The uniformed personnel leaders of the Army, Navy, Marine Corps and Air Force told Congress Tuesday that they have concerns with the new retirement system lawmakers enacted just a few months ago, worrying that the “blended retirement” system would adversely impact enlisted personnel.

The Defense Department generally supports the reforms, set to take effect in 2018, because they would begin delivering at least some retirement benefits to members who serve fewer than 20 years.

But the mechanism for doing so — government contributions and matches to service members’ Thrift Savings Plan (TSP) accounts — might not deliver the long-term retirement benefits Congress envisioned, military personnel chiefs told the Senate Armed Services Committee Tuesday, particularly for enlisted personnel whose modest pay during the first few years of their careers leaves little left over for conscious investment decisions.

“For most folks, if you max out your contribution to the TSP, you’re probably going to be ahead [of the previous system] by the time you retire,” said Lt. Gen. James McConville, the Army’s deputy chief of staff for personnel. “But a lot of our young soldiers are living paycheck-to-paycheck. If they don’t start saving early, they’re going to have a tough time staying with the force by the time they get to the 25-year point. We have some great noncommissioned officers who serve 30 years, and we want to make sure they have a good retirement when they get to that level.”

Under the retirement system that’s been in effect since the late 1940s, troops earn guaranteed pensions based on a mathematical multiplier that delivers 50 percent of their basic pay for the rest of their lives, assuming they retired at 20 years of service. (Service members who served fewer than 20 years received nothing).

The reforms Congress passed in December, following recommendations from the Military Compensation and Retirement Modernization Commission, reduced that 20-year retiree’s pension to 40 percent of their basic pay. To make up the difference, the government will make automatic 1 percent contributions to all members’ TSP accounts once they’ve served at least 3 years and match up to 4 percent of service members’ voluntary investments.

Current projections suggesting that the pension reductions would be offset by returns from the TSP presuppose that service members would invest enough of their own pay to maximize the government’s matching contributions.

Lt. Gen. Mark Brilakis, the Marine Corps deputy commandant for manpower and reserve affairs, said there’s reason to question whether that will play out in practice.

“We’ve not started the new retirement program yet so we’re not sure what the take rate will be, but if you’re going to come close to what the current retirement system provides you’ve got to start saving right away,” he said.

In its 2017 budget proposal, DoD proposed several adjustments to the new retirement program, including delaying the government’s TSP match until a military member’s fifth year of service — around the time most enlisted troops begin their second enlistment. In exchange, DoD’s proposal would increase the government’s matching contribution to 5 percent rather than 4 percent.

The new retirement system, as enacted, would also end the government’s matching contributions to the TSP once a member has served for 26 years.

Lt. Gen. Gina Grosso, the Air Force’s deputy chief of staff for manpower, personnel and services, said cutting the contributions at that point would reduce the incentive for senior enlisted personnel to stay in the military.

“We would like to see matching contributions continue until at least 30 years of service, because we have a significant number of senior noncommissioned officers who we need to stay longer than 26 years,” she said.

The Pentagon also wants to adjust the continuation bonuses Congress passed as part of the retirement reform package.

The newly enacted system gives lump-sum incentive payments to members who have served 12 years as long as they agree to stay in the military for another four. At a minimum, those bonuses amount to 2.5 times the military member’s monthly pay, but the military services have the option of sweetening them with an additional 13 months’ worth of basic pay during times of low retention.

Vice Adm. Bill Moran, the deputy chief of naval operations for manpower, personnel training and education said the payments are a valuable tool to make sure the military holds onto its best people, but pegging the payments precisely at 12 years is far too rigid.

“We need more flexibility to be able to shape the force, particularly where people are at their mid-career points,” he said. “It’s locked at 12 years right now, but with our high-tech skill requirements, we need discretion to issue those payments within a range — somewhere between the eight and 14 year point.”

Sen. Lindsey Graham (R-S.C.), the chairman of the Senate Armed Services Committee’s personnel subcommittee, said Tuesday that at least one of DoD’s proposals, delaying matching contributions until a military members fifth year of service, was a nonstarter.

“This was an intentional decision by this committee,” he said. “The department asked us last year to push the eligibility date further into a service member’s career, and we unanimously rejected that. We will continue to reject DoD requests that would delay government contributions. Let me be clear: it is our commitment to our many service members who go out on deployment before their fifth year of service that they, too, have earned some retirement.”

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