Panel would shrink troops' retirement pay, offer 401(k)s

Army Times — Fri, 30 Jan 2015 09:49:42 -0500

From: Army Times

A detailed proposal to revamp military retirement that was sent to Capitol Hill would shrink the size of future troops' pensions and end the 20-year, all-or-nothing aspect of the current benefits package by starting 401(k)-style investment funds with government contributions for lower-ranking troops.

After a two-year study, the Military Compensation and Retirement Modernization Commission on Jan. 29 publicly unveiled 15 major recommendations that would give individual troops far more control over shaping and managing their own retirement packages.

One stunning feature of the new proposal is to give individual troops the option to forgo immediate monthly retirement checks and instead receive a lump-sum payment for the total value of their working-age retirement benefit between the time they leave service and the time they become eligible for their normal Social Security benefits, usually starting at age 67.

At its core, the new proposal would scale back the size of military pensions by 20 percent. Yet it preserves the current structure by continuing to offer the option of monthly checks immediately upon separation for those who serve 20 years.

Read the report: Military Compensation and Retirement Modernization Commission

To supplement that diminished pension, the proposal calls for government contributions to a 401(k)-style investment account — matching up to 5 percent of base pay — as well as a new lump-sum "continuation pay" for troops who go beyond 12 years of service.

According to the commission's calculations, the proposed retirement benefit's total value could be higher than the current system if service members contribute at least 3 percent of their basic pay and also their lump-sum 12-year continuation pay to their TSP account. The total value of the proposed package would be significantly lower for troops who chose not to invest portions of their basic pay and continuation pay.

The recommendations also include big changes to the military health care system by eliminating Tricare coverage and moving millions of military dependents and retirees into health care policies similar to those offered to federal civilian workers.

All these proposals require congressional action, and the commission has drawn up proposed legislation that is ready for lawmakers to vote on, if they choose to do so. Many experts say Congress is unlikely to enact major changes on this controversial issue in today's political environment.

But the report is likely to spark renewed debate about the military compensation system, which has changed little in the past 40 years. Senior Pentagon leaders say it is costly and unsustainable and will erode the Defense Department's ability to invest in weapons modernization and high-tech research. The commission was created by Congress two years ago to address some of those concerns.

However, the commission's proposal would not save the Defense Department a large block of money. If adopted, the commission projects this alternative retirement plan would save the Pentagon less than $2 billion per year in the long run. That's less than 1 percent of the total Defense Department budget.

The cost savings from the reduced pension are limited due to the expense of providing a new retirement benefit to troops who serve less than 20 years.

Commissioners acknowledged that this proposal is not going to resolve the Pentagon leadership's concerns about rising personnel costs.

"This is a small first step," said Larry Pressler, one of the nine commissioners who is a former congressman from South Dakota and a Vietnam war veteran. "This isn't going to solve the big issue."

Commissioners emphasized that cost-savings was not their primary goal. Instead, they sought to modernize the current system and craft changes that appeal to today's generation of service members.

"The All-Volunteer Force increasingly comprises Service members born after 1980, members of the 'millennial' generation. Research has shown members of this generation change jobs frequently and tend to favor flexible retirement options, rather than the defined benefit pension plans preferred by previous generations," the commission wrote in its 280-page report.

The commission's changes could apply only to future recruits and would grandfather today's service members under the current system — but would give them the choice to opt in. For example, today's young service members who have no interest in staying for 20 years might choose to opt into the new deal and receive government contributions to their investment account.

The commission surveyed more than 150,000 active-duty and retired service members last year to gauge their preferences on compensation. Extensive analysis suggests that the new proposal would meet the force's current recruitment and retention needs, the commission said.

Multiplier drops to 2.0

The proposal calls for reducing the "multiplier" used to calculate military retirement. Today's system calculates future pension checks by taking the amount of basic pay members receive in their latter years of service and calculating a percentage by multiplying the number of years served times 2.5. That means troops who serve 20 years receive checks equal to 50 percent of their final pay.

The proposal would lower that multiplier from today's 2.5 to 2.0, a change that over time shaves of thousands of dollars in total payments. For a retiree who served 20 years, pension checks would reflect only 40 percent of his final basic pay.

For example, an service member who retires at the E-7 paygrade after 20 years of experience would hypothetically under the proposed system receive a pension with an estimated value of about $161,000, compared to $201,000 under the current system, according to data in the commission's report. For an officer leaving after 20 years as an O-5, the proposed system would offer a pension valued at about $569,000 compared to about $711,000 under the current system.

One potentially big change included in the commission's proposal is to give the defense secretary the authority to modify the 20-year service requirement to qualify for a retirement pension. That all-important milestone of 20 years could be adjusted up or down for "an occupational specialty or other grouping of members, as defined by the Secretary," the report says.

12-year gate pay

The idea of continuation pay is likely to be popular with service members.

Troops who clear the milestone of 12 years of service would receive a lump-sum that will be at least 2.5 times one month's basic pay, and could range as high as 13 months' basic pay. For example, an active-duty E-7 would receive at least $10,000 and an active-duty O-4 would get at least $17,000.

The continuation pay would require agreeing to a four-year commitment, through 16 years of service.

The services could raise the continuation pay in particular career fields where they want to retain people. In most cases, retaining officers at today's rate would require continuation pays that exceed 10 months of basic pay, according to the commission's report.

Service members would be encouraged to immediately put that lump-sum payment in their TSP account, but would have no legal requirement to do so.

Lump-sum retirement

The plan would inject a new major decision into the lives of retiring service members. Those who clear 20 years and earn a pension would have the option of taking monthly checks just like the kind offered today, or to request a lump sum.

