10 U.S.C. § 1401a: Adjustment of retired pay and retainer pay to reflect changes in Consumer Price Index

Unless otherwise specifically provided by law, the retired pay of a member or former member of an armed force may not be recomputed to reflect any increase in the rates of basic pay for members of the armed forces. Effective on December 1 of each year, the Secretary of Defense shall increase the retired pay of members and former members entitled to that pay in accordance with paragraphs (2) and (3). the price index for the base quarter of that year, exceeds the base index. the percent determined under paragraph (2); and 1 percent. If in any case in which an increase in retired pay that would otherwise be made under paragraph (3) is not made by reason of law (other than any provision of this section), then (unless otherwise provided by law) when the next increase in retired pay is made under this subsection, the increase under paragraph (3) shall be carried out so as to achieve the same net increase in retired pay under that paragraph that would have been the case if that law had not been enacted. Notwithstanding paragraph (3), if a member or former member participates in the modernized retirement system by reason of section 1409(b)(4) of this title (including pursuant to an election under subparagraph (B) of that section), the Secretary shall increase the retired pay of such member in accordance with paragraph (2). Any increase in retired pay under this subsection shall be made in accordance with regulations prescribed by the Secretary of Defense. the price index for the base quarter of that year, exceeds the price index for the calendar quarter immediately before the calendar quarter in which the rates of monthly basic pay on which the retired pay is based became effective. the base index, exceeds the price index for the calendar quarter immediately before the calendar quarter in which the rates of monthly basic pay on which the retired pay is based became effective. Paragraphs (1) and (2) apply to a member or former member of an armed force who first became a member of a uniformed service before August 1, 1986 , and whose retired pay base is determined under section 1406 of this title . the price index for the base quarter of that year, exceeds the price index for the calendar quarter immediately before the calendar quarter during which the member became entitled to retired pay. the price index for the base quarter of that year, exceeds the price index for the calendar quarter immediately before the calendar quarter during which the member became entitled to retired pay; and one-fourth of 1 percent for each calendar quarter from the quarter described in paragraph (1)(B) to the quarter described in paragraph (1)(A). The monthly retired pay of a member or a former member of an armed force who first became a member of a uniformed service before September 8, 1980 , and who initially became entitled to that pay on or after January 1, 1971 , may not be less than the monthly retired pay to which he would be entitled if he had become entitled to retired pay at an earlier date based on the grade in which the member is retired, adjusted to reflect any applicable increases in such pay under this section. In computing the amount of retired pay to which such a member or former member would have been entitled on that earlier date, the computation shall be based on his grade, length of service, and the rate of basic pay applicable to him at that time, except that such computation may not be based on a rate of basic pay for a grade higher than the grade in which the member is retired. This subsection does not authorize any increase in the monthly retired pay to which a member was entitled for any period before October 7, 1975 . Subject to subsections (d) and (e), the monthly retired pay of a member or former member of an armed force who first became a member of a uniformed service on or after September 8, 1980 , may not be less, on the date on which the member or former member initially becomes entitled to such pay, than the monthly retired pay to which the member or former member would be entitled on that date if the member or former member had become entitled to retired pay on an earlier date, adjusted to reflect any applicable increases in such pay under this section. However, in the case of a member or former member whose retired pay is computed subject to section 1407(f) of this title , paragraph (1) (rather than the preceding sentence) shall apply in the same manner as if the member or former member first became a member of a uniformed service before September 8, 1980 , but only with respect to a calculation as of the date on which the member or former member first became entitled to retired pay. The percentage of the first adjustment under this section in the retired pay of any person, as determined under subsection (c)(1), (c)(2), (d), or (e), may not exceed the percentage increase in retired pay determined under subsection (b)(2) that is effective on the same date as the effective date of such first adjustment. The term “price index” means the Consumer Price Index (all items, United States city average) published by the Bureau of Labor Statistics. The term “base quarter” means the calendar quarter ending on September 30 of each year. The term “base index” means the price index for the base quarter for the most recent adjustment under subsection (b). The term “retired pay” includes retainer pay. For purposes of this section, the price index for a calendar quarter is the arithmetical mean of the price index for the three months comprising that quarter. Notwithstanding the repeal of such subsection [subsec. (e) of this section], the provisions of such subsection shall apply in the case of any member or former