@book {9151, title = {Workforce Downsizing and Restructuring in the Department of Defense: The Voluntary Separation Incentive Payment Program Versus Involuntary Separation}, series = {Research Reports}, year = {2016}, pages = {106}, publisher = {RAND Corporation}, organization = {RAND Corporation}, address = {Santa Monica, CA}, abstract = {The U.S. Department of Defense (DoD) plans to reduce the size of its civilian workforce through 2021. An important downsizing tool available to personnel managers is the Voluntary Separation Incentive Payment (VSIP), but its cap, $25,000, has not been adjusted since 1993. The authors of this report used RAND{\textquoteright}s dynamic retention model (DRM) for DoD civilians to compare the cost-effectiveness of alternative approaches to achieving a given downsizing. These include packages of VSIP, voluntary early retirement authority (VERA), and involuntary separation if also needed, versus using involuntary separation alone. Increasing the VSIP cap to $41,000 (the real value of VSIP in 2015 dollars) increases voluntary separations by about 45 percent and, compared with the $25,000 cap, would result in greater net savings to DoD and greater net savings in government outlays over five years. Although the apparent cost savings, as reflected in the budget, are greater when involuntary separations are used, there are off-budget costs, such as workplace turmoil, disruption, and lower morale, associated with involuntary separation. The authors used the DRM to estimate the cost borne by employees who are involuntarily separated in terms of the value of the loss of employment, net of the severance pay they receive. Such costs could potentially hurt retention and workforce productivity among those who remain. Using this broader concept of cost that includes both the cost to the government and the cost borne by employees, VSIP generates more net savings and is more cost-effective at the margin than involuntary separation.}, keywords = {Military service}, isbn = {9780833096388}, doi = {10.7249/RR1540}, url = {http://www.rand.org/pubs/research_reports/RR1540.html}, author = {Asch, Beth and Hosek, James and Mattock, Michael and Knapp, David and Kavanagh, Jennifer} } @article {5874, title = {The Retirement and Social Security Benefit Claiming of U.S. Military Retirees}, year = {2015}, institution = {Ann Arbor, MI, Michigan Retirement Research Center}, abstract = {After serving 20 years in the active component of the U.S. military, service members can retire from the military, as young as age 38, and begin collecting a monthly pension benefit for the remainder of their life. In this paper, we ask: do active duty military retirees exit the labor force earlier or later because of their access to military retirement benefits? Do they alter their Social Security claiming decisions? We theorize that access to a consistent source of income may encourage earlier retirement through a standard income effect, but the military pension may also increase a retiree s post-military job search, allowing for a greater wage and improved job satisfaction due to a better employer-employee match. Access to a steady source of pension income may also reduce short-term liquidity constraints, encouraging military retirees to delay claiming their Social Security benefit in order to benefit from delayed retirement. We estimate the impact of military retiree pension income on retirement empirically using the 1992 Health and Retirement Study cohort. We identify the military pension effect in a difference-in-difference model by exploiting a surprise change in military-retiree benefits in 2001 that extended Tricare health benefits to Medicare eligible military retirees and their spouses through the end of their lives. TFL eliminated the need to purchase Medigap coverage, thereby eliminating a cost that could cut into disposable income from their military annuity. A key limitation of the analysis is that the HRS includes relatively few military retirees.}, keywords = {Demographics, Pensions, Retirement Planning and Satisfaction, Social Security}, author = {Knapp, David and Asch, Beth and Hosek, James and Mattock, Michael} }