{ "id": "R43393", "type": "CRS Report", "typeId": "REPORTS", "number": "R43393", "active": false, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 428300, "date": "2014-02-19", "retrieved": "2016-04-06T23:06:30.790720", "title": "Reducing Cost-of-Living Adjustments for Military Retirees and the Bipartisan Budget Act: In Brief", "summary": "In addition to raising budget caps in FY2014 and FY2015, the Bipartisan Budget Act (BBA) reduced the cost of living adjustments (COLAs) provided to working-age military retirees under the age of 62 from the full Consumer Price Index (CPI) to the CPI less 1%. Military retirees would then receive a \u201cbump-up\u201d at age 62 that would raise their benefit level to an amount that included full rather than partial CPI adjustments for each year below the age of 62. This new benefit level would then be increased for full CPI adjustments in later years. According to CBO, this change would have saved the Department of Defense $6.235 billion over the decade. \nBased on data published by the Department of Defense (DOD) Actuary about the characteristics of FY2012 military retirees and CBO projections of the CPI, CRS estimates that for the average nondisabled future retiree, lifetime retirement income under the BBA\u2019s lower COLA would be about:\n$1.67 million rather than $1.73 million in lifetime retired pay, a $69,000 or 4.0% reduction for enlisted personnel; and\n$3.74 million rather than $3.83 million in lifetime retired pay, an $87,000 or 2.3% reduction for officers.\nThe impact of the BBA\u2019s reduced COLAs on disabled retirees would have been larger because they tend to retire younger and thus would have faced COLA reductions for more years. CRS estimates that the lifetime retirement income for disability retirees under the BBA formula would have been reduced by $123,000 or 9.6% for enlisted personnel and $144,000 or 5.3% for officers.\nIn response to concerns about potential effects, Congress restored full CPI COLA adjustments for disabled military retirees and survivors in the FY2014 Omnibus (H.R. 3547/P.L. 113-76) signed by the President on January 17, 2014. Several bills were also introduced that would reverse the COLA decrease for non-disabled military retirees as well. Although the reduced COLAs would not have gone into effect for non-disability retirees until December 1, 2015, some Members called for action sooner.\nOn February 11, 2014, the House passed an amended version of S. 25, to modify the impact of the reduced COLA provision of the BBA so it only applied to individuals who become members of the uniformed services on January 1, 2014, or later. The Senate passed this amended version on February 12, and the President signed it into law (P.L. 113-82) on February 15. Hence, all currently serving military personnel who joined before January 1, 2014, and all current retirees are effectively excluded (\u201cgrandfathered\u201d) from the COLA reduction provision of the BBA. Only those individuals who join in 2014 or later and subsequently qualify for non-disability retirement will ultimately be subject to the COLA provision (along with REDUX retirees, who opt into a reduced COLA retirement in exchange for a cash bonus). Since non-disability retirees typically must serve 20 years before qualifying for retirement, the first major cohort of non-disability retirees to be impacted by this provision will be those who retire in 2034.", "type": "CRS Report", "typeId": "REPORTS", "active": false, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43393", "sha1": "f5ebffff9620b52727fa6d6731144d253d93a640", "filename": "files/20140219_R43393_f5ebffff9620b52727fa6d6731144d253d93a640.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43393", "sha1": "2b261cf4fe7e0132993e136bf348daa16567c9bd", "filename": "files/20140219_R43393_2b261cf4fe7e0132993e136bf348daa16567c9bd.pdf", "images": null } ], "topics": [] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc282295/", "id": "R43393_2014Feb11", "date": "2014-02-11", "retrieved": "2014-04-02T19:38:14", "title": "Reducing Cost-of-Living Adjustments for Military Retirees and the Bipartisan Budget Act: In Brief", "summary": "This report discusses the reduction of cost-of-living adjustments (COLAs) for military retirees through the Bipartisan Budget Act (BBA). It includes an overview of the changes, demographics of military retirees, and potential effects of the changes.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20140211_R43393_5d9d18b3da04abe5978a08fc7c50b4240ddde030.pdf" }, { "format": "HTML", "filename": "files/20140211_R43393_5d9d18b3da04abe5978a08fc7c50b4240ddde030.html" } ], "topics": [ { "source": "LIV", "id": "Military personnel", "name": "Military personnel" }, { "source": "LIV", "id": "Retired military personnel", "name": "Retired military personnel" }, { "source": "LIV", "id": "Congress and military policy", "name": "Congress and military policy" } ] } ], "topics": [ "National Defense" ] }