The proposal sketches out two lump-sum options. Troops can give up all monthly payments until age 67 in exchange for a check equal to the value of those working-age retiree benefits. Or they can ask for a hybrid arrangement that offers half the value in a lump sum immediately upon leaving the service and the other half spread out in monthly checks.

Regardless of their decision, the monthly pension checks resume at age 67 for all retirees, according to the plan.

Basic pay and matching contributions

The TSP element of the plan may be more controversial because it calls for automatically diverting a small percentage of basic pay into the savings account. Typically money deposited into a TSP is not available for withdrawal without tax penalty until age 59 and a half.

Under the plan, troops arriving at boot camp would be enrolled automatically in the Thrift Savings Plan, the 401(k)-style investment account for federal employees. They would receive government contributions to that account, which they can keep when it vests after completing two years of service.

Initially, the government contribution would be a modest 1 percent of basic pay. After that, service members with between three and 20 years of service would be encouraged to contribute their own money to the TSP and the government would provide matching funds up to 5 percent of basic pay.

The automatic enrollment in the TSP would include diverting 3 percent of troops' basic pay into the savings account. If they want to change that contribution level, they can contact their financial office to raise it or lower it to zero.

However, every January all service members will be re-enrolled for a 3 percent contribution.

"The military is very accustomed to reinforced training and by doing this every year, hopefully we will condition their thinking to the point where [they think] 'OK this must be a good thing,'" said Alphonso Maldon, the commission's chairman who is a former Army officer and former assistant secretary of defense for force management and policy.

Financial literacy

According to the commission's calculations, the proposed retirement benefit's total value could be higher than the current system if service members contribute 3 percent of their basic pay and their lump-sum continuation pay to their TSP account.

The commission's survey showed that service members prefer options and want to have more control over shaping their own benefits package.

The new proposal is underpinned with the hope or assumption that service members will make good, informed financial decisions and sacrifice short-term spending power for long-term financial security.

The change might be popular among millennials.

But that flexibility also opens the door to financially risky decision-making. For example, a service member could choose to buy a family car with his or her 12-year continuation pay, which would reduce the long-term value of his or her investment account.

Or, on a larger scale, a retiring service member could request his retirement benefit in a lump-sum check to start a new business. If that business goes bust, that retired veteran could be destitute just a few years after leaving the military.

The commission acknowledged the issue in their recommendations and suggesting the Pentagon pencil in $75 million annually to administer on-going financial literacy education programs for service members. Troops would attend annual classes on money management, according to the plan.

Health care changes

In addition to retirement changes, the commission will unveil a proposal to fundamentally change how health care benefits are provided to military families and retirees. Those now served by Tricare could move into the health care coverage provided to federal employees, according to several people familiar with the report.

The proposal calls for a new health care allowance for troops that would be designed to cover some expenses, such as doctor-visit co-pays and eyeglasses.

The plan also calls for the Pentagon to create a new four-star command to oversee the Pentagon's sprawling health care system. Consolidation of the military system has been discussed for many years and would mark a significant break from the tradition of allowing each service to operate its own health care command.

The proposal calls for consolidating the commissary and exchange systems. Initially, they would keep their separate branding — Navy Exchange, Defense Commissary Agency, for example — but eventually would be combined.

Another morale, welfare and recreation aspect of the commission plan is building more brick-and-mortar child development centers on military bases, subject to the base commanders' discretion. Military families have long complained of a lack of sufficient child care on many military installations.

Potential impact

Still unknown is how large the commission's impact may be. Many experts say real change is unlikely in part because the commission's proposals will not get fast-tracked to an up-or-down vote but will instead move through Congress' normal arcane procedures.

Yet some veterans' advocates say Congress may be spurred to action by several factors, including budget pressures created by the across-the-board spending cuts known as sequestration. And it may prove easier politically to tackle this sensitive topic now that far fewer troops are deployed in combat zones overseas than just a few years ago.

"You have this appetite for change just as long as it saves money. This has created this opportunity, if you could call it that, to give something like this ... little scrutiny and quick implementation," said Mike Hayden, the director of government relations for the Military Officer Association of America, which opposes curtailing military benefits.

One criticism that will swiftly emerge is that moving troops' retirement into individual investment accounts will saddle them with new responsibilities for managing money, with many lacking the requisite skills.

The commission's report is hardly the first proposed overhaul of the military retirement system.

In 2011, the Defense Business Board, a Pentagon advisory group, published a detailed proposal that would have replaced monthly pension checks with 401(k)-style investment accounts. That suggested the government contributions should be at least 16.5 percent of basic pay, with higher rates for deployed service members or high-demand career fields.

That plan went nowhere after it was criticized by service members, disavowed by the Pentagon leadership and landed with a thud on Capitol Hill.

Last March, the Pentagon's personnel and readiness office broke its long silence on the topic and offered several detailed and complex alternatives to the current system: hybrid options that included both a TSP with government contributions as well as the promise of smaller, partial pension checks before traditional retirement age.

That plan also included some lump-sum payments for troops staying at least 20 years, offering a "transition pay" equal to as much as three years' basic pay.

The nine-member commission is chaired by Maldon and other members are Pressler, Dov Zakheim, Edmund Giambastiani, Peter Chiarelli, Bob Kerrey, Christopher Carney, Michael Higgins and Stephen Buyer.

http://www.armytimes.com/story/military/benefits/pay/2015/01/29/retirement-commission-overhaul/22482103/

Response by Sgt Aaron Kennedy, MS made Jan 29 at 2015 4:33 PM

Sgt Aaron Kennedy, MS — Thu, 29 Jan 2015 16:33:00 -0500

"In addition to retirement changes, the commission will unveil a proposal to fundamentally change how health care benefits are provided to military families and retirees. Those now served by Tricare could move into the health care coverage provided to federal employees, according to several people familiar with the report."

