FRA NewsBytes October 2 2015

FRA Newsbytes 10/02/2015

FRA Newsbytes 10/02/2015

In this issue:
NDAA Includes Drastic Retirement Changes, Co-pay Increases, and More
CR Passes to Keeps Government Open
Gold Star Hiring Preference Made Gender-Neutral
SVAC Reviews Veteran Toxic Exposure

NDAA Includes Drastic Retirement Changes, Co-pay Increases, and More
The House and Senate have reached agreement on the final version of the National Defense Authorization Act (NDAA-H.R. 1735). As NewsBytes goes to press, the House has passed the bill, which includes:

  • The creation of a new “blended” military retirement system for those who join the military after January 1, 2018;
  • Increased pharmacy co-pays for family members and retirees for prescriptions filled off base or by mail, the size of which will range from $2 to $4 depending on whether drugs are brand-name or filled at retail outlets;
  • An active duty pay increase of 1.3 percent, which is lower than the civilian wage increase of 2.3 percent;
  • Continued dual Basic Allowance for Housing (BAH) payments to service members married to other service members;
  • Reducing BAH rates by one percent a year until 2019; and
  • Rejecting the Administration’s request to reduce stateside commissary funding.

The new “blended” retirement system, which is based primarily of the recommendations of the Military Compensation and Retirement Modernization Commission (MCRMC) final report for those who join the military after January 1, 2018, will do the following:

  • Reduce the current 20-year retirement benefit (defined benefit) program to 40 percent;
  • Provides a “continuation pay” bonus at the completion of 12 years of service if the service member agrees to remain in the military for four more years;
  • Provides an optional lump-sum payment at retirement with reduced monthly retirement benefits;
  • Creates a minimum continuation pay equal to 2.5 times monthly basic pay for active duty members; and
  • Authorizes a mandatory Thrift Savings Program (TSP) with a one-percent employer contribution and additional employer matches up to four percent of employee salary contribution.

The new system will also provide an automatic contribution to a service member’s Thrift Savings Program (TSP) account totaling 1 percent of his or her base pay, and will provide matching federal contributions of up to 4 percent of troops’ contributions. The plan will also include new financial literacy training to help troops make responsible investment decisions over the course of their careers. There is a 26-year sunset for employer TSP matching contributions. The Senate version of the NDAA stopped the TSP employer matching at 20 years of service. FRA pushed for a match beyond 20 years, to give service members an incentive to stay in the military after qualifying for retirement.

The President’s press spokesman has announced that the President will veto the legislation. The President’s motive for the veto is the use of the Overseas Contingency Operations (OCO) account to bypass sequestration spending caps for Defense. The President does not oppose spending more on Defense, provided that Congress also increases funding for non-defense programs subject to sequestration caps.

CR Passes to Keeps Government Open
The House and Senate passed a Continuing Resolution (CR) to keep the government open until December 11, 2015. The new fiscal year started on October 1, 2015 and without the CR there would have been a (partial) government shutdown. A short-term CR, however, is one of several fiscal and budget problems that need to be addressed. Other issues include:

  • Eliminating automatic sequestration cuts that, if left unchanged, continue until FY 2021;
  • Extending several important tax break programs; and
  • Raising the federal debt ceiling so the federal government will avoid financial default.

There is a real possibility, however, that there will be no budget agreement, resulting in a year-long CR that would keep Pentagon spending at FY 2015 levels. Defense budget experts indicate that a long-term CR would exacerbate an already poor budget situation for the Pentagon. FRA believes that FY 2016 sequestration (automatic, across the board budget cuts) for Defense would be disastrous for national security and would adversely impact pay and benefits. Members are urged to use the FRA Action Center ( to ask their legislators to exclude Defense from sequestration.
Gold Star Hiring Preference Made Gender-Neutral
Legislation that would extend the same federal hiring preference to fathers that is available to mothers of service members killed or permanently and totally disabled in action has passed the House and was sent onto the President to be signed into law. The FRA-supported “Gold Star Fathers Act” (S. 136), which passed the Senate in May, takes its name from the symbol of parents whose children are killed in action. Such parents are referred to as “Gold Star parents” because they traditionally display a Gold Star flag as a symbol of their loss and sacrifice.

The federal government has long recognized the sacrifice of Gold Star families by granting unmarried and separated Gold Star mothers—and unmarried and separated mothers of totally and permanently disabled veterans—a 10-point hiring preference when they apply for federal jobs.

This legislation will make this hiring preference gender-neutral, extending it to unmarried or separated fathers of service members killed or totally and permanently disabled in action.
SVAC Reviews Veteran Toxic Exposure
FRA National Executive Director (NED) Thomas Snee attended a recent Senate Veterans Affairs Committee (SVAC) hearing on concerns about toxic exposure impact on veterans and their children. The hearing focused primarily on the Department of Veterans Affairs (VA) response to toxic exposure issues—the “Toxic Exposure Research Act” (S. 901), the “Blue Water Navy Vietnam Veterans Act” and toxic exposure at Marine Corps Base Camp LeJeune, N.C.

After the hearing, SVAC Chairman Johnny Isakson (Ga.) spoke with NED Snee and requested input from FRA on the overarching issue of toxic exposure. Snee dispatched a follow-up letter to Chairman and Ranking Member Richard Blumenthal (Conn.) expressing the views of the Association. A copy of the letter is available on the FRA website: