Military Retired benefits to be cut?

[mickeyd]

Received this from MOAA. Looks like the DC folks are looking to reduce retiree life-long benefits (promised long ago) once again in order to [-]punish us, insult military retired folks, balance the budget on the backs of the folks who have risked their lives [/-] help America prosper during the next 10 years.

Yesterday, the Administration put out its plan to cut the deficit by $3 trillion over the next 10 years, including specific proposals for $27 billion in cuts in the military retirement and health care package.

The Administration plan envisions:
• Establishing an annual enrollment fee for TRICARE For Life
• Another (unspecified) retail pharmacy copay hike
• Establishing a BRAC-style commission to recommend “modernizing” the military retirement system

Most upsetting, the stated intent of the proposals is to “align government programs with those in the private sector” and address the “measurable disparity between the fees most retired private sector workers pay….and what retired military personnel pay.”

 

[HawkeyeNFO]

Keep in mind your source. MOAA is a good organization, doing lots of good things, but they also like to get members all riled up.

 

[Nords]

As much as I like VADM Ryan, that missive pissed me off.

Note that they wrote an entire alarming letter without a single link or other reference to the actual statements that they attribute to the administration. As near as I can tell this was garnered from a speech, and I haven't even found a transcript yet.

But I'm supposed to write my Congressional representatives to "do something" about a speech?

 

[BLS53]

Don't have a transcript, but this USA Today article is more detailed:

Military groups slam Obama plan to raise co-pays

 

[Nords]

Don't have a transcript, but this USA Today article is more detailed:
Military groups slam Obama plan to raise co-pays

I really hesitate to blog about these proposals until I can point to a solid reference. You can do a lot when you can point to the Defense Business Board's misspelled PowerPoint slides. It's a bit harder when a journalist refers to "the latest from the Administration". So far the newspaper articles referring to a speech (Obama? Some other spokesperson?) just don't seem to cut it.

MOAA's been crying wolf a bit too much these days. Along with their offer of Medigap insurance for military retirees already eligible for TFL, I fear MOAA is turning into the military version of AARP. Medigap for TFL beneficiaries may be the right choice for some, but MOAA has their fingers in way too many financial pies to remain objective.

 

[JPatrick]

Along with their offer of Medigap insurance for military retirees already eligible for TFL, I fear MOAA is turning into the military version of AARP. Medigap for TFL beneficiaries may be the right choice for some, but MOAA has their fingers in way too many financial pies to remain objective.

Yup, I'd guess that the junk mail I get from MOAA at least equals that from AARP..

 

[2soon2tell]

Disabled veteran benefits may be next.

 

[Nords]

Disabled veteran benefits may be next.

I think DoD and the administration can propose anything they want on that one, but I bet the veteran's vote turnout is going to be pretty strong in 2012...

 

[BLS53]

I really hesitate to blog about these proposals until I can point to a solid reference. You can do a lot when you can point to the Defense Business Board's misspelled PowerPoint slides. It's a bit harder when a journalist refers to "the latest from the Administration". So far the newspaper articles referring to a speech (Obama? Some other spokesperson?) just don't seem to cut it.

MOAA's been crying wolf a bit too much these days. Along with their offer of Medigap insurance for military retirees already eligible for TFL, I fear MOAA is turning into the military version of AARP. Medigap for TFL beneficiaries may be the right choice for some, but MOAA has their fingers in way too many financial pies to remain objective.

I don't think the President made a speech detailing this. I think the details are probably located somewhere in a lengthy document describing the "debt reduction plan".

There's too many of these "plans" floating around from various government and political sources to take any of them seriously. Even one's originating in the Whitehouse.

Then there's the "committee" that's suppose to report in November.

Since the much trumpeted Simpson-Bowles committee came and went with little impact, I don't spend much time Googling for all this stuff. Nothing's going to happen until after the 2012 elections, and only then if one party gains both Congress and the Whitehouse. Until then it's all rhetoric.

Hope I didn't get too political, didn't mean to.

