The Value of a CSRS Pension

[Purron]

Just an interesting note about the intent of social security:

When Roosevelt signed Social Security into law on August 14, 1935, he said, “The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure. Young people have come to wonder what would be their lot when they came to old age. The man with a job has wondered how long the job would last. This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is, in short, a law that will take care of human needs and at the same time provide the United States an economic structure of vastly greater soundness.”

Source: Social Security Online

Seems to me those words could be uttered today. I might replace the world "industrial" with "global" to reflect the reality of the global ecomony and its impact on business and the US job market. Otherwise, we face similiar insecurities today as people did in the 1930s.

[Nords]

Quote:

Originally Posted by GregLee What does that mean?

Sorry, I missed this until my Saturday-morning search.

I'm having trouble finding links about sanctuary, so if anyone has been in that situation and has a website reference then please let me know. I think I can dig up the pertinent hardcopy instructions but they're filed deep in our file closet. Most of what I know about it came from a Reserve Center CO and a program manager at BUPERS N9. The sanctuary program is a tiny little niche in the Reserve system.

Federal law says that if military reach 18 years of active duty then they generally can't be forced out of the military before reaching retirement eligibility. It's intended to protect people who for one reason or another don't promote or whose enlistment contracts end between the 18-20 year marks. It won't protect military who commit heinous violations of the UCMJ, and for a short period in the 1990s "retirement eligibility" was interpreted to mean "anything over 15 years" under the Temporary Early Retirement Authorization program. But essentially the rule is that if you get to 18 then the DoD has to let you stay until retirement eligibility, which in the vast majority of cases means 20.

"Sanctuary" is the name of the program that tracks this active-duty status for Reservists. A Reservist with a lot of active duty could easily arrange to get themselves mobilized, exceed 18 years of total active duty days, and then invoke the federal law to be allowed to stay on active duty until they reach 20 years of service. Then they'd be eligible to retire for an immediate (active-duty) pension instead of having to wait until age 60 for their Reserve pension. (Woo-hoo!!) I don't know if it's the same trigger for all services, but if a Navy Reservist gets to 16 (sixteen) years of active-duty points then they're tracked under sanctuary. They can't get ordered to active duty for more than 30 days without the express permission of the BUPERS N9 sanctuary manager. This has been interpreted to mean that they can't be mobilized on active duty for a total of more than 18 years. They can still drill and they can do shorter orders, but they can't go for more than 30 consecutive days of active duty. They can request to be mobilized under a waiver (which may put them over the 18-year point) but I've even seen Navy admiral's requests fail to get an exception to the BUPERS policy.

There are very very few Reservists who accumulate over 12 years of active-duty points, let alone push the 18-year mark. It usually happens when someone enters the Reserves after a long active-duty career and then gets a lot of active duty on Reserve orders. But after 9/11 many Reservists were mobilized for longer than a year, and enough of them reached 18 years of service that the issue came to the attention of DoD. DoD's policy is that the services are allowed to let their members exceed 18 years as long as that service is willing to pay their active-duty pension out of the service's operational funds instead of DoD's Reserve pension funds.

From what I've seen at PACOM, the Marines and the Army don't worry too much about busting sanctuary. If they need someone badly enough then that's the price they're willing to pay. I'm not sure about the Air Force. But one Navy Reserve officer in the sanctuary program (with 16 years and a few months of active duty) was mobilized for 12+ months and then got injured while on those orders, which put him on extended limited duty and required a medical evaluation board. At 17 years and 11 months, BUPERS N9 actually stepped into BUMED's territory to demobilize the guy two days before he would've gone over 18. Technically he lost his active-duty medical benefits and was no longer eligible for whatever LIMDU/MEB treatment recommendations were in effect, but that was somehow worked out to "do the right thing" medically while still avoiding going over 18.

Probably more than you ever wanted to know, but maybe someone out there has the website links for my files.

