How will the new retirement system affect the guard/reserve component?

MSgt Keith Hebert — Sun, 03 Jan 2016 21:44:13 -0500

Response by MAJ Rene De La Rosa made Jan 3 at 2016 9:47 PM

MAJ Rene De La Rosa — Sun, 03 Jan 2016 21:47:41 -0500

I think this is going to be a future problem. People can pick up and leave whenever they get sick and tired of the military. It will be a rarity to find a twenty year woman or man; if they get fed up with the military one day, they could be out and about in one year. That knowledge base will be lost to the Army.

Response by MSgt Private RallyPoint Member made Jan 3 at 2016 10:21 PM

MSgt Private RallyPoint Member — Sun, 03 Jan 2016 22:21:13 -0500

This is going to damage heavily, an already beleaguered force.

The majority of leaders in the Guard and Reserve have at least one Active duty enlistment under their belts. They came over, in large part, because the points count toward a retirement rather than simply separating. They form the nucleus of their component.

We are losing people with 15+ years in and less than 20-while there is still the carrot of a retirement that they can start collecting in a couple of decades.

Response by MSgt Private RallyPoint Member made Jan 3 at 2016 10:24 PM

MSgt Private RallyPoint Member — Sun, 03 Jan 2016 22:24:18 -0500

The other possibility is that we misread the question and what was actually asked was "Does the new retirement system impact the Guard and Reserve Components? I have not heard how that will be updated."

Response by CAPT Kevin B. made Jan 3 at 2016 11:11 PM

CAPT Kevin B. — Sun, 03 Jan 2016 23:11:13 -0500

The Reserve retirement system has mostly been "there" since WWI. You don't get anything until 60 anyways. The question will be if you want to contribute some of your monthly bump into TSP. If there still is "matching", then it's a great investment. You'll want 2-3 retirement streams excluding Social Security if you want to stop everything but see the same income. So it is really a question of what are you doing to create those 2-3 streams? If Guard/Reserve isn't one you need or think is worth the hassle, then you excluded one option. You'll still need the 2-3 checks a month.

Response by MAJ Ken Landgren made Jan 4 at 2016 12:57 PM

MAJ Ken Landgren — Mon, 04 Jan 2016 12:57:59 -0500

They are not promoting TSP for AR and NG at all. That is my perception.

Response by PO3 Private RallyPoint Member made Jan 4 at 2016 2:56 PM

PO3 Private RallyPoint Member — Mon, 04 Jan 2016 14:56:56 -0500

I believe .... there isn't anything in it that will affect the guard/reserve ....maybe the final calculation of the pension ... It didn't mention anything about reserve or guard.

Response by 1SG Private RallyPoint Member made Jan 4 at 2016 5:16 PM

1SG Private RallyPoint Member — Mon, 04 Jan 2016 17:16:35 -0500

I have 20 plus between active and National Guard and from my annual statements in RPAM, we are retired on a point system. Not sure if that will be affected, but it is not a traditional AD retirement.

Response by Lt Col Private RallyPoint Member made Jan 5 at 2016 4:49 AM

Lt Col Private RallyPoint Member — Tue, 05 Jan 2016 04:49:20 -0500

I have been curious on how that will be also. If you go from different statuses. I know a lot people that bounce around from Guard to Reserve and back, even some who have bounced around different services.

It's a relevant question to know if you switch from Cat-A t IRR then back to a Cat A or B go from reserve to guard or another service, when you do a change in status does that throw you into the new system. Hopefully they grandfather your original entry date. Or else yeah we all going to be hosed!

Response by TSgt Private RallyPoint Member made Jan 6 at 2016 6:50 PM

TSgt Private RallyPoint Member — Wed, 06 Jan 2016 18:50:09 -0500

From my understanding(fair amount of reading of the bill) it will not affect any of us that are currently guard or reserves. The change will be based on your initial entry to the military not if you change branches. Even if you are IRR your counter is still active.

Now how it will affect people that get completely out and then try to join again after the new system goes into place...

Response by SGM David W. Carr LOM, DMSM MP SGT made Jan 31 at 2016 4:23 PM

SGM David W. Carr LOM, DMSM MP SGT — Sun, 31 Jan 2016 16:23:43 -0500

MSgt Keith Hebert Not really sure

Response by LTC Yinon Weiss made Jan 31 at 2016 4:35 PM

LTC Yinon Weiss — Sun, 31 Jan 2016 16:35:39 -0500

According to this Congressional Research Service white paper, there will not be drastic changes to the way the reserve component retirement system works, but the total payout could be a lot lower. The main change is a reduction of benefit calculation from 2.5% to 2% per year of service, which sounds to me like a 20% reduction in retirement. So active duty will retire at 40% instead of 50%, and reservists would see a similar 20% reduction of whatever they would get now upon retirement. This only applies however to those who enter service after Jan 1, 2018, if I'm reading it correctly (please comment if you can clarify otherwise).

"...the [current] reserve retirement system also accrues at the rate of 2.5% per “equivalent year” of qualifying service (explained below) at retirement eligibility for those who enter service prior to January 1, 2018, and 2.0% for those who enter on or after January 1, 2018."

See bottom of page 7: https://www.fas.org/sgp/crs/misc/RL34751.pdf

Also, it's not clear whether the reserve component branches will match 401k style savings.

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Response by 1LT A. Uribe made Feb 6 at 2016 8:06 AM

1LT A. Uribe — Sat, 06 Feb 2016 08:06:54 -0500

Speaking from a federal employee under a similar retirement system (FERS), and based on stories this took effect back in the 80's (CRCS). Corporate Anerica has followed suit as well and to be honest, it will only be a matter of time before it's widely accepted.