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Old 12-12-2013, 08:59 PM   #21
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As a 20 yr man myself, sometime in the next 5 yrs or so I expect (more or less depending on who gets control) the "Thank you for your service" stuff to change into "You are 'The HAVES" and we as a nation simply can no longer afford such gold plated opulent pay/pensions/medical care.... you will have to sacrifice like the rest of"

Yes. I have that much faith in this country
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Old 12-14-2013, 11:04 AM   #22
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Originally Posted by haloFIRE View Post
I'm shocked that the Military retirement system could be altered so quickly.

COLA minus one percent for 20+ years in some cases is a significant erosion.

Why should you be shocked? That same change was foisted on Federal employees thirty years ago in 1984 ---- to include Law Enforcement and Firefighters who usually retire a bit earlier than most with 20 to 30 years service.
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Old 12-14-2013, 11:26 AM   #23
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That same change was foisted on Federal employees thirty years ago in 1984 ---- to include Law Enforcement and Firefighters who usually retire a bit earlier than most with 20 to 30 years service.
I don't think so. The changes in the Federal system were done on a "from now on, current employees will..." basis. The present Murray-Ryan deal has the same thing--current federal employees get reductions in their retirement credits from this point forward. The cuts to military retirement that are in the soon-to-pass deal cut the already-earned retirement pay of servicemembers who are already retired. That's a different deal entirely. This retirement pay is simply deferred compensation that was part of their total compensation package when they were out there performing the tasks that the nation asked. Now, after they met their end of the bargain, this pay is going to be reduced. It's a failure to pay for services that were already performed. For those retiring today at 42 YO, it will result in an approx 18% smaller monthly retirement check when they are 61 YO. The promise now is to restore the cut money when they turn 62, but I can't see why anyone should expect that promise to be kept. 62 will become 65, 65 will become 67 (the individual's "full retirement age" for SS), etc.

Very little talk about this cut in the press, and the House sure pushed it through amazingly fast after. A final vote is expected in the Senate next week. There's some signs of pushback on this particular provision on both sides of the political spectrum, but it would take more pressure to cause any real modifications before a vote. If it isn't changed/stripped out before a vote, it never will be.
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Old 12-14-2013, 11:48 AM   #24
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I don't think so. The changes in the Federal system were done on a "from now on, current employees will..." basis. The present Murray-Ryan deal has the same thing--current federal employees get reductions in their retirement credits from this point forward. The cuts to military retirement that are in the soon-to-pass deal cut the already-earned retirement pay of servicemembers who are already retired. That's a different deal entirely. This retirement pay is simply deferred compensation that was part of their total compensation package when they were out there performing the tasks that the nation asked. Now, after they met their end of the bargain, this pay is going to be reduced. It's a failure to pay for services that were already performed. For those retiring today at 42 YO, it will result in an approx 18% smaller monthly retirement check when they are 61 YO. The promise now is to restore the cut money when they turn 62, but I can't see why anyone should expect that promise to be kept. 62 will become 65, 65 will become 67 (the individual's "full retirement age" for SS), etc.

Very little talk about this cut in the press, and the House sure pushed it through amazingly fast after. A final vote is expected in the Senate next week. There's some signs of pushback on this particular provision on both sides of the political spectrum, but it would take more pressure to cause any real modifications before a vote. If it isn't changed/stripped out before a vote, it never will be.
It's not right to make the change retroactive. That's not to say no changes are in order at all, either.

In any case --- it's not likely to go through in the end. Further, I'd venture to guess any changes in military retirement benefits are not likely to go through at any time in the foreseeable future. They seem to be politically sacrosanct when push comes to shove.
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Old 12-14-2013, 11:56 AM   #25
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In any case --- it's not likely to go through in the end. Further, I'd venture to guess any changes in military retirement benefits are not likely to go through at any time in the foreseeable future. They seem to be politically sacrosanct when push comes to shove.
I think you are incorrect on this, we'll see. There has been little resistance to cutting the pay already earned by military retirees. The vote in the Senate is next week (it already passed the House), after that it is a done deal--the President will sign it.
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Old 12-14-2013, 02:25 PM   #26
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I've read a dozen articles about the pension cuts, and I am surprised that this went through the house so quickly. The way this is being described, it is a 1% cut in the yearly cost of living adjustment. Am I wrong in thinking this does not cut the base pension, but definitely slows the growth of the pension until the retiree is 62?

