May 7, 2009

Washington, D.C. – U.S. Representative Carol Shea-Porter and U.S. Senator Jeanne Shaheen today introduced the Military Retirement Pay Fairness Act of 2009 to protect veterans from facing severe financial hardship when required to repay separation benefits to the Department of Defense (DOD). The legislation, which U.S. Senator Judd Gregg cosponsored in the Senate and U.S. Representative Paul Hodes cosponsored in the House, would reform an unnecessarily harsh formula that requires the DOD to aggressively recoup separation benefits previously paid to service members, regardless of whether the formula would cause severe financial hardship. The legislation was prompted by retired Air Force Sergeant Wayne Merritt of Dover, New Hampshire who lost over half his monthly retirement pension in April due to the unfair repayment formula. 

“As a member of the Armed Services Committee and a former military spouse, I understand the unique challenges military families often face,” said Congresswoman Shea-Porter. “I am so pleased that the New Hampshire delegation will be helping not only Sergeant Merritt, but also all of the other veterans who are struggling with this unfair repayment formula.”

“Especially now during this economic crisis, we need to make sure we’re standing up for the veterans that have stood up for us,” said Shaheen. “The Military Retirement Pay Fairness Act will protect veterans from an unfair repayment schedule that could cost them their livelihoods, their homes and more. I’m proud to stand with the entire New Hampshire delegation in fighting for Sergeant Merritt and all our veterans to protect them from unfair economic hardship.” 

Senator Gregg stated, “I am pleased today to join with the New Hampshire delegation to introduce this bipartisan legislation which will go a long way in alleviating the financial hardships facing many New Hampshire veterans. We must continue to work to ensure that our veterans, who have bravely served our country, have the resources and benefits they deserve. This is especially true during these tough economic times, which is why we have introduced legislation to allow for flexibility in addressing certain pension issues, which can pose sudden and significant financial challenges to veterans. I urge my colleagues to quickly consider this important measure to provide much needed financial relief to veterans throughout our country.”

“I am proud to stand with our delegation to protect veterans from unfair financial practices,” said Congressman Paul Hodes. “Stories like Sergeant Merritt’s are far too common and we must do everything we can to stand up for our veterans who have served our country with distinction. The Military Retirement Pay Fairness Act will protect veterans from these practices that could devastate them and their families.” 

“Like many veterans, I rely on my pension to pay my mortgage and my bills,” said Sergeant Wayne Merritt. “Losing half my retirement pension would make it extremely difficult to cover our mortgage payments, and I’m worried my family may not be able to stay in our home. I’m sure other veterans are facing similar challenges because of this unfair repayment formula. I’m glad Senator Shaheen, Congresswoman Shea-Porter, Senator Gregg and Congressman Hodes have taken up this cause to make sure our veterans don’t suffer unnecessarily during this economic crisis.” 

When members of the military accept a separation benefit for early retirement but later reenlist and qualify for a pension, the DOD is statutorily bound by a rigid formula to recoup the separation benefit by deducting a portion of their pension. The Military Pay Fairness Act of 2009 would help protect our nation’s veterans by providing the DOD with the flexibility it needs to develop manageable monthly payment plans that do not impose undue financial hardship on service members. It also requires the DOD to consult with veterans to determine a fair repayment schedule for separation benefits, taking into account each veteran’s financial situation. Under the legislation, the DOD is allowed to recoup no more than 25% of a veteran’s pension each month, and it requires the DOD to notify service members of impending recoupment no less than 90 days before repayment begins so they can prepare for the reduction in income. 

Merritt accepted a separation benefit for early retirement after serving with the Air Force for 14 years in 1992. He later joined the New Hampshire Air National Guard and served his country for an additional 10 years, which qualified him for a pension. In March of this year, the DOD informed Merritt it would be begin recouping his separation benefit in April according to the statutorily required formula, which meant Merritt would lose over half his pension. If enacted, the Military Retirement Pay Fairness Act would protect Merritt from the unfair repayment formula and allow him to negotiate a manageable repayment schedule with the DOD. 

The legislation is supported by the Veterans of Foreign Wars and the Military Officers Association of America.