Military Forcing Some Officers to Retire with Enlisted Pay

Update: This article was originally published in Nov. 2014 and covered involuntary retirements for a select group of military officers. Due to the way the law was written, many of these officers were scheduled to retire with enlisted pay. That is, until their story was made public and resulted in a Congressional inquiry. The Army…
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Update: This article was originally published in Nov. 2014 and covered involuntary retirements for a select group of military officers. Due to the way the law was written, many of these officers were scheduled to retire with enlisted pay. That is, until their story was made public and resulted in a Congressional inquiry. The Army reversed course and allowed these members to remain on duty and retire as commissioned officers. Read more about the aftermath on The Military Guide, which helped break this story. Or continue reading to see what happened, and why.

Very few military members remain on active duty long enough to earn a military pension. The latest numbers show that only about 17% of servicemembers reach the full 20 years required for an active duty pension. It’s a wonderful achievement and a testament to the hard work and dedication it takes to make a career of the military.

That’s why it’s disheartening to read about certain service members who are being forced out of the military due to Force Shaping. It’s difficult for anyone who is forced out of the military, particularly when they have chosen to make it a career.

Officers forced to retire with enlisted pay
Some officers are being forced to retire before reaching enough service time to retire as an officer.

Some military members are being forced to retire early under the TERA program. This is unfortunate, as many retirees under TERA wish to complete their full 20 years of service and receive their full pension (retirees under TERA take a reduced pension equal to the number of years served * 2.5%, times a reduction factor based on the number of years they retired early).

But there is one class of service members who arguably have it worse than others: some commissioned officers are being forced to retire from the military, but they don’t have the minimum service time to retire as an officer. And unfortunately, they are being retired as enlisted members.

Rules for Retiring as an Officer

The rules that govern military retirement are written into  Title 10 of the US Code (the law that governs military pay and benefits). This can get a bit complicated, so I wrote a full guide that covers the service requirements for retiring as an officer.

This next section is a synopsis of the general rules.

Retiring from Active Duty

Military members to have 20 years of active duty service to be eligible for active duty retirement benefits, unless they qualify under TERA rules, which require the member to have at least 15 years of service.

To retire as an officer, the service member must have served at least 10 years as a commissioned officer. However, the Secretary of Defense can authorize the Secretaries of each service to allow members with only 8 years of commissioned service to retire as an officer.

Here are the applicable laws for officers retiring from active duty (note: these showcase the Army laws, as this is affecting more Army members than other services; the laws for the other services are similar):

  • Title 10 U.S. Code section 7311: “the Secretary of the Army may, upon the officer’s request, retire a regular or reserve commissioned officer of the Army who has at least 20 years of service computed under section 7236 of this title, at least 10 years of which have been active service as a commissioned officer.”
  • Title 10 U.S. Code section 7311: “The Secretary of Defense may authorize the Secretary of the Army, during the period specified in paragraph (2), to reduce the requirement under subsection (a) for at least 10 years of active service as a commissioned officer to a period (determined by the Secretary of the Army) of not less than eight years.”

In other words, you need the following to retire as an officer from active duty:

  • 20 years of active duty service (waiverable to 15 or more under TERA)
  • 10 years of commissioned service (waiverable to 8 years if authorized by the SecDef).

Retiring from the Reserve Component

Retiring from the Reserve Component (Guard or Reserves) requires members to have 20 good years of service.

There is no service time requirement to retire as an officer in the Reserve Component.

Here are the applicable laws for officers retiring from the Reserve Component (Guard or Reserves):

(a)Except as provided in subsection (c), a person is entitled, upon application, to retired pay computed under section 12739 of this title, if the person—

  • (1) has attained the eligibility age applicable under subsection (f) to that person;
  • (2) has performed at least 20 years of service computed under section 12732 of this title;
  • (3) in the case of a person who completed the service requirements of paragraph (2) before April 25, 2005, performed the last six years of qualifying service while a member of any category named in section 12732(a)(1) of this title, but not while a member of a regular component, the Fleet Reserve, or the Fleet Marine Corps Reserve, except that in the case of a person who completed the service requirements of paragraph (2) before October 5, 1994, the number of years of such qualifying service under this paragraph shall be eight; and
  • (4) is not entitled, under any other provision of law, to retired pay from an armed force or retainer pay as a member of the Fleet Reserve or the Fleet Marine Corps Reserve.

Notice there is no language regarding time in service as a commissioned officer.

