14 Annual retirement disbursements starting in fiscal year 1973 for the present system with various recomp. proposals-Continued [In billions] Cumulative to fiscal year 2000 $4.339 $5.328 $0.989 $4.614 $0.275 $4.516 $0.177 $4.508 $0.169 4.758 5.739 .981 5.086 .328 4.969 .211 4.955 . 197 5.210 6: 190 : 980 5.609 . 399 5. 465 .255 5.437 227 5.732 6. 708 .976 6. 221 .489 6. 023 .291 5.991 259 6. 274 7.247 .973 6. 871 .597 6. 600 .326 6.568 294 7.975 8.929 .954 9.272 1.297 8. 557 .582 8.389 414 13.916 14.712 : 796 18.430 4.514 17.212 3. 296 14. 867 .951 21.662 22.160 .498 31.535 9.873 29.308 7.646 23. 255 1.593 339.310 362. 282 22.972 446. 038 106.728 417.275 77.965 361. 543 22.233 11-time recomp. for all on retired rolls when legislation enacted; thereafter CPI adjustments only; future retirees CPI adjustments only. Recomp. restored for all at age 60; CPI adjustments until that age. Recomp. restored for all at age 65; CPI adjustments until that age. Recomp. restored for disability retirees only. 15 RETIRED PAY ADJUSTMENTS UNDER THE CPI FORMULA Adjustments of Retired/Retainer Pay for Uniformed Services-10 U.S.C. 1401a Background.-Prior to 1 June 1958 retired pay of military personnel was computed on the basic pay of a member on active duty of equal grade and service. When basic pay was increased retired pay was correspondingly increased. P.L. 85-422 departed from this practice and on 1 June 1958 increased retired pay for all personnel by 6%. P.L. 88-132, 2 October 1963 established the principle of adjusting retired pay based on the Consumer Price Index (CPI). Under that law when the average CPI for a calendar year had increased by 3% or more above the CPI at the time of that last adjustment, retired pay would be increased by that percentage (rounded to the nearest tenth of one percent) effective 1 April of the following year. P.L. 89-132, 21 August 1965 nodified that formula to provide that when the monthly CPI increased by 3% over the CPI at the last adjustment and sustained that level for three consecutive months, retired pay would be adjusted to the higest percent of increase in that three month period, effective on the first day of the third month following that period. P.L. 89–1832 increased retired pay by 4.4% based on the CPI for September 1965. P.L. 90-207, 16 December 1967, further refined the retired pay adjustment formula (a) to insure that persons with the same grade, length of service and basic pay at the time of retirement received the same retired pay; (b) persons retired after an increase in basic pay rates will, at the first ensuing retired pay increase, receive an increase equal to the percent of increase in the CPI between the month preceding that basic pay increase and the month which was the basis for the retired pay increase (Base Index month). Effective 1 November 1969, P.L. 91-179 further amended the formula to provide that 1% would be added to the computed CPI percentage adjustment. Retired pay increase since June 1, 1958 [Numbers in parentheses are the percentage increases in retired pay referred to in Summary for month of August 1972 [Pertinent monthly CPI's and percentage increases above the base CPI] 16 Number of military personnel retired from active duty and receiving retired pay on June 30, 1971, by age on that date-Department of Defense |