[martyb]

Over the years, I've known a few AF Reservists who had 12-15 or so years of active duty, before ever coming into the reserves. Varying stories. I did know one guy (enlisted) who had completed 18 year active duty in the Army, then took a buyout of $75000, then, joined the AF Reserves. He drilled about a year with us if I recall correctly, then the BRAC Commission shut down our base & unit. He was able to pull man-days here & there, & get a few short term orders, but at some point, after I had already moved on, I heard the sanctuary tracking thing shut him down just short of getting the full 20 years. Don't know if he ever found a way around that or not.

As far as the people with 15 or so years active before joining the reserves, even with that many years, it will still take them quite awhile doing just normal drills & annual tours to get to the 7300 point mark for a 20 yr active retirement check. They'd have to pull a few deployments and/or other longer-term orders to get there. Military technicians, like I used to be, are a little more likely to get enough extra points to reach the 7300 milestone. I only accrued a total of 4000 points in 33 yrs, but my active duty time was just 4 1/2 years, and I never deployed.

[GregLee]

Quote:

Originally Posted by Nords From what I've seen at PACOM, the Marines and the Army don't worry too much about busting sanctuary.

Thanks much for your effort in answering my question. I have no connection at all with the military, so it was just curiosity. By the way, I don't think you got around to actually saying what "busting sanctuary" means.

[haha]

Quote:

Originally Posted by GregLee I am completely in sympathy with arguments that full retirement age should be increased in accordance with the increase in life expectancy, with the side benefit that the pay-as-you-go system for funding SS could then be extended far into the future -- perhaps forever. It would be fair, and it would make the system work. But I'm just saying that the original intent of the authorizing legislation strikes me as being irrelevant to such issues, having a merely historical interest.

Obviously. When an oddly inflexible purely historical interpretation of some vital institution is put forth, there is an agenda. It just isn't being mentioned out loud.

Ha

[ERD50]

Quote:

Originally Posted by Purron Just an interesting note about the intent of social security: When Roosevelt signed Social Security into law on August 14, 1935, he said, “The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure. Young people have come to wonder what would be their lot when they came to old age. The man with a job has wondered how long the job would last. .... Seems to me those words could be uttered today. I might replace the world "industrial" with "global" to reflect the reality of the global ecomony and its impact on business and the US job market. Otherwise, we face similiar insecurities today as people did in the 1930s.

It is interesting to note, but I guess I'm missing just what made old age in the industrial age any less secure than old age in previous times? I would think just the opposite, that a factory or office job would be easier to do in old age than physical labor. I get the sense that this is politicians creating a problem so they can take credit for providing a solution (which you now owe them a vote for).

Is the global economy making our future less secure? Probably so. I'd rather plan for it than count on the govt taking care of me.

-ERD50

[ERD50]

Quote:

Originally Posted by beowulf There is also the age issue - in 1934, the age expectancy in the US, according to the CDC, was 61.1 years. In 2007 it was 77.9 years. ... The actuarial basis for the viability of SS was that about half of those covered would die before they collected anything.

Wrong statistic (common mistake). Those are life expectancies at birth. Some of those people never made it to an age to pay into SS, deaths at a young age due to disease were more common in those days. Half of those 60 YO in the 1930's would live to ~ 75 YO.

So you show an increase in LE of ~ 16 years. But for people 40, 50 and 60 YO, those increases from the 1930's to now are a more modest 8, 7 and 6 years (that was for white males, the first data I came across was segregated by race/gender, but the deltas are probably close across the board).

-EDR50

[GregLee]

Quote:

Originally Posted by ERD50 ... I'm missing just what made old age in the industrial age any less secure than old age in previous times?

No extended family with younger relatives around the house to take care of you.

[ERD50]

Quote:

Originally Posted by GregLee No extended family with younger relatives around the house to take care of you.

But that was cultural - what is about industrialization (or globalization) that changes that?