This sounds like moving retirees out of the Veterans Health Administration completely, and to a straight Insurance plan.

Response by CPT Zachary Brooks made Jan 30 at 2015 9:53 AM

CPT Zachary Brooks — Fri, 30 Jan 2015 09:53:25 -0500

Seems good theoretically and on paper. I would want to see more details.

Are we still grandfathered on the old plans?

Response by PO2 Stephen Brinkley (Scott) made Jan 30 at 2015 10:01 AM

PO2 Stephen Brinkley (Scott) — Fri, 30 Jan 2015 10:01:38 -0500

My biggest concern with this is that the service member started his TSP when he or she started basic. My other concern is that the individuals trying to create this receive at retirement 75% of their base salary + free medical + perks transferable to children! When is our congress going to take care of us and not them!

Response by CW5 Private RallyPoint Member made Jan 30 at 2015 10:21 AM

CW5 Private RallyPoint Member — Fri, 30 Jan 2015 10:21:19 -0500

As one of the commissioners said, "This is a first small step." And I see it as a step in the right direction. If 20-year retirements at 50% base pay are unsustainable, something's gotta give. The 401k/TSP element is a smart move.

Since something's gotta give, these adjustments are a good first step. The part that concerns me a bit is that different specialties may be treated differently when it comes to retirement and retirement benefits. I don't like that part of the proposal.

The best part is that these proposals will be grandfathered and won't affect those currently serving.

Response by SFC Private RallyPoint Member made Jan 30 at 2015 10:27 AM

SFC Private RallyPoint Member — Fri, 30 Jan 2015 10:27:21 -0500

I would like it if the DoD could become a little less "bloated" by allowing the market to help take care of retirees instead of relying solely on the taxpayers to do it. Bring on the changes.

Response by Col Joseph Lenertz made Jan 30 at 2015 10:44 AM

Col Joseph Lenertz — Fri, 30 Jan 2015 10:44:29 -0500

What it doesn't show, due to the assumption of individual contribution of 3% of pay towards your TSP (in order to get the gov matching 3%) means you are living on less for your entire career, in order to get the same benefits.
And how many people will actually invest the entire lump-sum continuation pay?
The comparison is designed to avoid making the new system look bad.

Response by MSG Private RallyPoint Member made Jan 30 at 2015 10:53 AM

MSG Private RallyPoint Member — Fri, 30 Jan 2015 10:53:15 -0500

A net increase in total benefit, net decrease in government expense, more personal control of ones finances... It seems like a good draft. Let's make a bigger impact, and apply the same model to all government pension plans. What's good for the goose...

Response by MSgt Bill Milligan made Jan 30 at 2015 11:04 AM

MSgt Bill Milligan — Fri, 30 Jan 2015 11:04:13 -0500

Over 56,000 dollars is from a 401K that is based on the ponzi scheme also known as Wall Street.
This is nothing but a bad deal for the troops especially the enlisted. I have a 401K with my current company and it has taken a lot of work and self education to mange it, to keep it not only growing but lowering my risk in the present QE print forever environment.
The true beneficiary will be the fund managers and companies that make heavy political donations to have additional investment money steered their way.

Response by SGT Bryon Sergent made Jan 30 at 2015 11:09 AM

SGT Bryon Sergent — Fri, 30 Jan 2015 11:09:01 -0500

Again this is something that PISSES me off. They can sit and suck us dry and they are the ones cutting out benefits and pay, making the people in the line of fire take the hit. Mean while they sit on there asses and vote themselves better benefits and pay increases and we have family and struggling to make ends meet and hitting the streets homeless. This is BS, pure unadulterated.
RANT Maybe over.

Response by Sgt Aaron Kennedy, MS made Jan 30 at 2015 11:09 AM

Sgt Aaron Kennedy, MS — Fri, 30 Jan 2015 11:09:06 -0500

Um.... I need to point a specific bullet out.

"Invests entire lump-sum continuation pay"

Assuming E-7 at 12 years, that is $3950 multiplied by 3.37 moths = $13,311.50

So... $248,649-201,282 = $47,367 gross. Subtract that lump-sum $13,311.50 right off the bat to give a more accurate picture of:

$34,055.50

Response by Maj Chris Nelson made Jan 30 at 2015 11:39 AM

Maj Chris Nelson — Fri, 30 Jan 2015 11:39:31 -0500

I see some pros and cons with this. Overall, I see a potential for savings to the federal budget and a possible increase in benefits to the retiring member. I can also see some type of retirement vesting for those that do not stay the full 20 years.....will receive something for their service. The drawbacks that I see are associated with the 401k portion: 1. requires investment by the service member, decreasing their take home money in the hopes of recouping some of it later and 2. praying that the market doesn't crash. I realize that there is one fund that is stable and isn't supposed to tank if the market does....but that has very low return...the other funds are better return but much higher risk. Unless there are classes to teach money management, specifically how to play the market EARLY in the career, and with refresher courses available, there would be a potential for setting up someone to loose more then they invest, thereby DECREASING retirement....potentially lower then what they would have had with traditional military retirement. What is the mechanism to prevent LOSS to the member of this "mandatory investment"?? Give me my 3%, I can eat, drink, and be marry today and have the same odds of loosing it as if the market were to crash (and I would have a good time doing it!).

