Gen. Dempsey announces study on military retirement reforms forthcoming

That would give its findings and recommendations more strength, which might be needed because military compensation programs long have been considered too much of a political hot potato. And that means substantial changes will be difficult, even with a White House-commissioned review.

But changes are likely. Work done in 2010 by the Defense Business Board, which reports directly to the Defense secretary, found the Defense Department spends $46 billion annually on retirement pay. That figure excludes military retiree healthcare costs.

The military must bring those costs “under control,” Dempsey said.

The chairman said existing personnel and retirees already receiving benefits would be “grandfathered in” to any revised system. But that came with a caveat, with Dempsey telling the troops that if the “bottom falls out” of the U.S. economy, officials might have to re-think that provision.

Budget cuts will force the military to get smaller, but those personnel cuts will not be “dramatic.”

The impact of the first tranche of cuts will not be “as bad” as some news accounts make out, Dempsey said. For instance, he urged the troops against believing new cost growth in the F-35 program would mean officials are considering “lopping it off.”

“We need a fifth-generation fighter,” Dempsey said.   

In the meantime, the chairman made clear he is engaging on an issue that had the attention of his predecessor, Adm. Michael Mullen: the staggering unemployment rate of military veterans, which exceeds the national average.

Military officials must begin thinking about troops’ ability to transition back into civilian life as soon as an individual becomes a part of the armed forces, Dempsey said. Uniformed officials must identify skills that troops can use to “build a resume” that will help them gain employment after they have left the military, he said.