Seems to me a family of factory workers, office workers, or miners could live in a multi-generation household as easily as a farmer, miller, alchemist or innkeeper. I know families who do it today - I don't see anything stopping others, other than personal choice.

-ERD50

[GregLee]

Quote:

Originally Posted by ERD50 But that was cultural - what is about industrialization (or globalization) that changes that?

Someone who knows something about sociology could give you a better answer, I'm sure, but for one thing, in the industrial age, workers have to travel to where the work is. They leave the countryside where their relatives are and move to the city, or even to another nation.

[beowulf]

Nords-

Thank you for that excellent explanation of military retirement sanctuary. I have never heard it called that. Way back when I was on AD, I knew a Major who had been passed over twice and was hanging on to hit his 18. We all understood that once that happened, he would be able to stay in until 20. But the Army was catching up with him and he knew the end was near. At 17 years and 9 months he received his letter saying he would be discharged in 60 days. On day 58 he check himself into the hospital with all sorts of problems. He managed to stay there for 35 days. And guess what, after his miraculous recovery, he was able to get his last two years of AD. I vaguely remember something about the Army having to notify you of your impending discharge no less than 90 days before you hit your 20. They were right on the money with him. But he was a really good guy with some bad OERs and I was happy he got to stay.

I only managed 6 years of AD and got caught in all the time for promotion changes after RVN. It was time to say goodbye, but I sure am glad I stayed in the reserves.

[Nords]

Quote:

Originally Posted by GregLee Thanks much for your effort in answering my question. I have no connection at all with the military, so it was just curiosity. By the way, I don't think you got around to actually saying what "busting sanctuary" means.

Quote:

Originally Posted by beowulf Thank you for that excellent explanation of military retirement sanctuary. I have never heard it called that. Way back when I was on AD, I knew a Major who had been passed over twice and was hanging on to hit his 18. We all understood that once that happened, he would be able to stay in until 20. But the Army was catching up with him and he knew the end was near. At 17 years and 9 months he received his letter saying he would be discharged in 60 days. On day 58 he check himself into the hospital with all sorts of problems. He managed to stay there for 35 days. And guess what, after his miraculous recovery, he was able to get his last two years of AD. I vaguely remember something about the Army having to notify you of your impending discharge no less than 90 days before you hit your 20. They were right on the money with him. But he was a really good guy with some bad OERs and I was happy he got to stay.

Sorry 'bout that-- "busting sanctuary" is when a Reservist who's in sanctuary (over 16 years of points) manages to get mobilized to exceed 18 years of service. Once over 18 years they've busted the sanctuary system (with the official permission of their chain of command). At that point the federal law requires that the military keep them on active duty until retirement eligibility (20 years) and then they're eligible for an immediate active-duty military pension instead of a Reserve pension at age 60.

When spouse went from active duty to the Reserves with nearly 18 years of service, she immediately started hearing about this "sanctuary" thing. It took a couple months to find someone who knew the system, and she eventually tracked down the program manager at BUPERS N9 to get all the references. Meanwhile she was doing a good job in a Reserve drill billet at PACOM, which is chronically understaffed, so a flag officer decided that she needed to be mobilized. (Considering what happens when you bust sanctuary, she was happy to oblige.) She explained the sanctuary system to him and he decided that he rated a waiver. The flag communicated his desires up the chain to PACOM himself and the commander of the Navy Reserve, they approved back down the chain to the CO of the Reserve Center where she'd be mobilized, and on Friday the Reserve Center put out the orders for her to report next Tuesday. Of course a copy of those mobilization orders went to BUPERS N9.

Saturday morning the sanctuary program manager at Navy's BUPERS N9 told PACOM and Navy Reserve that they'd have to pay the cost of busting sanctuary-- the difference between spouse getting an active-duty O-5 pension at age 44 vs a Reserve pension at age 60. In big round numbers that 16-year difference was at least $500K. PACOM decided they weren't that understaffed after all... on Monday morning her mob orders were canceled.