Do I also understand correctly that the pension and growth each year is not touched for those who are disabled?

I've heard this discussed at work, and there is a lot of confusion.
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Old 12-14-2013, 02:52 PM   #27
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I've read a dozen articles about the pension cuts, and I am surprised that this went through the house so quickly. The way this is being described, it is a 1% cut in the yearly cost of living adjustment. Am I wrong in thinking this does not cut the base pension, but definitely slows the growth of the pension until the retiree is 62?

Do I also understand correctly that the pension and growth each year is not touched for those who are disabled?
All you've written is right. In 2016 the COLA is CPI -1/4%, in 2017 the COLA is CPI -1/2%, and starting in 2018 and evermore it is 1% less than the CPI. For the typical military retiree this will result in approx 18% loss in real pension spending power at age 61. There is supposed to be a one-time catchup at age 62, at which full CPI COLAs resume, but that seems like something that is likely to be eroded in the future if this initial deal goes through--and it definitely will unless the Senate rejects it (now it looks like they'll pass it, unless senators get some education on what they are doing/what this means).

From a Tom Philpott column:

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The cumulative effect would be to cut the lifetime value of military retirement by roughly $83,000 for a typical enlisted member who retires at age 40 after 20 years' service. The typical officer retiring at age 42 after 20 would lose about $124,000.

. . .
The Ryan-Murray deal, said Hayden, reneges on assurances by Congress in setting up the Military Compensation and Retirement Modernization Commission last year, as well as promises from President Obama and his defense secretaries, that any substantive changes to retirement would be "grandfathered," impacting only future generations of members. Current retirees or serving members were to be protected.
The budget deal, said Hayden, "basically shoots the grandfather."
"I have to think anyone who signed on to this doesn't understand the full effect it will have on purchasing power of promised retired pay," Hayden said. The message being sent to the current force and younger retirees is, he said, "they just changed the rules on the benefit you signed up for."
To do so without the armed services committee holding a single hearing, and without any analysis conducted on the impact on force readiness, said Hayden, is "absolutely insane."
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Old 12-14-2013, 02:57 PM   #28
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I'd appreciate it if anyone has a link to the text of the actual legislation, not just an article on a media website. I'm working up a post on the topic, and I have plenty of links from the usual military media sites.

I'm curious whether such a retroactive change is even legal, let alone de facto. Does MOAA file suit in federal court first?

I suspect that the bill will be passed with the 1% COLA reduction intact. Then Congress (and the military advocacy groups) will spend the election year fixing the problem. But those of you who are old enough to remember REDUX may also recall that it took over a decade for DoD & Congress to understand the consequences of their actions.
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Old 12-14-2013, 03:02 PM   #29
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Nords,
Great to see you!
The deal that passed out of the House was " H.J.RES. 59 ". I'm looking for the text of it now, will append it to this post if/when I find it.

Added: Here's a page that is supposed to contain a link to the final version.
http://thomas.loc.gov/cgi-bin/query/.../~c113Us3kOl::

About the legality of it: I haven't heard anybody provide a reason why it would be illegal/unconstitutional.

Subsequent edit: I think this is a much better link to the proposed deal. See Sec 403 (pg 53 of 77 in the .pdf)
http://walter.thehill.com/sites/defa...endment1_0.pdf
Also, this version doesn't show any CPI -1/4 % or CPI -1/2% phase-in, just a CPI -1% adjustment every year starting Dec 31, 2015.
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Old 12-14-2013, 03:17 PM   #30
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About the legality of it: I haven't heard anybody provide a reason why it would be illegal/unconstitutional.
Sure it's legal. Not much different from previous retroactive maneuvers.

First pass: "You'll have free health care for life."

20 years later: "Oh, well, we weren't technically authorized to say that, so never mind."
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Old 12-14-2013, 03:27 PM   #31
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Sure it's legal. Not much different from previous retroactive maneuvers.

First pass: "You'll have free health care for life."

