Military Retirement Overhaul...

[flyeagle111]

Any current military guys/gals want to comment on what they think will happen with the retirement system for active duty?

DoD panel calls for radical retirement overhaul - Air Force News | News from Afghanistan & Iraq - Air Force Times

Seems like a big blow to those who have been in 15+ years, if this pension does indeed go away. Also, won't this effect retention rates drastically? I can't imagine many staying 20+ years now.

[chinaco]

Looks like 401k style defined contribution plan instead of pension.


As we go through the SS and Medicare debate and general govt spending. It would not surprise me to see many (maybe all) govt pension shifted to a DC plan.

[Bestwifeever]

Quote:

Originally Posted by flyeagle111 Any current military guys/gals want to comment on what they think will happen with the retirement system for active duty? DoD panel calls for radical retirement overhaul - Air Force News | News from Afghanistan & Iraq - Air Force Times Seems like a big blow to those who have been in 15+ years, if this pension does indeed go away. Also, won't this effect retention rates drastically? I can't imagine many staying 20+ years now.

I don't know if you saw this thread: http://www.early-retirement.org/foru...ent-57133.html

but you might find those posts interesting.

[flyeagle111]

Quote:

Originally Posted by Bestwifeever I don't know if you saw this thread: http://www.early-retirement.org/foru...ent-57133.html but you might find those posts interesting.

Thanks, I had not seen that thread. Controversial topic!

[Hobo]

I am USNR who served 2 years in Vietnam and 2 years in Bahrain. I get the feeling that public sentiment sees the military retirement system as a very sweet deal compared to the sacrifice. I have mixed emotions, but I get the feeling that many (if not all) of these government pension plans are going to be scaled back.

However, most of the talk is leave the system in place for those who have been promised a retirement benefit for many years. Cut-backs will probably be made for those people who are not really close to retirement. For your sake, I hope they draw the line at people less than 5 or 10 years of service. I know a lot of people stay in military service just for the retirement benefits. It would be really unfair to pull the rug out from people like you.

[rescueme]

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Originally Posted by Hobo I am USNR who served 2 years in Vietnam

You did? Blue or brown water?

[oma]

Quote:

Originally Posted by Hobo I am USNR who served 2 years in Vietnam and 2 years in Bahrain. I get the feeling that public sentiment sees the military retirement system as a very sweet deal compared to the sacrifice. I have mixed emotions, but I get the feeling that many (if not all) of these government pension plans are going to be scaled back. However, most of the talk is leave the system in place for those who have been promised a retirement benefit for many years. Cut-backs will probably be made for those people who are not really close to retirement. For your sake, I hope they draw the line at people less than 5 or 10 years of service. I know a lot of people stay in military service just for the retirement benefits. It would be really unfair to pull the rug out from people like you.

It would be fair to grandfather the latest recruits, but anyone enlisting after a certain date will be under the new proposal That would be only fair. I would have surely left the military at 8-10 yrs if i had known that the current system wouldn't be available. A google search shows that the military retirement system has been discussed for decades - this really isn't anything new, but there's more urgency due to the massive debt our country has.

[Hobo]

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Originally Posted by rescueme You did? Blue or brown water?

Blue-water, Navy Lt(jg) ships company aircraft carrier (USS Ranger)

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Originally Posted by oma It would be fair to grandfather the latest recruits, but anyone enlisting after a certain date will be under the new proposal That would be only fair. I would have surely left the military at 8-10 yrs if i had known that the current system wouldn't be available. A google search shows that the military retirement system has been discussed for decades - this really isn't anything new, but there's more urgency due to the massive debt our country has.

I sure wish we would hear a speech that we as Americans must all work together to help our nation grow back to prosperity again. Everybody must share the pain. We can't put the burden of suffering on only the rich or only those who earn their living from the Federal Government. Everybody must be willing to work 10% harder and willing to give up 10% of your income; be that by taking a small pay cut, or paying a little more taxes, or reduce your benefits expectations, such as retirement.

Right now all I hear is "make your cuts on somebody else, just not me". We are almost seeing class warefare and selfishness is certainly one of the prime reasons for Congressional deadlock. The country cannot grow out of this recession if we remain selfish by remaining to be part of the problem rather than part of the solution.

[Nords]

Here's the latest from Military Times columnist Tom Philpott
Don't Fear Scary Retirement Headlines

Quote:

Military careerists have been spun up this month, unnecessarily in our view, by sensational headlines and news bulletins about a plan to "slash" their retirement, citing a "Pentagon study." The study, described here in more muted tones in a late July, was done by the Defense Business Board, a group of independent business executives that advises the secretary of defense from time to time on ways to streamline department organizations and programs. For example, five years ago it urged consolidation of the Army, Navy and Air Force medical commands into a single joint command. That hasn't happened. In recent years the business board also has pressed for substantial TRICARE fee increases. That hasn't happened either. The retirement report, still a draft, proposes replacing the current 20-year defined retirement plan with a 401k-like pension that would grow though annual government contributions equal to as much as 16.5 percent of military basic pay. The idea is that more service members would leave after only a tour or two with portable retirement benefits, and yet the total cost to the government would fall sharply, along with lifetime benefits for careerists. Despite overheated headlines, no Department of Defense leader, civilian or military, has embraced this alternative pension system. Before he left office in July, then Defense Secretary Robert Gates did call for retirement reform. But Gates said any changes are likely to "grandfather," or protect, the current force. Adm. Mike Mullen, chairman of the Joint Chiefs, seconded that view last week, saying retirement changes have to be implemented with care and should not break faith with current members.