But there have been a handful of Army and Marine Reservists who have managed to accomplish busting sanctuary.

As for O-4s getting to 20, Beowulf, when I was at COMSUBPAC in 1994 nearly a dozen of them were retired well short of 20. When Navy O-4s don't select for promotion to O-5 (at about the 14-16 year point) then they're put before another selection board that decides they can be "continued on active duty until retirement eligibility". Of course before 1994 the retirement eligibility was 20 years so everyone made their plans accordingly. Then in 1994 the Navy brought out the Temporary Early Retirement Authorization program which set retirement as early as 15 years (with some percentage of reduction of pension). These O-4s, who'd been planning to mark time until 20, were all declared immediately eligible for retirement... most of them with 16-17 years and a couple over 18. Didn't matter because they were being retired, not separated-- whoever had over 15 years was eligible for retirement and they were gone within 90 days. Many many family & financial plans were disrupted by this but legal challenges were unsuccessful.

I think TERA lasted until 1997 or '98, although I suppose it's a very handy drawdown tool that may be brought back in a few years.

[Purron]

Nords, love ya dude, but know what? Some emoticons wouldn't hurt here and there...

[beowulf]

My AD experience was in the early 1970s. No early retirements back then - 2 passovers and you were out.

Nords- your wife really have wanted to get out - I don't know of anyone with almost 18 years of AD service who voluntarily separated. So close, but yet so far .

I became a gray area retiree (for those not familiar with the terminology - means I retired from the reserves, but would not receive retired pay until I was 60) and we had both PX and commissary privilges, but no pay or medical benefits. That's a lot better than it was 10 years before when gray area retirees received no benefits at all. BTW, even though you may retire from the reserves, you can still be called back to active duty until you are age 60. Lots of reserve retirees who thought they were home free have been recalled over the past 7 years.

[Nords]

Quote:

Originally Posted by beowulf Nords- your wife really have wanted to get out - I don't know of anyone with almost 18 years of AD service who voluntarily separated. So close, but yet so far .

To put it mildly. A very inbred small community, a couple of bad assignment officers, the unrefusable offer. We played by the rules as long as we could but we're lucky-- most dual-military couples didn't make it as far as we did. By the time she decided the fighting was over my retirement was assured, and our LBYM lifestyle allowed us to realize that it was only money. The assignment officer's coercion assumption had been that nobody bails on a pension so close to vesting, so golly was there some 'splainin' to do at BUPERS when her resignation letter arrived.

She figured she could always get a real job, but Reserves turned out to be the best deal ever.

Gray area has gotten a lot better, hasn't it? I was astounded that DECA was spending $3M/year checking Reserve ID cards & orders at the commissaries and stamping ration cards. They didn't open it up for the Reservists-- they did it to save their own money.

Quote:

Originally Posted by beowulf BTW, even though you may retire from the reserves, you can still be called back to active duty until you are age 60. Lots of reserve retirees who thought they were home free have been recalled over the past 7 years.

It's definitely not the Cold War Reserves any more, but retiring (and risking mobilization) beats the heck out of resigning and missing out on all those gray-area pay raises.

I don't know what's written in the final set of Reserve orders, but I should point out that my active-duty retirement orders also contain a recall provision...

[beowulf]

I understand about assignment officers - some really nasty ones out there. After 3 years overseas, my next tour was unaccomanied in Korea. Time to pull the plug. Yep, if you retire and resign you lose an awful lot of COLAS.

My retirement orders listed my unit of assignment should I be activated, but that was just a placeholder. Obviously they would send me wherever I was needed.

Interesting about DECA. And all this time I thought they were just being nice to Reservists . When I first went in, you could only use the commissary during your 2 weeks of AD. Then it was changed to allow any 12 days during the year plus your 2 weeks AD. And finally, it went to unlimited. Of course, now that it's unlimited, we rarely go . After all, we have Wegman's .