The Impact on Officers Being Forced to Retire Early

At the time this article was originally written in 2014, the Army was forcing many officers to retire under Force Shaping. Unfortunately, some of the officers who were forced to retire were let go just shy of the required 8 years.

In some cases, officers are allowed to get a waiver to extend their service up to 60 days or so to reach the required service time. But others aren’t so lucky and are being forced from the service just short of reaching the requirement time served to retire as an officer. In fact, some of them were just months shy of reaching the required 8 years.

And the difference is huge.

Impact on Retirement Pay

There are two major impacts on retirement. The first, is these servicemembers retire as enlisted members, not officers. Their paperwork and retiree cards will be in the enlisted ranks. The other impact is on retirement pay.

The immediate impact on the pension is obvious – these soon-to-be-retirees will be earning substantially less in their retirement checks than they would have had they been able to serve an additional year or two. I’ll give an example in just a moment. But here is the worst part: these servicemembers’ pensions will be paid based on their previous enlisted pay.

Using High-3 rules, you have to go back to their highest three years of pay at their enlisted ranks. So not only do you have to take away their Officer Pay as though it never happened, these servicemembers’ pensions will be based on old pay scales at their previous rank. To add insult to injury, these service members are artificially held at their last pay grade. So someone who served as an E-7 is forever an E-7 for pay and retirement purposes, even if they earned the rank of Captain.

Let that sink in a moment.

These servicemembers didn’t have the same opportunities for promotion through the enlisted ranks. Its very possible many of these officers would have been able to promote one or two times as an enlisted member. Some of them may have been able to max out their pay scale and become E-9’s and potentially extend their service well beyond 20 years. But they weren’t given that opportunity.

Reduced Pension for Enlisted Vs. Officer:

Here is a sample based on an E-7 pay grade and O-3E at 20 years service (7 years as an officer)*. (Note: the numbers referenced utilize the 2014 pay scale, which was when this article was originally published).

  • Enlisted Base Pay (E-7, 18-20 years service): $4,323.90
  • Enlisted Retirement: $2,161.95
  • Officer Base Pay (O3-E, 18-20 years service): $6,726.00
  • Officer Retirement: $3,363.00
  • Difference: $1,201.05 per month

As you can see, there is a large difference – an approximate cut of 35%.

*These numbers are actually rough estimates. High-3 rules average the pay for the last 3 years of service at the highest grade held. So it would be an average of these salaries and the preceding two years.

The primary benefit these servicemembers received for being officers was increased pay while they were officers (increased base pay and BAH, however they had reduced BAS rates and were required to pay for all uniforms out of pocket).

Additional Reading on This Topic

Being forced out of the military is difficult for anyone, regardless of how long you served. There are many who are lucky and are simply able to retire with full benefits, even if they were forced to retire earlier than they wished. Others may have to retire with a reduced pension under TERA rules. And then there are the unlucky few who rose from the enlisted ranks, answered the call to become an officer, and were later forced out before they could retire as an officer. This is an unfortunate situation, and unfortunately, one I don’t have answers for.

Here are some additional articles about this topic:

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About Ryan Guina

Ryan Guina is The Military Wallet's founder. He is a writer, small business owner, and entrepreneur. He served over six years on active duty in the USAF and is a current member of the Illinois Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

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  1. Mark says

    I’m retired US Army Enlisted during the drawdown in 90’s I took early retirement at 18 years. I was looking at medical board. The SGM said stay in. My CO said if I was you I would retire. I had great respected for my CO who was a SGT when he commisioned as a 2nd LT. No regrets. I had a few months over 18. The Army gave me 19 for retirement. It’s ashame that those falling short are loosing so much.

  2. Dave G. says

    I have an upcoming disability retirement. I was commissioned as a reserve officer with prior service as active duty enlisted. My separation authorization currently says “enlisted”. Where is the statute that states the 10 year Officer service requirement does not apply to reservists? Does the 10 year requirement even apply to disability retirements? (5 years as a Commissioned Officer)

  3. Chris says

    The 10 year commissioned time rule doesn’t apply to chief warrant officers correct? Say if I go from E-7 to WO at 14 years, retire at CWO3 at 20, I would still be eligible for CWO3 retirement pay?

  4. AARON says

    I’ve got a strange question and apologize if it has already been answered. If one were to retire after 10 years at the rank of 0-4 and them become a warrant officer in another branch to finish out their 20 years. Would their retirement reflect 0-4 with 20 years, or CWO3 with 20 years or 0-4 with 10 years. Really it’s a question of how does the high three really work. Thanks!