member of the Armed Forces eligible to retire on the date of the enactment of this Act [ Sept. 24, 1983 ] for a period of three years after such date in the same manner such provisions would have applied had they not been repealed. The amount of retired or retainer pay of any member or former member of the Armed Forces who was eligible to retire on the date of the enactment of this Act [ Sept. 24, 1983 ] and who becomes entitled to such pay at any time after the end of the three-year period beginning on the date of the enactment of this Act may not be less than it would have been had he become entitled to retired or retainer pay on the day before the end of such three-year period.” The amendments to be made by section 403 of the Bipartisan Budget Act of 2013 ( Public Law 113–67 ; 127 Stat. 1186 ) [amending this section and section 1410 of this title ], as amended by section 10001(a) of the Department of Defense Appropriations Act, 2014 (division C of Public Law 113–76 ; 128 Stat. 151 ), section 2 of Public Law 113–82 ( 128 Stat. 1009 ), and section 623 of the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 ( Public Law 113–291 ; 128 Stat. 3403 ). The amendments to be made by section 10001(b) of the Department of Defense Appropriations Act, 2014 [div. C of Pub. L. 113–76 , amending this section and sections 1413a and 1414 of this title].” The fiscal year 1995 increase in military retired pay shall (notwithstanding subparagraph (B) of section 1401a(b)(2) of title 10 , United States Code) first be payable as part of such retired pay for the month of March 1995. The term ‘fiscal year 1995 increase in military retired pay’ means the increase in retired pay that, pursuant to paragraph (1) of section 1401a(b) of title 10 , United States Code, becomes effective on December 1, 1994 . The term ‘retired pay’ includes retainer pay. Subsection (a) shall be effective only if there is appropriated to the Department of Defense Military Retirement Fund (in an Act making appropriations for the Department of Defense for fiscal year 1995 that is enacted before March 1, 1995 ) such amount as is necessary to offset increased outlays to be made from that fund during fiscal year 1995 by reason of the provisions of subsection (a). There is authorized to be appropriated for fiscal year 1995 to the Department of Defense Military Retirement Fund the sum of $376,000,000 to offset increased outlays to be made from that fund during fiscal year 1995 by reason of the provisions of subsection (a).” Congress, in the Omnibus Budget Reconciliation Act of 1993 [ Pub. L. 103–66 , see Tables for classification], changed the effective dates for future cost-of-living adjustments for military retired pay and for Federal civilian retirement annuities, which (before that Act) were provided by law to be made effective on December 1 each year. The timing, and the percentage of increase, of military and Federal civilian retirees’ cost-of-living adjustments have been linked for decades. The effect of the enactment of the Omnibus Budget Reconciliation Act of 1993 was to abandon the longstanding congressional practice of treating military and Federal civilian retirees identically in matters related to cost-of-living adjustments. as a matter of simple equity and fairness, it is imperative that cost-of-living adjustments in retirement benefits for military and Federal civilian retirees be returned to an identical schedule as soon as possible, but not later than January 1, 1999 ; if after October 1, 1998 , there is, by law, a difference between the date on which a cost-of-living adjustment for Federal civilian retirees takes effect and the date on which a cost-of-living adjustment for military retirees takes effect, then the difference in those effective dates should be eliminated by requiring that cost-of-living adjustments for both classes of retirees become effective on the earlier of the two dates; and if after October 1, 1998 , there is, by law, a difference between the first month for which a cost-of-living adjustment for civilian retirees is payable and the first month for which a cost-of-living adjustment for military retirees is payable, then the difference in the months for which those adjustments are first payable should be eliminated by requiring that the cost-of-living adjustments for both classes of retirees first become payable for the earlier of the two months.” The Secretary concerned may, for purposes of the computation under section 1401a(f) of title 10 , United States Code, of the retired pay of military retirees described in subsection (b), waive any administrative time-in-grade regulation (as described in subsection (d)) that would otherwise apply to such computation. Any such waiver may be made retroactive, in the case of any such retiree, to the date on which that retiree initially became entitled to retired pay. who initially became entitled to retired pay on or after January 1, 1971 , and before the date of the enactment of this Act [ Oct. 5, 1994 ]; whose retired pay, by reason of the provisions of section 1401a(f) of title 10 , United States Code (the so-called ‘Tower amendment’), was initially computed as an amount greater than would have been the case but for that section; and in the case of an individual retired in an enlisted grade, had served in the grade in which the retiree retired for a period that was less than the period prescribed by the applicable administrative time-in-grade requirement described in subsection (d); and was subject to an administrative time-in-grade requirement described in subsection (d) that established a time-in-grade requirement that was longer than the statutory time-in-grade requirement applicable to that member; and had served in the grade in which the retiree retired for a period that was less than