 

[M Paquette]

I really hesitate to blog about these proposals until I can point to a solid reference. You can do a lot when you can point to the Defense Business Board's misspelled PowerPoint slides.

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/jointcommitteereport.pdf

This gets you the PDF of the document being waved about by assorted persons of a political bent.

Page 20 has the stuff on TRICARE-For-Life getting 'modest annual fees ... beginning with a $200 annual fee in 2013", and the targeted increases to TRICARE pharmacy benefit copayments, to 'move the TRICARE pharmacy program closer to parity with the most popular Federal employee health plan, BlueCross BlueShield Standard and closer to the health plans that most Americans have from their employers.'

Page 21 discusses 'Establish a commission to review military retirement benefits.' Not much in the way of details there, either.

The document explicitly states:

The Administration believes that any major military retirement reforms should include grandfathering provisions that ensure that the country does not break faith with military personnel now serving, including those serving in Afghanistan and Iraq.

 

[braumeister]

Thanks for that link, M Paquette.

As we all know, we've been down this road before, and we saw what it did to military retention, and we saw how the changes had to be reversed.

It appears we're going to have to go through the drill again.

 

[Nords]

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/jointcommitteereport.pdf
This gets you the PDF of the document being waved about by assorted persons of a political bent.

Ah, thank you. I was wasting a lot of time on Reuters, AP, and Washington Post. (Would it have killed MOAA to offer a link?!?) Now I can start writing the blog post!

 

[nun]

I'd like to see a coalition between military, federal, state and private sector retirees to protect their promised retirement benefits. Billions have been taken from state and private sector benefits already, it's no surprise that the military are next.

 

[ERD50]

.... to protect their promised retirement benefits. Billions have been taken from state and private sector benefits already, ...

Where have these billions been taken from promised benefits? I guess the only thing I'm aware of is high earners who had to take a % of their retirement based on PBGC rules (UAL pilots come to mind).

If you are talking changes to future earned benefits, that's different - those are not 'retirees'.

-ERD50

 

[ziggy29]

I'd like to see a coalition between military, federal, state and private sector retirees to protect their promised retirement benefits. Billions have been taken from state and private sector benefits already, it's no surprise that the military are next.

Unfortunately, it's harder to get most of the private sector on board because most of us have already lost the deal and we're made to feel like we're asked to pay more and more to allow others to keep the deal that was taken from us. I think any serious attempt to stop the erosion of middle/working class retirement benefits needs to start with addressing the problems the pensionless private sector "401K generation" is facing.

I really do think the backlash against public sector pensions and the decline of private sector compensation and benefits are linked -- heavily. When we private sector schmucks were toiling away with wages that kept up with inflation, when we had pensions and retiree health insurance waiting for us, we didn't begrudge paying taxes for government workers to get the same deal. But when we lose those things and don't get a raise for 5 years, we need every cent we can get for our own retirement -- if we're to have a retirement at all. Asking folks in this situation to sacrifice more so others don't have to sacrifice at all is likely a losing battle. The fortunes of the private sector working class need to turn somehow. Until that happens, I fear the working class will be effectively turned against itself.

[Edit to add -- and should be more than just "retirees" protecting themselves, it should be all who work or are now retired. Let's not create another "us versus them" between current retirees and future retirees -- the middle class doesn't need to be divided and conquered any more than it already is. We should pursue policies that *align* the interests of younger workers and retirees, not encourage the mindset of "protect our retirement benefits by screwing our grandkids out of them". And unfortunately, too many public policy debates related to retirement issues turn into "young versus old" advocacy, which is not a good thing.]

 

[Tadpole]

A question for all of you - While you worry about bringing everyone down to the same level (or not), what level are you wishing for your grandchildren (or future workers)? Does anyone care beyond the consequences to or bitterness about their own bottom line?

I really draw the line when it comes to military promises made by the nation.

 

[ziggy29]

A question for all of you - While you worry about bringing everyone down to the same level (or not), what level are you wishing for your grandchildren (or future workers)? Does anyone care beyond the consequences to or bitterness about their own bottom line?