Response by SPC Mark Beard made Jan 30 at 2015 12:03 PM

SPC Mark Beard — Fri, 30 Jan 2015 12:03:59 -0500

what about shrinking capitol Hills Pensions

Response by CSM Private RallyPoint Member made Jan 30 at 2015 12:08 PM

CSM Private RallyPoint Member — Fri, 30 Jan 2015 12:08:08 -0500

I throw the Bullshit flag. First they base it on a bunch of assumptions - it lists seven assumptions in the explanation. Then they use interest rates they pulled out of their ass to make the graphs and numbers look good. Did you see the footnote that they are using a 7.95% annual return and a 4.95% annual inflation adjustment? When was the last time we had those kind of rates? The 2014 inflation rate was 1.62% - a huge difference when compounded over a 20 year life cycle. A 7.95% return requires some higher risk funds and you can't count on those. I'd like to see those same bar graph examples and numbers using more realistic and current rates. If they did, you would probably see the total would be LESS than the current system, not more. It would make a lot of you thinking this might be a good idea to think twice.

Edit 12 hours after original post: I misquoted the original annual return as being 7.95% when it was actually 7.3%. Sorry for the inaccurate information (but it still doesn't change my position).

Response by CPT Zachary Brooks made Jan 30 at 2015 12:14 PM

CPT Zachary Brooks — Fri, 30 Jan 2015 12:14:07 -0500

I wish they would cut these kinds of programs first:

http://www.businessinsider.com/congressmen-want-to-force-the-army-to-buy-33-battle-tanks-it-says-it-doesnt-even-need-2012-5

This is a perfect example of Congress making deals for their own support at the expense of tax payers and service members. We need to get rid of these kinds of deals before they start taking money from Joe.

I make enough that I can have investments elsewhere, Joe might not.

Congress Is Forcing The Army To Buy 33 Battle Tanks It Doesn't Even Want

To keep a contractor's factory in business.

Response by CW2 Private RallyPoint Member made Jan 30 at 2015 12:39 PM

CW2 Private RallyPoint Member — Fri, 30 Jan 2015 12:39:05 -0500

No Deal Howie!

Response by SFC Jeff Gurchinoff made Jan 30 at 2015 12:57 PM

SFC Jeff Gurchinoff — Fri, 30 Jan 2015 12:57:34 -0500

Figures lie and liars figure. Comparison assumes 7.3% average return? 4.95% adjusted for inflation? ..... Well our current retirement system relied on regular COLA adjustments to keep our pensions in line with inflation as well. The 1.7% increase we were "Guaranteed" going into October miraculously turned itself into a 1% raise in retirement reality. There is too much convoluted numerical BS listed for anyone (even a Math or Economics major) to come even close to the assumption these dollar amounts will be correct... ever....

Response by MSG Private RallyPoint Member made Jan 30 at 2015 1:32 PM

MSG Private RallyPoint Member — Fri, 30 Jan 2015 13:32:18 -0500

Retire as quickly as possible. You have to admire their 'spin' though, "15 major recommendations that would give individual troops far more control over shaping and managing their own retirement packages." I can sum this is one sentence. The military wants to cut your retirement payments as much as possible.

Response by SPC Angel Mazon made Jan 30 at 2015 1:37 PM

SPC Angel Mazon — Fri, 30 Jan 2015 13:37:03 -0500

This chart assumes far too much. I've never seen such an incredible interest rate with TSP except for those plans with the highest risk of loss on ROI. Essentially they want you to gamble 3%of your base pay every 1st and 15th and hope that it pays off. I'm working in the civilian sector and have to contribute to a 401k plan now, it really is a risk. There is no guarantee that after 20-40 years you'll still have what you put into it, since it depends entirely on the market you choose to invest in (or the one they choose for you). Also the assumption of reaching E-7 might be possible for those in the Active components after 20 years, but what of Reservists. I've known several reservists who after 18 years just barely made E-6. E-7 may not be achievable because of the very obscure way that the reserve and national guard slot promotions, and how limited they really are.

Response by SMSgt Private RallyPoint Member made Jan 30 at 2015 1:44 PM

SMSgt Private RallyPoint Member — Fri, 30 Jan 2015 13:44:08 -0500

Interesting how this was worked in "eliminating Tricare coverage and moving millions of military dependents and retirees into health care policies similar to those offered to federal civilian workers." Since this year I had to say on my taxes that I received health care...I think the medical care changes will happen much faster and have a bigger impact on those currently serving that the retirement plan changes.

Response by CPT Jack Durish made Jan 30 at 2015 2:09 PM

CPT Jack Durish — Fri, 30 Jan 2015 14:09:49 -0500

Let's be honest. This is pure political theater and the military will take the pratfall for the amusement of those who sell their votes in exchange for lucrative entitlement programs.

The total of all service members as well as veterans represent too small a voting block to make Congress and the Administration feel any pain for reducing out pay. It's a simple as that. If they were to propose cutting the myriad of welfare programs to balance the budget, there would be shockwaves on election day.

Response by LTC David S. Chang, ChFC®, CLU® made Jan 30 at 2015 2:58 PM

LTC David S. Chang, ChFC®, CLU® — Fri, 30 Jan 2015 14:58:07 -0500

I have been in finance for years. The issue with some of the assumptions they make are that 2008 won't happen again, soldiers will not use their TSP, will contribute, investment returns will be steady etc.

I have several hundred clients and we have created a retirement plan that also follows the same assumptions. But the biggest difference is the job. Being in the military is a high stress, high danger, and potentially life-threatening position.

I am ok with phasing it in, because I do agree we need to do something. Good that they will grandfather people in. I am just afraid some good soldiers will not stay in the future if they can get something better elsewhere.

Response by MAJ Private RallyPoint Member made Jan 30 at 2015 3:30 PM

MAJ Private RallyPoint Member — Fri, 30 Jan 2015 15:30:18 -0500

I like the flexibility and control this plan offers. You do give up some security (who doesn't like a guaranteed check for life?), but with intelligent investment decisions the risk isn't terribly great, and the potential rewards are significantly greater than with the flat pension plan.

That being said, if the Army is going to move to something like this, they absolutely must provide financial classes to the troops on how to manage their retirement accounts and how to invest intelligently. Otherwise there is too great a risk of the troops losing their shirts and being left with no retirement at all, as has happened on the civilian side too often in the last few decades.

