Our military promotes through O-8 (major general, rear admiral (upper half)). All higher ranks are appointive: the president appoints and the Senate confirms. No one is "broken" from O-10 to O-9 because O-9 also requires Senate confirmation. This guy has obviously been reassigned to an O-9 billet and will have to be confirmed in it. Only the Senate can allow someone to retire as an O-9, O-10, or (in war), O-11.
Boston Globe, you still suck.
Your statement would be correct if GEN Ward were interested in remaining on active duty. He is not. His intention was to retire at the end of his appointment at Cdr, AFRICOM and he submitted his request for retirement before leaving that billet. He expected to be retired in grade as a four star. The investigation delayed his retirement and he was put on ice pending resolution. In olden days, an adverse finding on an investigation of this sort would result in his retirement in his permanent grade, Major General. However, now the law says that you must retire in the last grade satisfactorily held. Since the charges did not include any offense committed when he was a Lieutenant General, that's the default position.
The recommendation has been sitting on Panetta's desk for several months. Since Ward is Black, Dempsey was paraded out to recommend clemency and retirement as a four star while Panetta let the packet sit on his desk until after the election. This was always going to be the outcome, but it couldn't happen until after the election.