Navy and Air Force leaders bump heads often over traditional issues like aircraft carriers versus long-range bombers. Here's a new one: tax-deferred savings plans.
In recent months, defense officials have asked the services to weigh in on a legislative proposal to allow service members to shelter up to 5% of their monthly basic pay in a Thrift Savings Plan (TSP), the one offered to federal employees under the Civil Service Retirement System.
The Navy, Marine Corps, and Coast Guard like the idea. The Air Force and Army, after much hand-wringing, say they do not. That could be enough to kill the plan, although the sea services hope not.
Millions of U.S. workers participate in 401(k) or other pretax savings programs. Many have seen the value of their accounts rise sharply along with the stock market.
Service members are beginning to feel left out. That feeling is reinforced by a retirement system that offers no vesting rights before completing 20 years of service. More than 200,000 service members leave military service each year with no pension benefits.