Quote:

Originally Posted by oma A google search shows that the military retirement system has been discussed for decades - this really isn't anything new, but there's more urgency due to the massive debt our country has.

"Centuries" of discussion, and the same massive debts that we faced back in the 1790s (that's not a typo-- that's after the Revolutionary War).

An early-retired (civilian & Canadian) friend with way too much time on his hands researched the subject and came up with this public-domain book that's been scanned by Google.
History of military pension ... - Google Books

Turns out that after the American Revolution it took three decades to settle on a "good" military pension system. A couple of those veterans actually survived to after the Civil War-- how frustrating that must have been. America was even paying military survivor benefits to Revolutionary widows through the 1870s, and to Civil War widows as late as 2003.

We humans lack a sense of historical perspective.

[JakeBrake]

Quote:

Originally Posted by Nords Here's the latest from Military Times columnist Tom Philpott Don't Fear Scary Retirement Headlines "Centuries" of discussion, and the same massive debts that we faced back in the 1790s (that's not a typo-- that's after the Revolutionary War). An early-retired (civilian & Canadian) friend with way too much time on his hands researched the subject and came up with this public-domain book that's been scanned by Google. History of military pension ... - Google Books Turns out that after the American Revolution it took three decades to settle on a "good" military pension system. A couple of those veterans actually survived to after the Civil War-- how frustrating that must have been. America was even paying military survivor benefits to Revolutionary widows through the 1870s, and to Civil War widows as late as 2003. We humans lack a sense of historical perspective.

Does the book mention the land grants that some Revolutionary War veterans received for their service? Some War of 1812 veterans also received land grants.

I don't know how to relate the value of a land grant to a pension, but I suspect the land grants were worth much more than any pension.

Both my surname GGG grandfather and his FIL, (my GGGG grandfather) who was also a Revolutionary War veteran received land grants on what was at the time the western frontier.

[REWahoo]

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Originally Posted by JakeBrake Does the book mention the land grants that some Revolutionary War veterans received for their service? Some War of 1812 veterans also received land grants. I don't know how to relate the value of a land grant to a pension, but I suspect the land grants were worth much more than any pension. Both my surname GGG grandfather and his FIL, (my GGGG grandfather) who was also a Revolutionary War veteran received land grants on what was at the time the western frontier.

I have a photocopy of the land grant President James Madison awarded my GGG grandfather for his service in the War of 1812. He received 160 acres of land in northeastern Arkansas.

[Nords]

My ancestors didn't really get going here until the late 19th century. One of them was a draft-dodger from Germany whose philosophy was "No More Franco-Prussian Wars!"

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Originally Posted by JakeBrake I don't know how to relate the value of a land grant to a pension, but I suspect the land grants were worth much more than any pension.

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Originally Posted by REWahoo I have a photocopy of the land grant President James Madison awarded my GGG grandfather for his service in the War of 1812. He received 160 acres of land in northeastern Arkansas.

The biggest problem with the land grants was that many (disabled) military retirees weren't able to make money from them because they were unable to work the land. Many of them also ended up selling their "commutation certificates" (promissory notes) and land grants to investors speculators for pennies on the dollar.

Quote:

On October 21, 1780, Congress after consideration of the report of the committee on General Washington's letter, resolved that all officers who should continue in service to the end of the war should be entitled to half pay during life to commence from the time of their reduction. This action was vigorously opposed in Congress and caused considerable agitation in some of the States.

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Since the Confederation had no available funds the officers received not money but commutation certificates payable to them or bearer and drawing interest at six per cent. These proved wretched security. No provision was made for paying either interest or principal. Many officers were driven by necessity to part with their certificates for what they could obtain and their cash value in the market soon fell to twelve and a half cents on the dollar. After the adoption of the Federal Constitution the act for the funding of the domestic debt provided that beginning with January 1 1791 the holders of commutation certificates should receive a three per cent stock for the interest in arrears, a six per cent stock for two thirds of the principal, and a deferred stock bearing no interest until the expiration of ten years and then at six per cent for the other third. At this time a large share of the certificates was in the hands of speculators, and officers who had parted with them for a small fraction of their face value lost all advantage from the provision so tardily made.

[Pajaro]

Current military member with 14 years in here, but I'm also a taxpayer. I've often thought of a pension system that wasn't for life. Let's say that everyone gets a pension of 2.5% of base pay per year served (including folks who did less than 20), but the pension lasts only as long as time served. So, the guy who does 20 years gets 20*2.5=50% for 20 years and that's it. The guy who does 4 years get 4*2.5=10% for 4 years. This way everyone gets something, but there is an incentive to stay longer.