Response by MSG Mitch Dowler made Jan 30 at 2015 3:57 PM

MSG Mitch Dowler — Fri, 30 Jan 2015 15:57:29 -0500

What a bunch of crap! The current plan includes the TSP which has been left off of here and the opportunity to have an IRA. The government TSP contributions would depend on matching of soldier contributions which many will not do. Bottom line this a plan for big cuts to military retirement and health care. It also treats service members unequally by the their MOS. This is the product of the worst CIC in our history who despises the military serving under him. The CIC's big problem with the military is that inconvenient oath to "solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same". This CIC only wants the second half of the oath in place to Americans into subjects instead of Citizens.

Response by SSG Private RallyPoint Member made Jan 30 at 2015 4:16 PM

SSG Private RallyPoint Member — Fri, 30 Jan 2015 16:16:53 -0500

As long as they grandfather those who came in under the assumption that we were receiving retirements, then honestly i don't care. the problem is that from what i have read they are changing it for everyone. At 11 years in now it seems kind of unfair for those of us who have sacrificed so much already to be robbed of our retirement. Reminds me of the tattoo policy that they later had to fix to grandfather those of us that had tattoos before regulation changed. Good Job congress, are you planning on screwing us anymore this year?

Response by SFC Nikhil Kumra made Jan 30 at 2015 4:22 PM

SFC Nikhil Kumra — Fri, 30 Jan 2015 16:22:10 -0500

Doesn't sound bad on the surface at all... Still pretty awesome compared to anything in the civilian world - there is no pension there.. I don't see what's wrong with having service members contribute to their own retirement. It only makes sense.

Response by LCDR Rabbah Rona Matlow made Jan 30 at 2015 5:05 PM

LCDR Rabbah Rona Matlow — Fri, 30 Jan 2015 17:05:46 -0500

RE the idea of eliminating the defined benefit pension - how many Active Duty troops are on Food Stamps already? We have a cut in base pay (based on purchasing power effects from inflation coupled with a shredded COLA), cut in VHA, and increases in Tricare pharmacy co-pays.

How many more are we going to put on Food Stamps while on A/D? And we want these people, who already can't afford to put food on the table, to pay for their pensions??? Outrageous!!!

RE Eliminating Tricare and switching to Federal Employee Health Plans - they can pay $1000 a month or more, depending on the plan, coverage, etc. Do we want to start paying that much? Where is the money supposed to come from?

This is a typical Democrat President action - over-use and abuse the military, and at the same time, look for every way to screw them financially. GOP Presidents keep us at high op-tempos, but at least we get paid for it...

I agree with the idea of making Congress first cut their own pay, benefits and pensions before they go after ours. I also think that every SES, GM and other special high pay appointed or elected "leader" in this country needs to have theirs cut first.

Military compensation should be the LAST thing that is cut, but unfortunately, our country is run by CORRUPT people who don't get it...

VOTE OUT EVERY INCUMBENT!!!!

Response by CPT Private RallyPoint Member made Jan 30 at 2015 7:31 PM

CPT Private RallyPoint Member — Fri, 30 Jan 2015 19:31:10 -0500

BLUF: This briefs well, it's another political agenda created by the democrats to screw the military over while they keep their pensions, pay and benefits intact.

Response by SSG Private RallyPoint Member made Jan 30 at 2015 7:36 PM

SSG Private RallyPoint Member — Fri, 30 Jan 2015 19:36:56 -0500

I congress Would have to follow the same plan You bet you 4th point of contact this Fubar would NEVER PASS. One term they're set for life. Two tour and I'm put on the terrorist watch list.

Response by 1LT(P) Private RallyPoint Member made Jan 30 at 2015 7:38 PM

1LT(P) Private RallyPoint Member — Fri, 30 Jan 2015 19:38:17 -0500

Let me respond with two questions to ponder:

1) How many of you had young Soldiers in your unit that blew $40k on a new truck before they turned 20?

2) How much better off would that Soldier be if he was given an incentive to invest that money and save for his family's future?

3% is not a huge amount, and there is massive value in teaching a teenager the power of investments and savings.

Response by SSgt Private RallyPoint Member made Jan 30 at 2015 10:14 PM

SSgt Private RallyPoint Member — Fri, 30 Jan 2015 22:14:46 -0500

CINCMAC and the 86th TFW Commanders thanked me personally for a weather forecast and review which said I had one of the best weather reviews that they ever saw in their recent memory. That is my reward.

Response by SFC Private RallyPoint Member made Jan 30 at 2015 11:24 PM

SFC Private RallyPoint Member — Fri, 30 Jan 2015 23:24:59 -0500

If you like your retirement plan, You can keep your retirement plan. We just need to pass it so that we can find out whats really inside.

Just like the CSM said I think we need to fly the BS flag here. I am a financial guy and I am having issues with this stuff. The intent is to forcible require military members to save for retirement when better education on how the current system(TSP) works. It has been almost impossible in the last several years to have a return as described by having your money in (G) fund. I am part of the 33% return club and it has been a hustle the last three years to get and hold on to that.
I see the 1% part of this budget and the 1% of Americans that actually serve in the armed forces to both see a sharp decline! One of the reasons that military members stay in for the long haul after the pride, sense of adventure & self worth to country and corp is a decent retirement and the goal of 20 years of service!
Just one more sacrifice so that we can have a completely free military and to give nothing to those who served, but everything to those who don't serve or work!

Response by LTC Private RallyPoint Member made Jan 30 at 2015 11:31 PM

LTC Private RallyPoint Member — Fri, 30 Jan 2015 23:31:32 -0500

Heard this before and will not believe it until I hear that it passes the House and up to the Senate.....I would like to see a grandfather clause in there as I hit 10 years this May (8 years of active time).

