Originally Posted by Purron
Originally Posted by arebelspy
My reaction exactly. Especially after just reading his guest post about Military Retirement over at Early Retirement Extreme today.
Thanks. Jacob mentioned he gets that question on ERE from the eager teens looking to
Accelerate Their Lives
Be A Global Force For Good.
Not that I'm trying to get a hint across to my daughter or anything. But I'll encore that link on my blog again on Monday.
As for this proposal... I feel another blog post coming on. Anything with the words "Congress" and "retirement" in the title is practically guaranteed to triple the hits. Thanks to you guys, this month has been a record 4000+ hits (so far) and today was a new high-- 459 hits so far, 45% over the previous high.
Anyhow IMO this headline is the military equivalent of financial porn.
Imagine if Kiplinger's or SmartMoney or TMF came out with a civilian headline:
"OMG Congress to radically change 401(k) retirement laws!!!"
Everyone would drive website traffic up by 10x, buy all the magazines off the newstand, and give it top rotation on CNBC. Then the talking heads would start dragging senators & representatives onto the set to talk about how they're going to preserve our American standards.
But upon further reading you'd learn that what really happened was a press release on the steps of the Capitol by an Ameriprise lobbyist that a think tank proposed lowering 401(k) matches, letting fund companies charge higher fees, and raising the minimum age for distributions. You'd know immediately that nobody would be persuaded to vote for such a thing.
Same thing here, only in these military publications it's intended to
motivate servicemembers, families, and veterans to write their elected representatives. Just look at the comments on the articles:
DoD panel calls for radical retirement overhaul - Air Force News | News from Afghanistan & Iraq - Air Force Times
[BLOGGERS NOTE: A 2010 Defense Business Board slide show presentation states that “Paying the military and their families for 60 years to serve for only 20 years” is unsustainable. Many retirees may find the point of view that “only 20 years” of service shouldn’t earn benefits, troubling. The same slide presentation also refers to the military retirement system as a “sacred cow.” Seems to indicate the bias the board has toward military retirement.]
(as Bbbami posted)
No more 20-year rule? DOD panel calls for radical retirement overhaul - News - Stripes
DoD needs to cut a few hundred million from the budget, and they'd rather not cut fuel or ammunition. There's talk about scrapping (let alone postponing) the USS KENNEDY (CVN79), and I don't think its keel has even been laid yet. Aircraft programs are being cut way back, Army weapons systems development is grinding to a halt, and once again the Marine Corps is getting eyed by the other services like a sheep that stumbled into a wolf's banquet. Don't even get me started on submarine construction or force levels.
The way this budget-cutting is done is to have "independent authorities", preferably filled with blue-ribbon panels and experienced defense consultants, turn their staffs loose on various proposals. Some of them are "skunk works" from previous administrations, others are pet projects of the service heads (like the CNO's "DEEP BLUE" staff), and others are legit think tanks like RAND. They float the trial balloons, DoD passes them over to Congress, Congress shoots them down, or the President vetoes them. The cycle starts anew.
It's taken 15 years to raise Tricare premiums. The reality is that the think tanks, lobbyists, and DoD failed to make the case for raising Tricare premiums. It was actually done by the veteran's organizations in exchange for controlling the rate at which future increases could happen.
I've heard rumors of senior Army officers discouraging the troops from signing up for the TSP. The fear is that the TSP will eventually morph into a military version of the federal civil service's TSP, with contribution matches and everything else, so that Congress can do away with the traditional military retirement system. That rumor's been around for over nine years. Yet the military is just getting around to a Roth TSP next year, and matches are a distant
It took decades to pass the REDUX retirement system in 1986. It did not affect anyone in the service-- only new recruits. Only 13 years later retention had plunged so low (perhaps aided by the Internet gold rush) that the JCS actually stood up in front of Congress, put away their backstabbers, and sang in four-part harmony to restore the previous retirement system. Congress compromised with a combination of High Three (which is working) and the REDUX Career Status Bonus (which is being allowed to die through inflation erosion).
The last major change to the retirement system actually allowed senior enlisted and senior officers (E-9s, flag officers) to collect pension multiples up to 40 years instead of 30. Pensions at those stratospheric ranks used to top out at 75% of base pay and can now go to 100%. But at that level of leadership, it was never about the money.
The military's coming budget cuts and the personnel drawdown will be bad enough. However the retirement system will not change anytime soon, and when it does change (in years? decades?) it'll start with matching TSP contributions. I think it'll be decades before it ever messes with the 20-year system, and people will vote with their feet.