Proposed changes to the Navy’s retirement package offer flexibility that will be enticing to young sailors and an opportunity for change for longtime service men and women.

The changes, included in the National Defense Authorization Act, are a “combination of retirement programs that we see across America,” Chief of Naval Personnel Vice Adm. Bill Moran said this week during an appearance on the Navy’s All Hands Radio podcast, alongside Manpower, Personnel, Training, and Education Fleet Master Chief April Beldo.

“It’s a 401(k) type of vehicle that you would see anywhere on the outside in most of corporate America,” Moran said. “It will also continue to provide some of the same functions we have today in terms of a defined benefit after 20 years.”

Beginning in 2018, new service members of the Navy as well as the other uniformed services, would fall under a hybrid retirement system. Their pensions would be less generous than the current formula. Instead, they would have greater incentives to enroll in the Thrift Savings Plan. The government would match their TSP contributions up to 5 percent of their basic pay. The changes would not impact current military, but those with fewer than a dozen years of service by 2018 could opt into the new system. The employer match would end after 26 years of service.

“Anybody on active duty prior to that point keeps the retirement program we currently have,” Moran said. “We are all grandfathered in under the current retirement program. Any new sailors who join after that implementation date in 2018 will be subject to the retirement program.”

While the NDAA’s future still is in flux — President Barack Obama has said he will veto the bill — Moran said he believed there will be an option for current active duty members to shift to the new program.

The new program, he added “will provide all of us a greater degree of flexibility in the future that I think will be attractive to a lot of young sailors.”

That attractiveness is part of what Moran said will help make uniformed service more appealing to younger generations.

Millennials want a greater degree of flexibility, opportunity and choice, Moran said.

“That was the [Military Compensation and Retirement Modernization] commission’s intent as well: try to … modernize our retirement program that more closely matches the competition we see on the outside,” he said, adding that roughly 15 percent of people who join the Navy actually reach the 20-year mark for retirement.

“Retirement isn’t really on the minds of recruits,” Moran said.

Once someone decides they want to make a career of the Navy, they’ve got a family or become concerned about having a future affordable lifestyle, “that becomes more of a planning factor,” Moran said.

Unlike the current plan where a service member must hit 20 years, Moran said, the new retirement plan will have earlier opportunities and make it “portable across the Navy to other corporate and other industries out there.”

Compensation, career intermission, communication

Money issues were a popular topic during the podcast. Other questions asked by listeners and via social media included whether there would be more opportunities in 2016 for reserve forces and whether the Navy would be bringing back hazardous duty pay.

Moran said because of the continuing resolution it was hard to predict the fiscal outlook.

“We are in a pretty tight fiscal environment and we try to balance the needs of the fleet through ADT and ADSW [Active Duty for Training and Active Duty for Special Work] to meet certain needs and capabilities at the staff level in the fleet, in other places,” Moran said. “We know and appreciate the value very much of what the reserves bring in support of the active force, and we’ll continue to fight for that money every opportunity that we get.”

Moran also said hazardous duty pay would not be coming back without input from Secretary of Defense Ash Carter.

“It’s not a Navy policy,” Moran said, adding that the service does what it can to compensate through things such as sea duty pay.

Moran also shared that in the NDAA, there was language for an expansion of the Career Intermission pilot program. He also said that dual Basic Allowance for Housing would remain as it is today, based on the pending legislation.

Other questions during the podcast ranged from tobacco use in the military — not going away any time soon — to keeping family members in the loop on their loved one’s whereabouts.

Beldo fielded a question from a serviceman wondering what could be done when a service member is not chosen by a selection board for a leadership position.

Beldo assured listeners that “there’s absolutely nothing wrong with you. But as you know we are limited to the number of selections we can make in each rate. Sometimes that’s just the only problem, it’s not you at all, it’s the process that we have where we select vacancies and we just didn’t have any more vacancies. So don’t ever think that there’s something wrong with you if you didn’t make it. Continue to do what you’re doing and you will get in there.”

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