On Government Oversight agrees, though it’s going to take a while. Congress recently extended the Commission’s deadline by nine months to February 2015.

Rep. Jackie Speier (D-Calif.), a member of the House Armed Services Committee, noted in an interview with USA Today that reforming pensions for three- and four-star generals and admirals is a ripe place for Congress to find savings. “These golden parachutes need to be turned back to sterling silver ones.” We couldn’t agree more.

The Ryan-Murray budget deal has been amended to restore the full COLA for service members with military-related disabilities as well as those receiving annuity payments under the Survivor Benefit Plan. Several senators, including Senator Ayotte, have released proposals that would revoke the recent COLA cut in its entirety. And press reports indicate that Senate Majority Leader Harry Reid (D-Nev.) may soon call for a vote on such legislation. In any case, POGO strongly urges Congress to find deficit savings by ending the pension plus-up for senior generals and admirals.