  5. Joe Booth says

    So I’m in a similar situation, I have 26 years of service. I was enlisted (E7) for 14 years then went to flight school (W01-CW2) for 5 years then went to OCS in 2011 currently an O3E. I’m currently on Sanctuary orders and should be retiring 1 Feb 2020; however since I did NOT have 10 years commissioned service I’ll be retiring as an E7. with that being said I was told I’d be paid the high 3 so I should be receiving high 3 O3E upon retirement. Here’s the dilemma, If I was an Active duty officer my commissioned warrant officer time would count toward my 10 years commissioned service but because I’m a “reserve” officer it doesn’t. I can’t get a straight answer from anyone. I have to effectively resign my commission on 28 January 2020 and “enlist for retirement purposes only” on the 29-31st and will retire as an E7. Thoughts??

    • Doug Nordman @ The-Military-Guide says

      Joe, my first thought is that you should talk with a JAG.

      You’re in a unique situation– I’ve never seen a servicemember commission to O3E through CW2 *and* pick up sanctuary. You’re essentially being involuntarily retired and you were commissioned from a source (the Reserves) which did not require 10 years of commissioned service. You could force the decision by formally requesting retirement at the rank of O-3 under the provision of Title 10 U.S. Code section 1370(a)(3).

      One of the reasons you’re being told to retire at an enlisted rank is due to Title 10 U.S. Code section 7344. HRC will suggest that you’ll reach a total of 30 years (active service plus retired years) in less than four years of retirement. At that 30-year point you’re entitled to be advanced to the highest grade you served on active duty.
      However that situation normally applies to voluntary retirements (less than 30 years of service) and you’re being involuntarily retired due to the sanctuary law.

  6. Vick says

    Hi, Ryan,

    In the Navy we are seeing early separations offered to the enlisted Sailors, but nothing about the 8 year retirement for officers with previous enlisted service. Any hopes on when that may return since it was discontinued on 30 Sep2018?

    • Ryan Guina says

      Hello Vick, Thank you for reaching out. I haven’t heard anything about this returning. These things come and go based on manpower needs. So if the DoD determines they have too many people, they may bring it back. Sorry I don’t have a better answer!

  7. Rich says


    Can you go into the IRR at your officer rank until the 10 year mark? This question is more for the Reserve/ Guard folks.

    I have 11 active duty years enlisted , 2 years reserve enlisted and was planning to do my remain 7 years as a reserve officer until I hit 20. This will put me 1-3 years short of the “8-10 year rule.”

    I’ll do the IRR for the additional years (to get 10 years) in order to guarantee O-3E pay at age 60.

    Love any feedback 🙂

    • Ryan Guina says

      Hello Rich,

      From what I understand, the Guard does not require you to do 10 years of service as an officer to retire as an officer. You just need to be commissioned and reach 20 years of service. I don’t have the specific reg that covers this, but I have read it. I recommend speaking with your human resources or personnel office to clarify this.

      I’m not sure if the Reserves are the same. My personal experience is with the Guard. We looked this up because one of the members in my unit is in a similar situation – he commissioned with almost 14 years of service and he wanted to know if he needed to serve an additional 10 years to qualify to retire as an officer. The answer was no, he only needed to reach 20 years of service, at which point he could retire and still retain his commissioned rank when he reached age 60.

      When you retire, it would be better to Retire Awaiting Pay, and not Resign. That may be one of the conditions for retaining the commissioned rank (though I am not 100% certain).

      Again, your HR or personnel office is the best place to verify this. Be sure to ask for the specific reg so you can read it for yourself.

      I wish you the best, and thank you for your service!

  8. Lamont says

    I fell victim to this. It is a tragic triple whammy.

    First) I went to OCS right after being notified I would be frocked to E6 with 14 years in. I was frocked to E6 at OCS, but I got Ensign bars one week later. Because I was the 2nd increment of pay, I never saw E6 as a pay-grade. I didn’t care. The move from E5 to O1E pretty much doubled my pay.

    2) Seven years later, I was a Navy LT who had never augmented. I was downsized out. No big deal. I had 21 years of service!! No one explained the ramifications of losing my commission, so I didn’t complain. I had been an O3E for three years and was OK with what I thought I would receive for military pay.

    3) Not until after I was retired and got my first pay check did I realize I was being *******. After months of calling the retirement desk and writing letters did I get a response. Yep, according to Title 10, Chapter 71, sec 1407, (4)(E), I could only get paid at my last enlisted pay grade. And they chose E5 instead of E6 because I was never paid for it.

