Would Reduce 20-Year Pay to Retain Personnel Longer : Panel Backs Military Pension Cuts

House Armed Services Committee Chairman Les Aspin (D-Wis.), citing “generous benefits” provided under the military retirement system, said Friday that his panel has approved legislation to reduce those pensions by an estimated 17%.

The measure--a rare effort to trim the retirement benefits of enlisted personnel and officers--would affect only those who join the services after it becomes law. The bill, approved Thursday by voice vote in a closed session, would have no impact on those now on active duty or retired.

Benefits Called Generous

Aspin said in a statement Friday that “the current system has such generous benefits at the 20-year mark that it simply encourages (military personnel) to get out at 20 years.” By reducing those retirement benefits, Aspin said, the measure would encourage service members to remain on active duty.

Under the current retirement program, those who leave the service after 20 years receive pensions equal to 50% of their average salaries during their three highest-paid years. For those who remain on active duty, retirement pay increases by 2.5% for each additional year in the service, rising to 75% of basic pay after 30 years.

Reduction to 40%

Under the committee’s bill, pensions of those who retire after 20 years would equal 40% of average basic pay for their five highest-paid years. This would increase to the current level of 75% of average basic pay for the highest-paid three years after 30 years on active duty.

At a news conference Friday, Aspin said that, in the past, members of Congress had balked at making changes in the military retirement program because such revisions would cut payments to current retirees or would not result in savings for 15 to 20 years.

However, he said that a new accounting method applied to retirement pay, in which a special fund has been established to meet future pension needs, allowed cuts to be made in current payments without affecting those now receiving the pensions.

“If you change the retirement system now, you get immediate savings in the defense budget,” Aspin said. He estimated that the legislation, if approved by the House and Senate and signed by President Reagan, would amount to a 17% cut in military retirement benefits.

The committee took up the politically sensitive issue after Congress voted last year to reduce retirement benefits by cutting $2.9 billion from the $18.2 billion that the Reagan Administration had sought for military pensions in the current fiscal year.

Troop Cutback Seen

The Pentagon, which has objected to the cuts, said in February that, if no plan was approved by May 1, it would be forced to trim 330,000 troops from the armed services because their pay comes from the same budget account as the pensions. There are 2.1 million troops on active duty and 850,000 in the reserves.

The Pentagon believes that any changes that make retirement pay less attractive make it more difficult to recruit qualified volunteers for the military services.