The Current Military Retirement System: Redux

Following our analysis of basic MFERS, we consider MFERS with two different types of pay raises. The first type is an across-the-board pay raise—all members get identical percentage raises. This is the type of raise generally given military members each year to adjust for costof-living changes and other pay trends in the civilian sector. The second type is a skewed pay raise. In this case, those in the upper grades would get larger percentage raises. As discussed in Chapter Three, there are several distinct advantages associated with skewing the pay structure. We find that not only can MFERS with a skewed pay raise produce the same general steady-state force structure as REDUX or MFERS with an across-the-board pay raise, but it raises the measure of productivity while lowering costs.