But fortunately, our statements caught the attention of several informed retirees, one of whom submitted the following clarification about the nature of retired pay. We gratefully print the article with the hope it furthers your understanding of a complex subject. While there may be a superficial resemblance between the military retirement system and systems for federal civilian and private sector employees, there are in fact substantial differences between the military and all other retirement systems. There is no entitlement to military non-disability retirement benefits prior to completion of 20 years of satisfactory service. Restricted in certain post-service activities.
Military personnel make no monetary contribution to their retirement system.
Many large private sector employers have noncontributory retirement plans. Unlike the military system, however, federal law mandates full vesting for most private sector retirement plans by the end of 5-10 years of employment, with partial vesting earlier depending on when full vesting is provided. Conversely, there are entitlements under the military retirement system that are unique. Primary among these is the statutory provisions for upward adjustment of military retired pay, originally to reflect active duty basic pay increases, but since 1963 based on increases in the cost of living as measured by changes in the Consumer Price Index. Permanently disabled military retirees would be exempt from the president's budget CPI cuts.