the period prescribed by such administrative time-in-grade requirement but not less than the statutory time-in-grade requirement applicable to that member. For purposes of subsection (b)(3), the earlier computation date applicable to a military retiree is the date that (under such section 1401a(f) as in effect on the date of the member’s retirement) was the ‘earlier date’ that was used as the basis for the computation of the retiree’s retired pay. A regulation that may be waived under subsection (a) is any regulation (not required by law) that establishes a minimum period of time that a member of the Armed Forces must have served in a grade on active duty in order to be eligible to retire in that grade. The Secretary concerned may exercise the authority provided in subsection (a) in the case of an individual military retiree or for any group of military retirees. For purposes of this section, the term ‘military retiree’ means a member or former member of the Armed Forces who is entitled to retired pay. For purposes of this section, the term ‘Secretary concerned’ has the meaning given such term in section 101 of title 10 , United States Code.” The fiscal year 1995 increase in military retired pay shall (notwithstanding subparagraph (B) of section 1401a(b)(2) of title 10 , United States Code) first be payable as part of such retired pay for the month of March 1995. The term ‘fiscal year 1995 increase in military retired pay’ means the increase in retired pay that, pursuant to paragraph (1) of section 1401a(b) of title 10 , United States Code, becomes effective on December 1, 1994 . The term ‘retired pay’ includes retainer pay. ” The increase in the retired and retainer pay of members and former members of the uniformed services which but for this section would be made effective September 1, 1980 , under the provisions of paragraph (2)(B) of section 1401a(b) of title 10 , United States Code, shall not be made. In making the determination required by the provisions of paragraph (1)(A) of section 1401a(b) of title 10 , United States Code, to be made on January 1, 1981 , or within a reasonable time thereafter, the Secretary of Defense shall determine the percent change in the index (as such term is defined in section 1401a(a) of title 10 , United States Code) published for December 1980 over the index published for December 1979 (rather than over the index published for June 1980). The increase in the retired and retainer pay of members and former members of the uniformed services to be made effective March 1, 1981 , under the provisions of paragraph (2)(A) of such section shall, in lieu of the increase prescribed by such paragraph, be the percent change computed under subparagraph (A), adjusted to the nearest ⅒ of one percent. The President shall by Executive order provide for only one cost-of-living adjustment in the annuities paid under the Central Intelligence Agency [Retirement] Act of 1964 for Certain Employees ([former] 50 U.S.C. 403 note) during the period beginning on September 1, 1980 , and ending on August 31, 1981 . Such adjustment shall be effective March 1, 1981 , and shall be made in the same manner and percentage as the adjustment provided for in paragraphs (1) and (2) for the retired and retainer pay of members and former members of the uniformed services. Paragraphs (1), (2), and (3) shall not take effect unless similar legislation is enacted which provides for only one cost-of-living increase in annuities paid under subchapter III of chapter 83 of title 5, United States Code, during the period beginning on September 1, 1980 , and ending on August 31, 1981 . Effective August 31, 1981 , but subject to paragraph (2), section 1401a(b), of title 10, United States Code, relating to adjustment of retired pay and retainer pay to reflect changes in the Consumer Price Index, is amended to read as follows: “ ‘(b) Each time that an increase is made under section 8340(b) of title 5 in annuities paid under subchapter III of chapter 83 of such title, the Secretary of Defense shall at the same time increase the retired and retainer pay of members and former members of the armed forces by the same percent as the percentage by which annuities are increased under such section.’. The amendment made by paragraph (1) shall not take effect unless legislation is enacted which provides for the adjustment of annuities paid under subchapter III of chapter 83 of title 5, United States Code, on a once-a-year basis. In the event such legislation is enacted, such amendment shall become effective with respect to adjustments in the retired pay and retainer pay of members and former members of the uniformed services at the same time that the legislation providing for such a once-a-year adjustment of annuities paid under subchapter III of chapter 83 of title 5, United States Code, becomes effective. If legislation described in paragraph (2) is enacted to provide for the adjustment of annuities paid under subchapter III of chapter 83 of title 5, United States Code, on a once-a-year basis, the President shall exercise the authority vested in him under section 292 of the Central Intelligence Agency [Retirement] Act of 1964 for Certain Employees ([former] 50 U.S.C. 403 note) to provide for cost-of-living adjustments in the annuities paid under such Act on an identical basis. If at the time the first adjustment in retired and retainer pay is made under section 1401a(b) of title 10 , United States Code, as amended by paragraph (1) of this subsection, the period upon which the most recent adjustment in such retired and retainer pay was computed is not identical to the period upon which the most recent adjustment in annuities under subchapter III of chapter 83 of title 5, United States Code, was computed, then the percentage increase to