Response by MAJ Raúl Rovira made Jan 31 at 2015 12:26 AM

MAJ Raúl Rovira — Sat, 31 Jan 2015 00:26:11 -0500

Lets see, the government is hastily changing healthcare for the nation, messing up education (common core), If I recall the failed NSPS (Not Sure Pay System) where GS civilians were pay-banded, downsizing the military based on a political-budget-childish issue during a terrible time in the world.

I tell you what government, give me the cash and I'll invest it appropriately. Its my (and my family's) future anyways. I don't trust my retirement to a government that can't figure out how to get out of dept. So give me my money and I'll handle it myself for you :) That is one less veteran citizen to worry about.

Now I wish this was a PowerPoint to say "Next Slide"

Response by Maj Walter Kilar made Jan 31 at 2015 12:35 AM

Maj Walter Kilar — Sat, 31 Jan 2015 00:35:22 -0500

It is a new, Government-sponsored plan to improve upon an old, Government-sponsored plan. What could possibly go wrong?

Response by SPC Stewart Smith made Jan 31 at 2015 12:44 AM

SPC Stewart Smith — Sat, 31 Jan 2015 00:44:40 -0500

Matching up to 5% base pay is an awesome employer contribution to a 401K.

With that said, the military gets many of it's career troops BECAUSE the current retirement is so good. There is no way to spin this plan to make it sound better.

Seems like they are doing what they did with the GI bill. Get troops to continue $100 a month for a year knowing full well that the majority of them never use it.

Response by SFC Steven Harvey made Jan 31 at 2015 9:25 AM

SFC Steven Harvey — Sat, 31 Jan 2015 09:25:55 -0500

I'm fine with it so long as current service members are grandfathered in.

If a new generation of Soldiers join knowing the status of their retirement benefits that's their choice to make.

Retention will be hurt but with the draw downs just escalating further with more and more troops being forced out the percentages are going to lower.

Assuming we go back to a 90s level military you'd have to be in for a considerable amount of time to become a SGM, CW5 or GEN. Meaning you'd have to stay on longer than 20 to get past SFC if that.

The times of folks joining and making those ranks quickly will probably be long gone by the time this has taken affect.

Response by SFC Private RallyPoint Member made Jan 31 at 2015 9:52 AM

SFC Private RallyPoint Member — Sat, 31 Jan 2015 09:52:01 -0500

I think you should be able to choose your retirement as opposed to having tsp forced on us. I know guys that were still making money or at least not losing any with usaa while I was losing 5k from tsp. either way it's all a crap shoot. As long as I still get my 50% at 20 I'll be happy. With 8 years left its a little late to start matching my contributions.

Response by SFC Jason Porter made Jan 31 at 2015 10:01 AM

SFC Jason Porter — Sat, 31 Jan 2015 10:01:53 -0500

They have been talking about this for a few yrs every year this comes up. Army times had and article about it back 2007.

Response by CSM Private RallyPoint Member made Jan 31 at 2015 10:48 AM

CSM Private RallyPoint Member — Sat, 31 Jan 2015 10:48:14 -0500

When I got in the only person you wanted to look up and punch in the face after being in a while was the recruiter. Imagine the poor smuck who uses inflated presentations to advise service members on their retirement money only to have the accounts fall way short - hope they get hazardous duty pay.

Response by SFC Private RallyPoint Member made Jan 31 at 2015 11:15 AM

SFC Private RallyPoint Member — Sat, 31 Jan 2015 11:15:31 -0500

It's not the worst plan ever. There are a lot of assumptions and best case senerios. It gets the conversation started.
Before any changes are made they should poll the Soldiers, Sailors, Airmen, Marines, and Coast Guard that will be affected by the changes. Not just a unit or post, ALL OF US. Give everyone the chance to see what the new system looks like, then make suggestions, ask questions, and learn what it is. Not everyone will take a poll seriously but if Congress is voting on our benefits without knowing anything other than numbers on paper, they will not vote in our favor.
The one part that I have a major problem with is eliminating Tricare. I agree that that will save the Government a lot of money. But it will cost the Soldiers a lot more. Even if the allowances they mention are put in place. If the allowances are enough to make a difference, it will cost more than Tricare. If they are going to do anything with it they should consider implementing a system like Tricare Reserve Select. The Soldier pays a monthly premium, but its less than half of the Federal Employee Health Care plans. There would still be more out of pocket for the Soldier, but to the point that they no longer have anything in their pocket.
Change has to happen, I understand that and I am not opposed to helping the "greater good" as long as the "greater" gets to decide what is good.
If they really want to cut the DOD budget, use servicemembers instead of contractors. If the contract companies pay their employees $120k, how much do think we are paying them. I realize there is a place for them but what makes the contractor worth $120k and an E4 doing the same job only worth 30k? Perhaps that is a different thread.

Response by CPT Private RallyPoint Member made Jan 31 at 2015 11:40 AM

CPT Private RallyPoint Member — Sat, 31 Jan 2015 11:40:06 -0500

There is nothing wrong with looking at new ideas for our retirement. However, when Congress is involved in giving you something 'better,' it is always a good idea to keep your hand on your wallet. The commission is supposed to find ways of saving the government money . . . not us.

We should also look to see how this will effect force size. The last time the government messed with our retirement Clinton was in office, and there was a mass exodus in E6 and O3s. The change in retirement benefits was one of the reasons for departure (I was one of them). Simplicity in management should also be a factor. The more 'options' the more civilians will have to be kept around to keep the paperwork straight (another waste of money).

The reaction to the plan by federal employee unions is another indicator of it being a 'good deal.' Federal employee unions are notoriously covetous of military benefits and do not think we should have better benefits than they do.

