That's the basic gist, if they don't have anything to do, they retire and go into civilian consulting work. Having them "active" helps slow down the retirement rate quite a bit. Can make it a rough start if you are slow to expand positional needs. It costs very little to create an extensive naval hierarchy to keep folks "busy". It also promotes the use of the command modules which shifts the ranks of your ship captains up, and gives multiple places for low tiers to land. I typically have Engineering, Tactical, and CIC on all combat ships. Yes it eats space, but it also gives more opportunity for officers to keep busy, thus maximizing upward promotion options to make each fleet as effective as possible.
One will see quite a few retirements in the early game, as there are more officers, admins, and scientists than there are available positions to keep them busy, it will flesh out/even out in the long run though.
