Non-Disability Retired Pay

G-1 Retirement Services Office

Non-Disability Retired Pay

A Historical Synopsis:

1. Military retired pay has a long history that is often misunderstood. It is not a pension. Pensions are primarily the result of financial need. Military retired pay is not based on financial need, but is regarded as delayed compensation for completing 20 or more years of active military service. The authority for nondisability retired pay, commonly known as “length-of-service” retired pay, is contained in title 10, USC.

2. The military retirement system has a four-fold purpose:

1. To provide citizens of this nation a choice of career service in the armed services that is competitive with reasonably available alternatives.
2. To provide promotion opportunities for young and able bodied members.
3. To provide some measure of economic security to retired members.

4. To provide a backup pool of experienced personnel in case of national emergency.

3. Prior to 1861 there was no voluntary military retirement system. In 1861, Congress authorized a voluntary retirement system for officers. In 1885, Congress authorized voluntary retirement for enlisted personnel. In 1948 Congress authorized a voluntary retirement system for career members of the Reserve and National Guard. Since they were established, all systems have undergone changes in years of service required before becoming retirement eligible.

4. In 1916 the formula for computing retired pay was based on final active duty base pay, times 2.5 percent, times years