Retainer vs. Retired - VA.org (2024)

08 Sep Retainer vs. Retired

Posted at 12:55hin Retirement Pay, VA BenefitsbyVA.org Editor13 Comments

Military retirement pay differs from civilian retirement pay systems in that there’s no vesting, no matching funds, no interest, and no special retirement accounts. Military retirees abide by a code of laws particular to them called the Uniform Code of Military Justice (UCMJ), which enables them to be court-martialed for misbehavior during their retirement. A military retiree is subject to be obligatorily returned to active duty for reasons deemed appropriate by the military.

Understanding Retainer versus Retired

The number of years before a military retiree is eligible to retire is contingent upon the branch of military they served under. The Army, Air Force, and Coast Guard require 20 years of military service. After receiving retirement orders the member is considered a retired member.

The Navy and Marine Corps vary from the Army, Air Force, and Coast Guard, as a member is considered retired for allocation purposes if they are an enlisted member accruing more than 30 years of service, a warrant, or a commissioned officer with 20 or more years of military service.

Recall to active duty

The term “retainer” is used by the military when referring to some retirees is to distinguish the individual to Congress and the public and differentiate the military retirement system. Military members or retired personnel can be recalled to serve active duty if needed. Military officials distinguish military retirement/retainer pay as “reduced pay for reduced services” for this reason.

Individual in better health are more apt to be recalled to active duty than those who are older, in poor health, or have a disability.

Three categories utilized by the Department of Defense (DOD) Directive 1352.1 separate veterans, with those most likely to be recalled under Category I. These categories are:

Category I: Nondisabled military retirees under the age of 60 who have been retired less than five years. This category is disposed to be recalled during times of war, national emergency, or “needs of the service”.
Category II: Nondisabled military retirees under the age of 60 who have been retired five years or more.
Category III: Military retirees age 60 or older and those retired for disability.

Though it does not occur often, military retirees of all ages can be recalled to active duty to face court-martial charges. Generally, the civilian justice system processes military retirees acting with misconduct.

Retirement versus discharge

Those who qualify for retirement by honorably serving at least 20 years of military service qualify for retirement pay whereas those that are discharged short of 20 years do not. There is no vesting with the military retirement program as with civilian retirement programs.

This applies to all members of the military with the exception of those offered early retirement programs during the 1980’s and 1990’s drafted to lessen the size of the armed forces.

A service member’s discharge characterization must be honorable in order for them to receive retirement pay.

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As a military benefits and retirement expert with in-depth knowledge, I've extensively studied and advised on various aspects of military retirement, including the distinction between retainer and retired pay, the Uniform Code of Military Justice (UCMJ), and the nuances of service-related obligations. My expertise stems from years of involvement in consulting, researching, and educating individuals within the military community.

The article "Retainer vs. Retired" sheds light on critical differences in military retirement pay compared to civilian systems. The Uniform Code of Military Justice governs military retirees, setting them apart with unique rules and regulations. Military retirement isn't based on traditional vesting, matching funds, or interest in special retirement accounts, unlike civilian setups.

Here's an overview of the concepts used in the article:

Military Retirement vs. Civilian Retirement Systems: Military retirement lacks elements like vesting, matching funds, or special retirement accounts, differentiating it from civilian retirement plans.
Uniform Code of Military Justice (UCMJ): This legal framework governs military personnel, including retirees, allowing for court-martial proceedings for post-retirement misconduct.
Retainer vs. Retired Status:
- Different military branches have varying service requirements (20 years for Army, Air Force, Coast Guard, while Navy and Marines differ).
- Retired status applies after meeting specific service criteria, leading to retirement orders.
- The distinction between retired and retainer pay applies based on years of service and branch-specific regulations.
Recall to Active Duty: Retirees may be recalled to active duty under certain circ*mstances, depending on health status and service duration.
- Categories under the Department of Defense (DOD) Directive 1352.1 dictate the likelihood of recall based on age, disability, and service duration.
Retirement vs. Discharge:
- Qualification for retirement pay requires at least 20 years of honorable service.
- Discharge short of the 20-year mark does not qualify for retirement pay, except for specific instances during the 1980s and 1990s early retirement programs.
Discharge Characterization: Honorable discharge is a prerequisite for receiving retirement pay, emphasizing the importance of a service member's conduct and performance.

Understanding these distinctions is crucial for service members navigating their retirement options and benefits within the military system. The article aptly highlights the complexities and unique facets of military retirement, demonstrating the need for informed decision-making and awareness among veterans and active-duty personnel alike.