20 years later: "Oh, well, we weren't technically authorized to say that, so never mind."
And even if they were "technically authorized to say that," they could still chop already earned benefits on their whim.
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Old 12-14-2013, 03:49 PM   #32
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Here is a link to a 4 page summary of the Bipartisan Budget Act of 2013. The summary is dated Dec. 10, 2013 and the link is from the budget.house.gov site.
The changes to military retirement are on page 3 of the summary.


http://budget.house.gov/uploadedfile...013summary.pdf
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Old 12-14-2013, 03:50 PM   #33
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I added to my previous post. To repeat:
I think this is a much better link to the proposed deal. See Sec 403 (pg 53 of 77 in the .pdf)
http://walter.thehill.com/sites/defa...endment1_0.pdf
Also, this version doesn't show any CPI -1/4 % or -1/2% phase-in, just a CPI -1% adjustment every year starting Dec 31, 2015.
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Old 12-14-2013, 04:06 PM   #34
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I added to my previous post. To repeat:
I think this is a much better link to the proposed deal. See Sec 403 (pg 53 of 77 in the .pdf)
http://walter.thehill.com/sites/defa...endment1_0.pdf
Also, this version doesn't show any -1/4 % or -1/2% phase-in, just a -1% adjustment every year starting Dec 31, 2015.
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Here is a link to a 4 page summary of the Bipartisan Budget Act of 2013. The summary is dated Dec. 10, 2013 and the link is from the budget.house.gov site.
The changes to military retirement are on page 3 of the summary.
http://budget.house.gov/uploadedfile...013summary.pdf
Excellent, thanks guys.

The best advice I have for these situations is that if a single point of failure (like this one) can derail a retirement plan, then the plan didn't have enough safety margin to begin with.

OTOH my retiree COLAs have accumulated to 32.1% between 2002-2014, and now I have to do some spreadsheet math to come up with impact that this legislation would have had over that same time. (Instead of looking up COLAs between 2002-2014 I'm just going to go with my own 1099-Rs.) This finagling with CPI is one more reason that we should all hope for an economy that can sustain a low-inflation policy.
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Old 12-14-2013, 04:08 PM   #35
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Well, I'll be 62 in 2015, so I'll only be affected a year. Just thankful for the compounded full COLA's I've gotten over the last 19 years.

I am a little surprised at this 1% thing. All along, I've been expecting the Chained CPI, which historically is about a 0.3% cut from the current formula. My sense is that Paul Ryan pulled this 1% idea from some of the states that are doing it in pension reform.
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Old 12-14-2013, 04:41 PM   #36
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Trying to understand if this is a retroactive cut.
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Old 12-14-2013, 04:52 PM   #37
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Trying to understand if this is a retroactive cut.
God I hope not. That would mean all present retirees owe the government a boat load of money.
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Old 12-14-2013, 04:58 PM   #38
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Why should you be shocked? That same change was foisted on Federal employees thirty years ago in 1984 ---- to include Law Enforcement and Firefighters who usually retire a bit earlier than most with 20 to 30 years service.
If I recall, that change came through legislation. Not as part of a fiscal budget.
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Old 12-14-2013, 06:22 PM   #39
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Trying to understand if this is a retroactive cut.
If "retroactive" means "reducing benefits that were already earned through military service" then it is certainly retroactive.

A non-retroactive cut would be "Present servicemembers, you will keep all the retirement pay you have earned to this point in your career. That monthly amount will always be increased by the full CPI every year, just like we've always promised. But from this point forward, any monthly retirement amount your accrue on top of that will not receive the full CPI COLA every year, that amount will receive a COLA of CPI -1% every year. There will be a catchup when you are 62, your checks will be restored to the amount they would have been if we hadn't made this change. Present retirees: Of course you will be unaffected--a deal is a deal and you met your half of the bargain. Thank you."

Doing it the second way avoids breaking the promise: Servicemembers can decide whether they want to keep working toward retirement, or take a different path. Doing it that way would assure nothing was being retroactively taken from those who already fulfilled their end of the bargain that explicitly existed throughout every day of their career.
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Old 12-14-2013, 06:27 PM   #40
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This cut is tough for service members in or nearing retirement. More so because there was no pension underfunding, as has been the case for recent public sector pension changes. It will be interesting to see what other members think, especially those in the armed forces.

The discussion will be all the richer if we can keep it focused on pension and retirement and away from politics and other unrelated topics.
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