Reps. Palazzo and Crist Introduce Legislation Protecting Coast Guard Retiree Pay
Washington, March 5, 2020
Washington, DC - U.S. Representatives Steven Palazzo (R-MS) and Charlie Crist (D-St. Petersburg) announced the Coast Guard Retirement Parity Act (H.R. 6072), bipartisan legislation protecting the retirement benefits of United States Coast Guard (USCG) veterans and providing certainty for those who served.
Under the current “accrual” system, Army, Navy, Marine Corps, and Air Force retirement benefits are paid through the Military Retirement Fund, a fiscally responsible public pension fund managed by actuaries. Every year, the Department of Defense contributes to the fund in anticipation of future retiree costs, protecting retirees and taxpayers alike. Coast Guard retirement benefits, on the other hand, require an annual funding bill, which is not only less efficient but threatens retired Coast Guard servicemembers in the event of a government shutdown. The bill corrects this disparity and treats Coast Guard retirement benefits just like the other branches of the military.
“Veterans of our United States Coast Guard, just like all US veterans, have dedicated their lives to serving our nation and they should never have to worry about interruptions in their retirement benefits,” said Rep. Palazzo, member of the House Appropriations Subcommittee on Homeland Security. “During the 2019 government shutdown, over 50,000 Coast Guard retirees were facing the unfair reality that their retirement payments were not going to be provided because they’re currently excluded from the DOD retirement fund, and to me that’s completely unacceptable. Our bill addresses this disparity and ensures that these Coast Guard retirees and their families are taken care of and receive the benefits they earned.”
“The effects of the 2019 government shutdown were felt across the country, and Coast Guard servicemembers and their families were especially hit hard. Here in Pinellas County, not only did active duty Coasties go without pay, but Coast Guard retirees were days away from missed retirement payments from the government they swore an oath to protect,” said Rep. Crist. “Learning from the mistakes of the past, the Coast Guard Retirement Parity Act rights this wrong. If a shutdown were to happen again, Coast Guard retirees would be protected. This commonsense fix is good for the Coast Guard, good for those who served, and good for taxpayers. A grateful nation should safeguard and protect hard-earned veterans retirement benefits, and that is exactly what this legislation will accomplish.”
Background on H.R. 6072, the Coast Guard Retirement Parity Act:
Coast Guard veterans are military veterans and they have served their country for decades. However, during the January 2019 government shutdown, over 50,000 Coast Guard retirees were at risk of not receiving their hand-earned retirement payments.
Currently, retiree payments come out of the yearly Coast Guard budget as a mandatory appropriation, also known as “pay as you go.” However, Army, Navy, Marine Corps, and Air Force retirees are all paid by the Department of Defense, which switched from a “pay as you go” system to an accrual system in 1984. Each year, the Secretary of Defense transfers money into the Military Retirement Fund reflecting how much money they can expect to pay future retirees. Because of the difference in how retirement is funded, veterans from these branches of the military will never see their retirement pay impacted by government shutdowns.
With the Coast Guard as the only branch excluded from this fund, Coasties and their families are the only veterans at risk of not receiving their retirement pay should another shutdown occur.
Coast Guard Retirement Parity Act would right this wrong, bringing parity and equality to veterans across all branches of the military. Most importantly, the bill safeguards the future retirement pay for Coast Guard retirees.