Panel: Overhaul military benefits

WASHINGTON - A congressionally mandated commission called for an overhaul of the military's benefits system Thursday, recommending changes so that future service members will contribute to their retirements and choose private-sector health plans.

A long-awaited report from the Military Compensation and Retirement Modernization Commission made 15 recommendations that members said would increase the financial options that troops have without reducing their overall compensation. The plan would save the U.S. government billions of dollars but also grandfather in the retirement plans of current active-duty troops and veterans - a sensitive issue for many.

"We are confident that implementing these reforms will move the All-Volunteer Force toward a future that is in the best interest of our Nation's security and that can be fiscally sustained," the commission said in a letter jointly released with the report. "We believe, for those who serve and have served to uphold the military's highest traditions and heritage, and the families that support them, the Federal Government must fulfill its obligation with its enduring commitment in war and in peace."

The commission's plan calls for the adoption of 401(k)-style Thrift Savings Plans for all future service members while keeping in place the basic principles of the existing system that offers retirement benefits to anyone who has served 20 years. The new blended program would provide some retirement benefits to those who serve just a few years but also provide new flexibility to the services as they grapple with maintaining the mix of ranks and experiences they want, the commission said.

The report's release sets the stage for a potentially emotional debate in which proponents of change will highlight the heavy - some would say unmanageable - financial burden on the existing system, while others scrutinize what existing entitlements might be in jeopardy.

Defense Secretary Chuck Hagel said the Defense Department would analyze the proposals in "full detail."