When you are struggling financially, yes, self-interest is a very powerful thing. When you get no raises for 5 years and your pension and retiree medical are taken away and your 401K is in the tank and you're asked to sacrifice more for the benefit of others (when no one rallied to your aid), yes, self-interest is a very powerful thing.

As I said -- as long as the fate of private and public sector labor diverges, the more we'll be divided along those lines. If the private sector felt like they had a decent, secure retirement in their future it would be far easier to "sell" them on the shared sacrifice idea. When people are reeling financially, when their retirements are taken away and their real wages are shrinking steadily, you won't find many of them in a "giving" mood.

I could just as easily say it's self-centered to expect people who have already been kicked around to accept being kicked around more so you don't have to be kicked at all. Isn't it better to stop everyone from being kicked around so we can all get each other's back and unite in a common interest again?

I really draw the line when it comes to military promises made by the nation.

For what it's worth, I think the military is a special case for a variety of reasons, though "promises" really only apply to current workers and retirees, and really only to service already performed.

 

[Midpack]

Well said Ziggy, sad but very true.

 

[eytonxav]

Unfortunately, it's harder to get most of the private sector on board because most of us have already lost the deal and we're made to feel like we're asked to pay more and more to allow others to keep the deal that was taken from us. I think any serious attempt to stop the erosion of middle/working class retirement benefits needs to start with addressing the problems the pensionless private sector "401K generation" is facing.

I really do think the backlash against public sector pensions and the decline of private sector compensation and benefits are linked -- heavily. When we private sector schmucks were toiling away with wages that kept up with inflation, when we had pensions and retiree health insurance waiting for us, we didn't begrudge paying taxes for government workers to get the same deal. But when we lose those things and don't get a raise for 5 years, we need every cent we can get for our own retirement -- if we're to have a retirement at all. Asking folks in this situation to sacrifice more so others don't have to sacrifice at all is likely a losing battle. The fortunes of the private sector working class need to turn somehow. Until that happens, I fear the working class will be effectively turned against itself.

[Edit to add -- and should be more than just "retirees" protecting themselves, it should be all who work or are now retired. Let's not create another "us versus them" between current retirees and future retirees -- the middle class doesn't need to be divided and conquered any more than it already is. We should pursue policies that *align* the interests of younger workers and retirees, not encourage the mindset of "protect our retirement benefits by screwing our grandkids out of them". And unfortunately, too many public policy debates related to retirement issues turn into "young versus old" advocacy, which is not a good thing.]

I think there is one www.ProtectSeniors.org . They have been lobbying congress for some time regarding various benefit givebacks that affect seniors that were legislated in by congress to provide loopholes to drop promised benefits, while congress itself seems to be exempted from everything.

 

[Gatordoc50]

The low interest rate is the real killer. Operation twist only makes it worse. My son is applying to dental school. When I went you could pay for tuition and living costs of dental school with 120K in CDs and never touch the principal. Now that would take about 4 million in CDs. What a difference 25 years makes!!!!!

 

[nun]

Where have these billions been taken from promised benefits? I guess the only thing I'm aware of is high earners who had to take a % of their retirement based on PBGC rules (UAL pilots come to mind).

If you are talking changes to future earned benefits, that's different - those are not 'retirees'.

-ERD50

Shareholders and executives. Replacement of defined benefit pension plans with 401ks was the start of it, then the reduction or removal of healthcare. The latter has been an issue for those retired and those still working. There is a new book out about this.

Ellen Schultz Interview, Retirement Heist, Employee Pensions - Author Speaks - AARP Bulletin

 

[ERD50]

In answer to:

Originally Posted by ERD50
Where have these billions been taken from promised benefits? I guess the only thing I'm aware of is high earners who had to take a % of their retirement based on PBGC rules (UAL pilots come to mind).

If you are talking changes to future earned benefits, that's different - those are not 'retirees'.

-ERD50

... you replied:

Shareholders and executives. Replacement of defined benefit pension plans with 401ks was the start of it, then the reduction or removal of healthcare. The latter has been an issue for those retired and those still working. ...

