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The Defense Department submitted a proposal for a 401(k)​-style retirement plan to Congress on June 10, according to a Pentagon release. “The department carefully reviewed proposals offered by the Military Compensation and Retirement Modernization Commission as well as Congress,” said Pentagon spokesman Army Col. Steve Warren. “And, in crafting its final recommendation, the department considered all elements of current and potential retirement plans and built a blended system that ... best enables us to maintain the readiness of the all-volunteer force.” Under the proposal, DOD would create a defined contribution element through the Thrift Savings Plan and automatically contribute an amount equal to one percent of a service member’s pay through separation or retirement, “with vesting after two years of service and additional matching contributions of up to five percent of basic pay starting after completion of four years of service and continuing through separation or retirement," states the release. The proposal also allows each service to offer a continuation pay bonus to service members with eight to 16 years of service. By comparison both the House and Senate versions of the defense authorization bill provides an additional matching contribution upon completion of the second year of service and offers continuation pay at the 12-year mark. “This change to a blended retirement system is a key step in modernizing the department’s ability to recruit, retain, and maintain the talent we require of our future force,” said Warren. (See also Moving Out on Military Compensation Reform.)