The Retention Impacts of the Forthcoming USA Military Retirement Reform

Abstract

In 2018, the USA military will introduce a new retirement system that reduces the value of the traditional 20 years-of-service cliff-vesting pension and introduces a defined contribution for all service members. The personnel planning and budgetary consequences of this change depend crucially on how it will impact service member's retention decisions. Survey results from USA military personnel suggest there will be a small increase in retention of enlisted service members in the early-career years, and a considerable decrease in retention of officers at midcareer.