FRA NewsBytes June 12 2015

Newsbytes 6/12/2015

Newsbytes 6/12/2015

In this issue:
Support Agent Orange Blue Water Navy NDAA Amendment
DoD Supports New Military Retirement System with Changes
SBP/DIC Offset Repeal Introduced in the Senate
Flag Day is Sunday, June 14

Support Agent Orange Blue Water Navy NDAA Amendment
A newly-filed amendment to the Senate version of the National Defense Authorization Act (NDAA-S. 1376), sponsored by Senator Steve Daines (Mont.), expands Agent Orange presumption from only “boots on the ground” and “brown water” to include ships within the territorial waters of the Republic of Vietnam. This amendment would allow most “blue water” veterans who served off the coast of Vietnam to be compensated for service-connected disabilities related to their exposure to Agent Orange herbicide. Studies demonstrate that the desalinization process used on Australian and U.S. Navy ships off the coast of Vietnam magnified the exposure of the Agent Orange in the water. Past VA policy (1991–2001) allowed service members to file claims if they received the Vietnam Service Medal or Campaign Medal. Members are strongly urged to use the FRA Action Center (action.fra.org/action-center) to ask their senators to support this amendment.

Other amendments to the Senate NDAA listed on the Action Center include stopping pharmacy co-pay increases for retirees under age 65, concurrent receipt reform, increasing active duty/ reserve pay and BAH, and providing veterans status for 20-year reservists who were not mobilized. Members are encouraged to use the Action Center to weigh in on these important issues.
DoD Supports New Military Retirement System with Changes
After a long delay, the Department of Defense (DoD) has announced its support for a blended military retirement system—with some notable changes. Firstly, DoD recommends that the COLA minus one percent provision for military retirees who begin military service after January 1, 2016 be repealed. Both the House and Senate proposals allow for a lump sum payment to a service member at 12 years if he or she signs up for four more years. The DoD wants greater flexibility to offer lump sum payments anytime between eight and 16 years of service, and wants more flexibility in determining the size of the payment and the length of the service obligation. The DoD also wants a mandate for new service members to contribute three percent of their pay to Thrift Savings Plan (TSP) accounts, the federal employee equivalent to a 401(k) account, which will be matched by an employer contribution and may not be opted out of until the service member completes financial literacy training. For more details on the Pentagon’s changes to the military retirement system, see Tom Philpott’s June 11 2015 Military Update column on the FRA website.

Since February 2015, Congress has been debating the advantages and disadvantages of the 15 recommendations of the Military Compensation and Retirement Modernization Commission (MCRMC). The first recommendation slashes future military retainer pay by 20 percent and moves future retirees into a blended retirement system. Troops would receive government contributions to Thrift Savings Plan (TSP) accounts, the federal employee equivalent of a 401(k) account. Both the House and Senate Defense Authorization bills include these provisions. The House version allows a government match of up to 5 percent and continues the match throughout the entire career. The Senate proposal provides only a 4 percent match (after two years of service) and stops government contributions at 20 years of service. This will be one of many differences between the two bills that will have to be resolved in conference committee. A conference committee will be appointed after both bills pass their respective chambers. The conference committee (made up of an equal number of senators and representatives) will draft the final version of the bill, which then will return to the House and Senate for a vote. If both chambers approve the bill it will be sent to the President, who will sign it into law or veto it.

Members are urged to use the FRA Action Center (action.fra.org/action-center) to weigh in on the proposed new retirement system.
SBP/DIC Offset Repeal Introduced in the Senate
Sen. Bill Nelson (Fla.) has introduced FRA-supported legislation (S. 979) that repeals the requirement for reduction of survivor annuities under the Survivor Benefit Plan (SBP) for surviving spouses to offset dependency and indemnity compensation (DIC). This is the Senate companion bill to legislation introduced in the House (HR 1594) sponsored by Rep. Joe Wilson.

SBP and DIC payments are paid for different reasons. SBP is purchased by the retiree and is intended to provide a portion of retired pay to the survivor. DIC is a special indemnity compensation paid to the survivor when a member’s service causes his or her premature death. In such cases, the VA indemnity compensation should be added to the SBP the retiree paid for, not substituted for it. It should be noted as a matter of equity that surviving spouses of federal civilian retirees who are disabled veterans and die of military-service-connected causes can receive DIC without losing any of their federal civilian SBP benefits.

Members are strongly urged to use the FRA Action Center (action.fra.org/action-center) to ask their U.S. representative and senators to support these proposals.
Flag Day is Sunday, June 14
Flag Day is celebrated on June 14; it commemorates the adoption of the flag of the United States, which occurred on that day in 1777 by resolution of the Second Continental Congress. In 1916, President Woodrow Wilson issued a proclamation that officially established June 14 as Flag Day and in August 1949, National Flag Day was established by an Act of Congress. Flag Day is not an official federal holiday.