DOD Retirement Benefits

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The Department of Defense (DOD) has two retirement programs. One is for civilian employees, like typists, analysts and administration workers; the other is for military employees, like Army officers, Navy sailors and Marines. These retirement programs have major differences, mostly in the amount of paid pension. Retired military veterans are paid a substantially higher pension than are retired civilian workers.

Standard Employees

Civilian DOD employees are paid retirement benefits under the Federal Employees Retirement System (FERS). This program extends to all federal employees, like postal workers, FBI agents and even retired senators and congressmen. Most FERS retirees are standard employees. If these employees work for 20 years or more and retire after the age of 62, they are entitled to a proportion of the average of their highest three years' salary. This proportion is calculated by multiplying 1.1 by the number of years they worked. For example, if a retiree worked 20 years, his pension will be 22 percent (1.1 x 20) of his "high three" average.

Special Employees

Air traffic controllers, firefighters, FBI officers, Capitol police, Supreme Court police and nuclear materials couriers are paid a higher retirement than standard employees. These employees' retirement is calculated by multiplying their first 20 years by 1.7 percent, then multiplying the subsequent years by 1 percent. For example, if someone worked as an air traffic controller for 30 years, she would receive a pension of 44 percent (20 x 1.7 + 10 x 1) of his "high three."

Pre-1980 Military Retirees

Military retirees who joined the military prior to 1980 calculate their retirement based on their final month's pay. The proportion by which they multiply their final month's pay corresponds to the number of years of military service they served multiplied by 2.5. Someone who joined in 1979 and retired in 1999, for example, would receive a pension of 50 percent of his final month's pay: 2.5 x 20.

1980-1986 Military Retirees

Military retirees who joined between 1980 and 1986 can use the "high 36" program, which is the same system as the F.E.R.S. "high three," except it is expressed in months rather than years. These retirees calculate their pensions by finding the average of their highest 36 months' salary, which in some cases is a higher figure than their last month's salary. The proportion is still figured by multiplying the number of years' service by 2.5.

1986-Present Military Retirees

People who joined the military after 1986 can choose between the "high 36" program mentioned above or retire under the Career Status Bonus program (CSB). Under this program, the high 36 average is multiplied by 2.5 for every year's service up to 20. For every subsequent year, it is multiplied by 3.5 percent. Someone who joined in 1990 and wants to retire in 2020, for example, will be paid a pension of 85 percent of his high 36: (20 x 2.5) + (10 x 3.5).