    Had I not accepted a commission, I probably would have made E7 or E8. At least I would have been an E6 for seven years for sure. And that would mean I would have gotten that pay in retirement. As an enlisted member, I might not have even been pushed out at my 21 year point. So minimally, I could have done the same number of years and be earning more if I never ever got promoted more than I already had!!

    4) DFAS sent me a letter saying that I was being paid correctly. However once my time in service + time in retirement = 30 years, “you may be eligible for advancement.” Well, MIGHT brought about the 4th whammy. Nine years after my retirement date, I requested my pay and rank status be upgraded. Somebody at DFAS decided that the rule that later changed the clause to say the amount of time could be dropped to 8 years meant I the military wanted officer retirees to serve at least eight years. And since I only served 7 years and 101 days as an officer, I am not eligible for advancement back up to O3E. Hence I am forever an E5 to the military even though I was being considered for O4 at one point in my career.

  9. David G says

    I too am one of these who just came down on the chopping block due to MILPER 15-176 released yesterday. I have 14 yrs and 7 months TIS. I only have 6 years as an officer so if I get selected to be cut, I go back to E-5. I busted my *** to get to OCS and graduate at the top of my class in 2009, go on to become the best Executive Officer in the battalion, and now, this BS comes along. Maybe I’m being pessimistic and they retain me when the list comes out later this year on who gets the axe.

  10. H says

    Hello Ryan,

    Thank you for this great post.

    I was wondering if you could help clarify something, regarding military retirement, that I am having difficulty wrapping my head around.

    I guess the best way to explain this is through my own service/experience…but, I’m sure there might be quite a few others, who may read this post/comment, who may be in a similar situation.

    I enlisted, in the U.S. Army, shortly after 9/11….in December 2001.

    In 2009, I accepted a commission.

    I currently hold the rank/grade of 1LT/O-2. (Pending release of CPT promotion board results…)

    Because it is now April 2015, I have around 13, pushing 14 total years in service.

    ….I know that Army Directive 2014-17 (Authority to Reduce Minimum Commissioned Service for Voluntary Retirement as an Officer), effectively dropped the requirement for officer retirement to 8 years (from 10 years), at least until that directive expires on 30 SEPT 2018 (or, “unless earlier rescinded”)

    ….I would, personally, hit 8 years officer service in SEPT 2017–effectively landing me before that expiration date.

    I am trying to wrap my head around how that relates to 20 years service though.

    For example, what if an officer were to have serviced as an enlisted Soldier, commissioned, hit 8 years commissioned service, resigned their commission (before 20 years), but then re-enlisted to make up the difference?

    In my situation, I would hit 8 years commissioned service BEFORE I hit 20 years total service to retire with a pension. (I would hit 8 years commissioned service roughly around 15-16 years total service, requiring me to have 4-5 additional years, to hit 20 years)

    Would you how that would work?

    Even if one resigned their commission (after 8 years), served out the remainder of their 20 years as an enlisted Soldier, would they still qualify for an officer retirement/pension?….or must one achieve 8 years commissioned officer while simultaneously hitting 20 years total service, ending as an officer?

    I hope that made sense….

    I appreciate your time and consideration here.

    • Nice Try FBI says

      To revive an old article,

      if you joined prior to 19800908, then retirement pay is based upon the final rank you held in the service;

      if you joined on or after 19800908, then retirement pay is calculated based upon the average of your highest 36 months of base pay.

      • Fellow Lt says

        Ryan, I agree with this statement. I recommend updating your article with regards to the High-3 rules so as not to mislead people.

  11. Karina says

    This is so sad. My husband is one of those that serve 16 years and is short 4 months to retire as an officer. They are forcing him to retire as an E5 as is the almost 8 years he has served as an officer had never existed. As you mention if he would ‘ve stayed enlisted he would have been promoted couple time in almost 8 years. We have done everything in our power to try to get an extension to finish the four months and retire as captain, but have had no luck. He is already looking for employment in the civilian world and have not find anything yet. I just hope he gets something soon because we have three kids and is going to be tough with amount he’ll get as an E5. I know we’ll make it somehow , but is hard to see that all the sacrifices he made as a soldier and our family have made are not recognized at all and he is just kicked to the curve . To soldiers, honor and dignity are key factors in life and is painfull to see how he is been hurt by the same institution that he loves and have been loyal to. I understand they are restructuring but they should at least let him retire with the honor and dignity he deserves.

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