reduction in retired pay

reduction in retired pay Sec. 205. (a) The first sentence of subsection (a) of section 1462 of title 10, United States Code, is amended by striking out “shall be reduced each month” and all that follows in such sentence and inserting in lieu thereof “shall be reduced each month— “(1) by an amount equal to 2½ percent of the first $300 of the base amount plus 10 percent of the remainder of the base amount, if the person is providing an annuity by virtue of eligibility under section 1448 (a)(1)(A) of this title; or “(2) by an amount prescribed under regulations of the Secretary of Defense, if the person is providing an annuity by virtue of eligibility under section 1448 (a)(1)(B).”. (b) Subsection (c) of such section is amended to read as follows: “(c) The retired or retainer pay of a person who has elected to provide an annuity to a person designated by him under section 1450(a)(4) of this title shall be reduced— “(1) in the case of a person providing the annuity by virtue of eligibility under section 1448(a)(1)(A) of this title, by 10 percent plus 5 percent for each full five years the individual designated is younger than that person; or “(2) in the case of a person providing the annuity by virtue of eligibility under section 1448(a)(1)(13) of this title, by an amount prescribed under regulations of the Secretary of Defense. However, the total reduction under clause (1) may not exceed 40 percent. The reduction in retired or retainer pay prescribed by this section shall continue during the lifetime of the person designated I under section 1450(a)(4) of this title or until the person receiving retired or retainer pay changes his election under section 1450(f) of this title.”.