WASHINGTON - The Bush administration is mulling a dramatic military pay and pension overhaul aimed at putting more cash in the pockets of current and future troops while delaying their receipt of retirement payments.

The change, advocated by a panel of retired senior officers, former civilian defense officials and economists, would be the largest modification in decades to a complex system of cash payments, health and pension benefits and tax breaks used to compensate service members. It could aggravate tensions between the Republican president and one of his party's most supportive constituencies, the nation's 1 million-plus military retirees.

Bush and those veterans already are at odds over the administration's ongoing effort to double or triple health insurance premiums for military retirees. The new initiative could expand their disagreement to include military pensions; it would deny future troops any retirement payments until they reach age 60.

Retired Adm. Donald Pilling, who headed a yearlong study of military pay by the Pentagon's Advisory Committee on Military Compensation, said the panel's proposal would eliminate a long-standing gap in compensation between married and single troops and offer both groups incentives to extend their careers beyond the 20-year mark, the traditional threshold for military retirement.

The goal is a pay structure that gives higher rewards to top performers and creates a more experienced, seasoned force, Pilling said.

The group's final report is to be submitted to Defense Secretary Donald Rumsfeld next month and will be part of another military pay study overseen by his office and due later this year.

If Rumsfeld embraces the proposals, most also will require Congressional approval, probably delaying implementation until late next year at the earliest.

Pilling, whose 35-year Navy career ended in 2000, said the military's present pay plan shortchanges unmarried troops and encourages people to retire before they're 50, when many, particularly in highly technical or white-collar jobs, are doing their best work.

Among his group's proposals:

Service members would qualify for pension benefits after just 10 years in uniform. Retirement pay would grow from 25 percent of the member's final active-duty salary for those who retire after 10 years to 50 percent of the base for those who stay 20 years and 100 percent for those who retire at 40 years.

The military's present system, essentially in place since the end of World War II, limits pension eligibility to those with 20 years or more in uniform. The benefit starts at 50 percent of active-duty pay and grows to 75 percent when the member hits the 30-year mark

Whenever they retire, members would not begin drawing pension checks until they reach age 60. Those payments now start immediately upon retirement, dramatically boosting the incomes of those who leave the military in their 40s or 50 s to take civilian jobs.

Unmarried troops living in civilian housing would get an average 25 percent increase in their monthly Basic Allowance for Housing, making their allowance equal to that paid to married troops. The allowance varies by rank, but at current rates, most unmarried sailors living in Hampton Roads would get tax-exempt increases of more than $200 per month.

Pilling said the current scheme is a sore point among unmarried troops, "almost to a man," and essentially rewards service members for having children.

"The kind of pay-for-performance we want is not that performance," he said.

Government funds would match individual contributions to the Pentagon's Thrift Savings Plan, a tax-deferred retirement savings and investment plan similar to the 401(k) programs of many civilian employers.

Military pay would be based on recipient s' time at their present rank, not overall time in uniform. High achievers who receive early promotions now get only a temporary advantage over their peers, whose pay catches up when they advance, Pilling said.

Today's collection of 64 "special and incentive pays," designed to help the services retain hard-to-replace troops, would be simplified. Each branch could establish "gate pays," bonuses that would be offered to high achievers at various career points to encourage them to stay in uniform.

The current special pay setup is such a patchwork that, for many recipients, "it's hard to figure out what you should get," Pilling said.

Pilling called the proposals a radical shift from the military's current pay and benefit structure and emphasized that they would not apply to anyone now in uniform, unless they choose to opt in.

Still, he predicted that the plan will draw fire from veterans groups already upset with Bush's plan to increase retiree health insurance premiums.

So far, the veterans appear wary.

"There's not a whole lot that is new" in the recommendations, said Steve Strobridge, legislative director for the Military Officers Association of America, arguably the most aggressive of several groups lobbying for uniformed retirees.

Most of the proposals by Pilling's group have surfaced in past studies of military pay, only to be shelved when Congress concluded they would create more problems than they solved, he said.

"We certainly raise an eyebrow at these recommendations," Strobridge sai d. "We're going to give it a thorough review."

Strobridge said the advisory group's plan could be especially problematic in wartime, when troops grow weary of repeated duty tours in combat zones.

Retirement eligibility after 10 years could encourage thousands of those service members to leave when they're needed the most, he said, while the current system gives them an incentive to stay until the 20-year mark.

Strobridge also questioned the panel's plan for "gate pays."

"It's like the government is bidding against itself," with retirement eligibility after 10 years giving midcareer troops an incentive to quit while the service offers a gate pay bonus at the 15-year mark to induce them to stay, he said.

Defense officials acknowledge that the overall cost of the group's proposals also is unclear. With more than 200,000 single service members living in civilian housing, the housing allowance increase alone could cost $1 billion annually, according to one estimate.

The tab would grow depending on how many people take advantage of the earlier retirement eligibility or sign up for the Thrift Savings Plan. The military has lagged behind other government agencies in participation in the plan, with fewer than one-third enrolling in every branch other than the Navy.

Pilling said economists on the advisory panel believe cost increases from the new retirement benefits and higher housing allowances would be largely offset by delaying pension payouts until recipients reach age 60.

Part of the Pentagon's spiraling pension costs also will be offset if Congress agrees to increase the premiums retirees younger than 65 pay for health insurance under the military's Tricare program, a proposal endorsed by the advisory group.

A coalition of retiree groups is lobbying fiercely against that increase, which was part of Bush's 2007 budget proposal.

The plan would double or triple the Tricare premiums of most military retirees, but it attracted powerful bipartisan opposition last week when the chairman and senior Democrat on the House Armed Services Committee issued a joint statement denouncing it.