Separating benefits by job does seem to be a fair. However, it would be deleterious to good order and discipline because it would create envy and ill will between team members.

Response by SSG Private RallyPoint Member made Jan 31 at 2015 2:04 PM

SSG Private RallyPoint Member — Sat, 31 Jan 2015 14:04:40 -0500

Any one that has a retirement check coming to their mailbox should jump up and down with FRKN JOY . I spent 21 years chasing that dream and got nothing a big fat ( 0 ) nada squata .I pay master of 3 differant units screwed me of day I worked active duty and did not give me a good year for pay . I volinteered for active duty so many times I can't remember how many times but the VA told me if I show up at their facility I would get a big Bill in the mail. No help for me and no retirement either. The US government can piss off. they are just wasting money because they can.

Response by SGT Steven Eugene Kuhn MBA made Jan 31 at 2015 3:17 PM

SGT Steven Eugene Kuhn MBA — Sat, 31 Jan 2015 15:17:11 -0500

A 401K alternative be something good for those who do not retire, otherwise if the 401K is not a comparable option for retirement pay in my opinion.

Response by SGT Private RallyPoint Member made Jan 31 at 2015 6:19 PM

SGT Private RallyPoint Member — Sat, 31 Jan 2015 18:19:52 -0500

NOt a fan of the changes i do encourage the use of TSP but thats a personal decision. I think after 20 years active duty automatic retirement, 30 years reserve component both should get there retirement.

Response by 1SG Private RallyPoint Member made Feb 1 at 2015 12:51 PM

1SG Private RallyPoint Member — Sun, 01 Feb 2015 12:51:21 -0500

Did you know that the 401(k) was originally anti-CEO legislation?

The original purpose was to limit executives at some companies from having too much access to the perks of cash-deferred plans. Had nothing at all to do with retirement and was never meant to be widespread.

401(k) for retirement can work well. So long as you never encounter a down market. If that happens you have to be on top of your plan, and move your allocations to whatever capital preservation fund may exist in your plan--if bonds are available that can be a good option.

And as you age, you should be moving a greater proportion of your balance to capital preservation--adjust for the mount of risk you are willing to accept.

The reality, though, is that most people treat the 401(k) as a set it and forget it deal. You just can't.

Response by CPT Private RallyPoint Member made Feb 1 at 2015 7:15 PM

CPT Private RallyPoint Member — Sun, 01 Feb 2015 19:15:17 -0500

The government matching contributions to a % is attractive. It rewards those who are saving versus everyone pulling the same benefits. Granted only one aspect of the plan, but this is one area where I do wish we resembled our DAC-counterparts.

Response by LTC Jason Mackay made Feb 1 at 2015 11:02 PM

LTC Jason Mackay — Sun, 01 Feb 2015 23:02:16 -0500

I would honestly need to run the side by side net present value , see the assumptions, and see what they used for interest rates, but my main objection is being held hostage until she 60. This is a huge detriment to those transitioning from AD

Response by MSG Robert Mills made Feb 1 at 2015 11:29 PM

MSG Robert Mills — Sun, 01 Feb 2015 23:29:20 -0500

This is a "load" a big green weeney if you will, this is almost laughable in many respects. They make this big ordeal about the "grandfathering of current soldiers and retirees" this is a buy out plain and simple, and worse yet a sell out. It does affect retirees and current soldiers. I remember when they came out with that 15 year bonus REDUX or whatever it was at your 15 year mark and we had to do those idiotic breafings hey take this 30,000 now get taxed on it as well, then take a 10 percent reduction in retirement pay, so any smart person that could add or subtract looked at the percentages and realized hey Im losing a signifigant amount of money in this deal. This is no different. Retirees or career soldiers have already taken one mismanaged health care system, changed it in the mid 90s to TRICARE, and now tudaaaa they want to change it again, Id like to know exactly what the differences are of what they are proposing as I know very little about the federal health care system for federal employees. Now TRICARE well whatever care says oh well were redistricting our areas or maps and if you live outside of a certain area well now you cant even get the TRICARE PRIME that you were told that you could get even if you are willing to pay the cost of it, your just STANDARD sorry for your luck. well its my opinion that thats a bunch of BS as I remember the our president ""If you like the plan you have, you can keep it. If you like the doctor you have, you can keep your doctor, too. The only change you’ll see are falling costs as our reforms take hold." Ok now someone please tell me how moving retirees and dependants into a different system yet again is keeping benefits I see this as a breach of contract actually from the original system that was afforded to me when I first came into the military, now that your at the end of the road they want to stop putting gravel down. This is nothing but a bunch of crap and I say no thank you to every last bit of the proposed ideas and hope it dies a grusome death in Congress, and for those soldiers that think that they are in or grandfathered well guess what dont believe a second of it because they will pull the bait and switch on you in a second and try to convince everyone that 17% of the 1% of people that serve and retire is costing to much money for them. Thats a lie, and the math doesnt support it. Im not even sure why the military uses contracts anymore as they can seem to weasle out of thier part of it any time they like, its a one sided deal, no benefit for service men and woman at all to even propose this is a waste of money just for the study. I encorage everyone to make it known to that Congressman/Woman that they need to stop with pulling tricks on the soldiers, retirees and serveice people, just give us what you said you would because we have already fullfilled our part of the bargin in the "Contract" now fullfill yours.

Response by CPO Ed Ball made Feb 2 at 2015 8:51 AM

CPO Ed Ball — Mon, 02 Feb 2015 08:51:24 -0500

Terrible move! DOD has been attempting for years to get out from under their obligation to the troops for retirement and healthcare. For the majority of us, this is the reason we obligated ourselves to a 20 year plus career. We've earned it, they said they'd give it to us all those years, it's time to hold them accountable, unfortunately year after year we keep having to defend our retirement benefits.

