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Retainer vs. Retired

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.

Those in the Navy and Marine Corps unable to meet the 30 years of service requirement but have accrued more than 20 years are transferred to the Fleet Reserve/Fleet Marine Corps Reserve, and their pay is considered retainer pay.

Retired pay and retainer pay are considered the same by the law as the amount of retainer pay and retired pay an individual receives are unvarying.

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. Visit Chapter 2 for service characterizations.

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