Believe it or not, this presentation isn't even the final version. That's supposed to come out sometime this month, although I'm sure it'll be modified by the extensive "public commentary" it's receiving.
Here's a few more comments from the blog post:
Military retirement: the latest overhaul | Military Retirement & Financial Independence
Page 5: “Military retirement funds are not able to be invested in higher yielding equities and bonds.”
If they were invested in other assets, how far would the higher returns go to resolve the perceived shortfall? We don’t have to privatize the funds,
but I’ve heard that Treasury yields have recently shot up...
Page 6: “DoD pays retirees 40 years of retirement benefits for 20 years of service.”
My calculations show that DoD expects to pay pensions until we’re at least 77 years old. How’s that compare to the life expectancy of the military retiree/veteran demographic? To be excruciatingly and actuarially thorough this study should include wounded veterans, servicemembers who are medically retired shortly before they die (usually of severe wounds), and servicemembers killed before reaching retirement eligibility. Do you civilian retirees have full-page mesothelioma ads in the back of your alumni magazine?
Page 7: “It will be very difficult to release personnel with 15 or more years of service, yet these age groups are a likely target for downsizing.”
Uhm, guys, did you note all the TERA applications from 1996-97? How’d that program work out for DoD? Could we see a study of the costs & savings?
Page 7: “The current system does not compensate for those in high-risk situations or extenuating circumstances (e.g., combat duty)…”
I’m not sure a higher retirement benefit would motivate me to volunteer for an extra combat tour, and I’d sure hate to serve combat duty alongside someone who’s motivated by that. Is this really a retirement problem, or is it adequately compensated by combat pay?
Page 8: “There is no difference in retirement benefits between those who have served in high risk and low risk positions.”
What risk category would this plan have assigned to those on shore duty in the Pentagon on 11 September 2001? Is it “low risk” only if nothing bad happens?
My spouse, who was excluded by Congress from combat zones for the first 10 years of her career, has a few pithy personal opinions on this “low risk” issue. Her retirement benefits were also reduced quite a bit by being shut out from her community’s male promotion opportunities. Let’s just say that her highly public visibility in uniform made her much more of a target than my years of “run silent, run deep” submarine sea duty. Yet who got all the sea pay & sub pay? How does the DBB plan offer equal opportunity to women who are
still banned from certain military specialties? In an apparently related coincidence, my spouse was also one of the 7% who transitioned to the Reserves between their 15th and 20th years of service (page 11).
Page 13: “Establish a mandatory TSP program for all military service personnel.”
I think mandatory TSP enrollment should be enacted tomorrow. Why wait? Let's do it for workplace 401(k)s, too.
I’ll be fair. For those of us already in the service (or who’ve left it), on page 14 the DBB brief says:
* “No impact on existing retired population”,
* “Fully disabled veterans not affected by new plan”, and on page 22,
* “For those with less than 20 years– proportional benefit under “old plan” if they stay for 20+ years”.
In other words, if you’re under 10 years of service then you presumably don’t care about retirement benefits (page 7) and if you’re over 10 years then you’ll preserve a healthy proportion of the existing system.
I've been hesitant to comment on this thread, but the presentation really addressed all of my concerns as a civilian with a significant interest in military affairs. I hope proposals like these happen.
The statistic that really bothers me is that 83% of all military personal don't receive any type of retirement benefit. This to me is just horribly unfair.
Unfortunately it's not like we're throwing them all out. We're having the usual miserable time persuading them to stick around, although that number has dropped since 2004 when it was 85%.
It turns out that (big surprise) being a grunt is hard on the body (even without the gunshots & IEDs). Occupation makes a difference. The proportion of Air Force veterans who leave without retirement benefits is below 70%. The proportion of Marines who leave without retirement benefits is over 92%.
The reality is that servicemembers don't want to hang around for "cliff vesting". We veterans tell everyone not to join up for the retirement benefits, we mean it, and they believe it. Instead, for most the military is a McJob (admittedly with training on breaking things & killing people) that serves as a stepping stone for education and life skills to take to a bridge career.
I think of two soldiers, both entering the service after 9/11. The first is the young man who enlisted a year or two out of high school. He signed up in a patriotic spirit to be a rifleman, re-enlisted a couple of times overseas with a nice tax free re-enlistment bonus. He has had 5 tours overseas and been shot many times at and survived lots of near misses with IEDs. When his enlistment is up in 2013 or so there is decent chance that the Army won't need him and he may not even get a chance to reup. Sure the Army will mostly pay for his college education or trade school, but realistically he'll graduate in his mid 30s, with a distinguished service record but not much in the way of transferable skills in the civilian world.
It depends on the civilian employers. There's a huge infrastructure of headhunters and career networks and civil service (largely invisible to civilians) for veterans who have had more leadership responsibility in their teens & 20s than most civilians have achieved in their 40s. A veteran will put up with appalling working conditions and still think they're getting a good deal. Even submariners and Air Force veterans!
It's all too common for veterans to be disabled with PTSD or injuries or other trauma. It's all too easy to be a 10-year cluckup in the armed forces and leave with minimal skills. But the vast majority who learn & use their benefits can get job skills, perhaps a college degree (either in the service or afterward with the GI Bill), and all the perseverance & commitment that an employer could want. Even "just a Marine rifleman" possesses all the skills he'll need to be the sales guy from hell.
The second soldier is computer science major who was on a ROTC scholarship (this could have been me 30 years ago.).
Well, maybe except for the urinalysis...
Realistically the Army is right there is probably more demand for cyberwarriors than rifleman after 2013 and the shooting wars have really wound down. However, as a citizen I feel awful that infantryman is getting nothing to help for his retirement, and bit jealous of the IT officer.
This is the third or fourth time in my life that I've heard of the end of war. It was over after WWII. It ended after Korea. It was finished forever after Vietnam. Remember the 1989 "end of history" and the 1991 "peace dividend"?
We've always needed that IT officer, just as we needed the cryptographers and intel analysts and linguists and logistics experts and combat engineers and communications engineers and other highly-trained specialists. One of my neighbors is a highly-trained "special projects" guy who'll be in high demand until he wants to quit.
But unfortunately, no matter how powerful our cyberskills and remote sensors, I think we'll always need that infantry grunt who can clomp over to the target, take charge, and verify that it really is destroyed & dead. Robert Heinlein was writing about that in Starship Troopers over five decades ago, and we'll probably be reading about it in the warfare doctrine manuals for another couple of centuries.
While the grunt may leave the military without a pension, at least these days she's leaving with a real GI Bill benefits, a TSP account, and (coming in 2012) a Roth TSP. Compare that to what the Vietnam vets had, or a crippled 1980s educational program called "VEAP". Today's veterans still have every opportunity to join the Reserves or National Guard to try to retain a little of the military culture until they finish those 20 "good years" and become eligible for some sort of pension.
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