Military Retirement Reform Act of 1986

(Conference report filed in House, H. Rept. 99-659)

Military Retirement Reform Act of 1986 - Title I: Retirement Program Amendments - Amends Federal law relating to the computation of retired pay for members of the armed forces to provide for the retired pay multiplier for regular-service nondisability retirement (a percentage multiplied by the number of years of service). Reduces such percentage for members with less than 30 years of service.

Requires the Secretary of Defense, effective on December 1 of each year, to increase, in accordance with a formula reflecting changes in the consumer price index (CPI) for that year, the retired pay of those who first become members: (1) before August 1, 1986; or (2) on or after August 1, 1986. Outlines rules concerning the initial adjustment in retirement pay both with and without an intervening increase in the rate of basic pay, as they relate to the CPI.

Increases the retired pay for members entering the service on or after August 1, 1986, upon reaching age 62.

Requires the use of the retired pay base in computing the retired pay of members who first became members before September 8, 1980. Defines the retired pay base for members who: (1) retire due to physical disability; (2) meet certain age and years-of-service requirements; (3) retire as warrant officers; or (4) are regular commissioned officers attaining age 62. Defines the retired pay base for: (1) voluntary retirement from the Army, Navy, Marine Corps, Air Force, and Coast Guard; and (2) commissioned officers of the National Oceanic and Atmospheric Administration (NOAA) and of the Public Health Service. Outlines special retired pay for former chiefs of the service branches and their senior enlisted members.

Defines the retired pay base of members who first become members after September 7, 1980. Outlines special rules in the computation of such pay for members: (1) retiring with less than 30 years of service; (2) retiring due to short-term disability; and (3) retiring with non-regular service (reserve duty).

Outlines certain rules of construction for purposes of the computation of retired pay.

Title II: Conforming Amendments to Computation of Retired Pay - Revises other Federal provisions concerning the computation of retired pay to conform with retired pay base changes made under this Act. Directs that a person be paid under the retired pay formula most favorable to such person. Provides a formula to determine the retired pay of a person whose pay must be recomputed due to post-retirement active duty.

Sets forth formulas for the computation of the initial monthly retirement pay for members of each department of the armed forces and the Coast Guard. Provides general rules for the computation of retired pay for each such department, including: (1) use of the most favorable formula for each retired member; and (2) rounding out monthly retirement pay to the next lowest dollar. Allows an additional ten percent of such computed retired pay for members of the Army and the Air Force who have been credited with extraordinary heroism by the Secretary of their department. Provides for the recomputation of retired pay for enlisted members and warrant officers of the Army, Navy, Marine Corps, and Air Force who are advanced on the retired list due to post-retirement temporary appointments or reserve duty. Provides a retired pay computation for members of the Coast Guard.

Prohibits the retired pay of a member from exceeding 75 percent of: (1) the sums of active duty pay and all permanent additions to such pay; or (2) the retired pay base determined under this Act.

Amends the Coast and Geodetic Survey Commissioned Officers Act of 1948 to provide for the computation of retired pay for a commissioned officer on the retired list of NOAA who first became a member either before or after September 8, 1980. Prohibits the retired pay so computed for such officers from exceeding 75 percent of the retired pay base.

Amends the Public Health Service Act to provide for the computation of retired pay for the mandatory or voluntary retirement of commissioned officers of the Public Health Service who first became members either before or after September 8, 1980.

Title III: Miscellaneous Retirement Provisions - Uses the unreduced retired pay in effect before the enactment of this Act in determining any Survivor Benefit Plan annuity to be paid to the surviving spouses of deceased members of the armed forces.

Requires the Secretary of Defense, no later than February 1, 1988, to report to the Congress on the retirement system for members performing non-regular service.

Recomputes the retired pay to reflect later active-duty service of members who first became members before September 8, 1980.

Outlines provisions which provide for the entitlement to retainer pay for enlisted members who transfer to the Fleet Reserve or the Fleet Marine Corps Reserve after the completion or near-completion of a full term of active duty. Repeals Federal law which prohibits the payment of such retired or retainer pay from out of the Department of Defense Military Retirement Fund.

Terminates the six-month rounding rule, which gives credit for a full six months of service (for purposes of the determination of retired pay) even though a part of such period is not actually served. Provides as an exception to the termination of such rule those members applying for retirement or transfer before January 1, 1982, who take certain specified action. Repeals Federal law prohibiting payments to such members, out of the Department of Defense Military Retirement Fund, who applied for retirement or fleet transfer before such date.

Repeals Federal law which limits during FY 1986 the amounts available to be obligated for basic pay and payments into the Department of Defense Military Retirement Fund.

Title IV: Fiscal Year 1986 Unauthorized Appropriations - Prohibits the obligation of unauthorized FY 1986 defense appropriations for any purposes other than those specified in this title. Defines "fiscal year 1986 defense appropriations" and "fiscal year 1986 defense authorizations." Specifies certain programs, projects, and activities within the Department of Defense (DOD) for which specified funds are authorized to be obligated during FY 1986, and for which amounts were provided in FY 1986 defense appropriations. Requires the Secretary of Defense, before any amounts are obligated or expended for each such project, to submit a report to the appropriate congressional committees setting forth the manner in which funds are to be obligated for each project.

Authorizes the Secretary of the Navy to carry out a specified military construction project at the Naval Station, Staten Island, New York, funds for such project having been appropriated in a previous Act. Increases the appropriation authorization totals of the Department of the Navy and of military construction projects by the amount required for the authorized construction, above.

Title V: Miscellaneous Provisions - Establishes the position of Under Secretary of Defense for Acquisition, appointed from civilian life by the President, by and with the advice and consent of the Senate. Redesignates the position of Under Secretary of Defense for Research and Engineering as the Director of Defense Research and Engineering.

Limits the expenditure of funds for the procurement of T-46 trainer aircraft.

Prohibits the Secretary of Defense from awarding a contract with respect to a specified defense contract (for the purchase of crawler tractors) until the Congress by law establishes a policy regarding the awarding of defense contracts to firms in which a foreign government has a significant interest. Provides an exception to such prohibition if such policy has not been established by the end of the 99th Congress.