But your statement was (bold/underline added):

I'd like to see a coalition between military, federal, state and private sector retirees to protect their promised retirement benefits. Billions have been taken from state and private sector benefits already, it's no surprise that the military are next.

Again - I don't think the retirees have had billions taken.

If you are saying current employees need to try to protect future benefits, well OK, but that's gonna be tough. There is world-wide competition now, where is the power to negotiate this going to come from?

Imagine that you are starting a business, and decide to pay all these benefits. Can you do it and be competitive? And FWIW, I actually disagree that these 'promises' of future benefits are a good thing. Promises can be (and are) broken. Ask those UAL employees if they would have preferred to have the money in a 401K, or the lower % they got after the companay went through bankruptcy.

Human Toll of a Pension Default

Ellen Saracini lost her husband, United Airlines Capt. Victor J. Saracini, when his Flight 175 crashed into the World Trade Center on Sept. 11, 2001. Now she stands to lose more than half of her widow's pension in a very different kind of crash -- United's default of its $9 billion pension obligations. ....

The Pension Benefit Guarantee Corp. (PBGC), the federal insurance program that faces its own solvency crisis and is to take over the United pensions, ensures a maximum of $45,000 a year in benefits for those who retired at 65, but considerably less for those who retired younger -- much as Social Security pays less to early retirees. This particularly hurts pilots, whom the law requires to retire from major airlines at 60 and who now collect as much as $125,000 a year in pensions, depending on length of service. The PBGC's maximum coverage for those who retire at 60 is $28,000 -- a cut of 50 to 75 percent for pilots. Saracini will receive even less because her husband was 51 when he was killed.

-ERD50

 

[HawkeyeNFO]

Ellen Saracini lost her husband, United Airlines Capt. Victor J. Saracini, when his Flight 175 crashed into the World Trade Center on Sept. 11, 2001. Now she stands to lose more than half of her widow's pension in a very different kind of crash -- United's default of its $9 billion pension obligations. ....

The Pension Benefit Guarantee Corp. (PBGC), the federal insurance program that faces its own solvency crisis and is to take over the United pensions, ensures a maximum of $45,000 a year in benefits for those who retired at 65, but considerably less for those who retired younger -- much as Social Security pays less to early retirees. This particularly hurts pilots, whom the law requires to retire from major airlines at 60 and who now collect as much as $125,000 a year in pensions, depending on length of service. The PBGC's maximum coverage for those who retire at 60 is $28,000 -- a cut of 50 to 75 percent for pilots. Saracini will receive even less because her husband was 51 when he was killed.

I don't feel sorry for her at all. In all the post 9-11 knee-jerk reactions, the families of each 9-11 victim were given $1,000,000 from the US taxpayers. IMO, that's what life insurance is for, not the gov't.

 

[nun]

In answer to: ... you replied:



But your statement was (bold/underline added):




Again - I don't think the retirees have had billions taken.




-ERD50

Many in retirement have seen health benefits reduced or removed. COLAs on pensions are also often targeted. But I agree that the biggest problems exist for current employees who see benefits continually reduced and have had pension accounts raided by corporations.

The raiding of pensions has happened at may successful corporations, what's their excuse?

 

[M Paquette]

I don't feel sorry for her at all. In all the post 9-11 knee-jerk reactions, the families of each 9-11 victim were given $1,000,000 from the US taxpayers. IMO, that's what life insurance is for, not the gov't.

Beware of exclusion clauses. Exclusion clauses are typically written to exclude war and acts of terrorism. Definitions of terrorism can vary, but the standard definition specifies that a terrorist act is one that results in at least $25 million in property damage, or kills or seriously injures at least 50 people. In addition, any attack that employs nuclear, chemical or biological weapons is classified as a terrorist attack. Acts of cyberterrorism are also generally excluded. Exclusions may vary by state.

Where terrorism coverage is available, it is generally backstopped by a US federal government reinsurance program.