The retention effects of high years of service cliff-vesting pension plans

The Retention Impacts of the Forthcoming USA Military Retirement Reform

“…Responses suggest that there will be a small increase in retention rates of enlisted personnel in the early-career years; for officers, retention will be similar up to 12 YOS, at which point there will be a considerable decrease in retention rates under the MRS. These findings are in contrast to the simulations [1], who conclude that retention rates would not appreciably change under the MRS; furthermore, despite the fact that our data reflect stated preferences and not actual choices, these findings echo the actual retention behavior of Australian military members who made a similar choice between a defined benefit and defined contribution retirement scheme in the 1990s [2]. This paper also contributes to the broader empirical literature on choices in military retirement systems [2][3][4].…”