be made under such section 1401a(b) at the time of the first such adjustment shall be computed in the same manner as the percentage increase made at the same time in annuities under subchapter III of chapter 83 of title 5, United States Code, is computed, but shall be based on the period beginning on the last day of the period upon which the most recent adjustment in such retired and retainer pay was computed and ending on the last day of the period upon which the adjustment being made at the same time in annuities under such subchapter III is computed. The President shall by Executive order provide for a similar computation of the adjustment in annuities paid under the Central Intelligence Agency [Retirement] Act of 1964 for Certain Employees ([former] 50 U.S.C. 403 note) which is made at the same time as the increase in retired and retainer pay to which the preceeding [preceding] sentence is applicable. the Armed Forces; and the commissioned corps of the National Oceanic and Atmospheric Administration and of the Public Health Service.” the retired pay of any individual who served as sergeant major of the Marine Corps and who completed such service before December 16, 1967 , shall be computed based upon a rate of basic pay of the sum of (1) the highest rate of basic pay to which such individual was entitled while so serving, and (2) $150. For the purpose of computing any adjustment under section 1401a of title 10 , United States Code, in the retired pay of any individual whose retired pay is affected by subsection (a), the rate of basic pay provided under such subsection for the purpose of computing the retired pay of such individual shall be considered to have been the rate of basic pay applicable to such individual at the time of his retirement, and any adjustment under such section 1401a in the retired pay of such individual before September 30, 1978 , shall be readjusted to reflect such rate of basic pay. Any change in the retired pay of any individual by reason of the enactment of this Act shall be effective for months beginning after September 30, 1978 . The enactment of this Act shall not reduce the retired pay of any individual.” The amendments made by subsections (a) [to subsec. (b) of this section] and (b) [to provisions formerly set out as a note under section 403 of title 50 ] shall not become effective unless legislation is enacted repealing the so-called 1 per centum add-on provision applicable to the cost-of-living adjustment of annuities paid under chapter 83 of title 5, United States Code. In the event such legislation is enacted, such amendments shall become effective with respect to the cost-of-living adjustment of the retired pay and retainer pay of members and former members of the Armed Forces and the cost-of-living adjustment of annuities paid under the Central Intelligence Agency [Retirement] Act of 1964 for Certain Employees at the same time the repeal of such 1 per centum add-on provision becomes effective with respect to such cost-of-living adjustment of annuities paid under such chapter 83. If any change other than the repeal of the so-called 1 per centum add-on provision referred to in paragraph (1) is made in the method of computing the cost-of-living adjustment of annuities paid under chapter 83 of title 5, United States Code, the President shall make the same change in the cost-of-living adjustment of retired pay and retainer pay of members and former members of the Armed Forces and the cost-of-living adjustment of annuities paid under the Central Intelligence Agency [Retirement] Act of 1964 for Certain Employees. Any change made under this paragraph shall have the same effective date as the effective date applicable to such change made in annuities under chapter 83 of title 5, United States Code. The provisions of paragraphs (1) and (2) relating to any change in the method of computing the cost-of-living adjustment of the retired pay or retainer pay of members and former members of the Armed Forces shall be applicable to the computation of cost-of-living adjustments of the retired pay of commissioned officers of the National Oceanic and Atmospheric Administration and the retired pay of commissioned officers of the Public Health Service.” Notwithstanding any other provision of law, effective on the date of enactment of this Act [ Dec. 28, 1973 ], the pay and allowances of members of the Armed Forces to whom this Act applies shall be increased to amounts equal to the amounts such pay and allowances would have been increased if the pay and allowances of such members had been increased, under section 1401a(b) of title 10 , United States Code, by the same percentage rates, consecutively compounded, that the retired pay or retainer pay of members and former members of the Armed Forces entitled to retired pay or retainer pay since October 1, 1967 , has been increased, and such member shall, on and after the date of enactment of this Act [ Dec. 28, 1973 ], have his pay and allowances increased effective the same day and by the same percentage rate that the retired pay or retainer pay of members and former members of the Armed Forces is increased under such section 1401a(b). The Act of June 26, 1948 , chapter 677 ( 62 Stat. 1052 ) [which authorized the appointment of one officer in the Regular Army in the permanent grade of general, one officer in the Regular Air Force in the permanent grade of general, and one officer in the Regular Navy in the permanent grade of admiral]. The Act of September 18, 1950 , chapter 952 (64 Stat. A224) [which authorized the appointment of Omar N. Bradley to the permanent grade of General of the Army]. No amounts shall be paid, as the result of the enactment of this section, for any period prior to the date of enactment of this section [ Dec. 28, 1973 ].”