401K - Worst investment tool/scheme ever!! Our Ohio PERS 457K just like a 401K is only up 11.75% since Oct 2007 prior to our last recession where I rolled everything into a money stable fund and Pimco bonds to retain my principal investment instead of losing over 50% like everyone else did that did nothing prior to the recession. That percentage is eaten away by inflation! You lose. Keep in mind if you lose 50% you need a 100% gain to break even.

I would recommend a broker account such as TDAmeritrade or the likes and create your own portfolio that you can control. Heavily recommend Champion paying dividend stocks that have paid and raised their dividends the last 25 years. You can find them at the DRIP Investing Resource Center for free on a spreadsheet.

Roth IRAs are the way to go to save on capital gains tax rates.

Just remember if it sounds too good to be true, it normally is. I don't trust the government, you need only look at Congressional Financial Disclosure Reports and find they won't be in a 401K. They have more lucrative investments elsewhere. So ask yourself why?

Response by MAJ Private RallyPoint Member made Feb 2 at 2015 8:58 AM

MAJ Private RallyPoint Member — Mon, 02 Feb 2015 08:58:04 -0500

Not bad options for our new generation of service members, but not my preferred options. Now, we need to look at revising our up or out promotion system.

Response by SSgt Robert Clark made Feb 6 at 2015 10:56 PM

SSgt Robert Clark — Fri, 06 Feb 2015 22:56:44 -0500

Yet another example of trying to make the military a corporation. Leave the pension as it currently is or else the military will suffer.

Response by SFC Private RallyPoint Member made Feb 7 at 2015 12:33 AM

SFC Private RallyPoint Member — Sat, 07 Feb 2015 00:33:25 -0500

I'm just a ground pounder but... These changes are being brought up to lower defense spending, yeah? To me it makes sense that any suggestion would in the long run be more fiscally responsible for the government. My thought is how can a new proposed retirement plan under these constraints be better than the old model if trying to reduce costs. Also, you could take all of DoD budget for the next 10 years and still not balance America's debt... I think it's time for politicians to stop going for the sensational targets and start getting realistic. I'm willing to give personal sacrifices for the betterment of America but this ain't fixing shit. That's all.

Response by SPC(P) Carlos Santini made Feb 7 at 2015 12:46 AM

SPC(P) Carlos Santini — Sat, 07 Feb 2015 00:46:49 -0500

On paper it looks good but congress and our senate will try to change it some how or way.

Response by CPT Private RallyPoint Member made Feb 19 at 2015 12:10 PM

CPT Private RallyPoint Member — Thu, 19 Feb 2015 12:10:53 -0500

I'm curious how many of the officers on this panel fall under the 2007 Defense Authorization Act, allowing them to have their pensions increased up to 63% beyond their preretirement wage?

http://usatoday30.usatoday.com/news/military/story/2012-01-26/military-officers-pensions/52939598/1

While we can certainly entertain a discussion on cutting benefits, I think it would have more credibility if it were comprised of active duty personnel, to include senior Officers and Enlisted. I would even be in favor of putting Commanders and 1SGs on this board...people with real authority and responsibility for Soldiers at the ground level. They have their fingers on the pulse of this organization and can speak for the majority of uniformed personnel far better than any group of retired GOs.

Some top military brass making more in pension than pay

A federal law change allows top generals and admirals to make more in retirement than they did on active duty.

Response by SMSgt Bryan Raines made Feb 19 at 2015 3:12 PM

SMSgt Bryan Raines — Thu, 19 Feb 2015 15:12:22 -0500

How many of you active duty know that your "retirement" is considered by the bean counters as retainer fee until you reach age 62? Yes, if you retire at 20 years of service or more you are on inactive reserve and can be called up on active duty at any time until you reach the mandatory high age for recall (I think that 62 is the oldest you can be and still called back up on active duty). Inactive Reserve Retirees in certain specialties were called up during Desert Storm. Two of my former supervisors who had retired were among those called up. My Navy buddies tell me that they are told that it is not retirement until they reach 62. So if they are going to play around with the retirement are they going to do away with the inactive reserve commitment for retirees?

Response by LTC John Shaw made Mar 31 at 2015 12:34 PM

LTC John Shaw — Tue, 31 Mar 2015 12:34:44 -0400

I was not around to be asked about the changes in 1980 and 1986 that reduced pension benefits, so at least we get to chance to be in the conversation. :)

I like the idea of the modernization better than the 20 year cliff. You can set a date and start applying to to anyone new in the system. I believe it should be grandfathered for anyone with more than 1 year of service or more in the active or reserve service with a 'catch up' provision based on number of years, rank and time in rank.

I have saved via a 401k for 28 years and believe this approach is better than a pension that may completely fail by the time I get to draw on it at 60 years old.

Response by SMSgt Private RallyPoint Member made Mar 31 at 2015 1:42 PM

SMSgt Private RallyPoint Member — Tue, 31 Mar 2015 13:42:01 -0400

Said it before and I'll say it again, Air Force Sergeants Association lobbies on behalf of all enlisted members for this kind of thing. Membership is open to everyone and currently at $25 for 5 years (cyber membership). That pays for 4 lobbyist to work on keeping our current benefits and ensuring we are protected in the future.

http://www.hqafsa.org/

Air Force Sergeants Association

Home of Air Force Sergeants Association

Response by CPT George Stotz made Mar 31 at 2015 2:52 PM

CPT George Stotz — Tue, 31 Mar 2015 14:52:12 -0400

This presupposes that the participants will be disciplined in their investment strategy and not use the money for short term financial wants and needs. From my previous experience working with younger investors, I've found that many, though not all, will squander the money for immediate needs rather that future benefits. My second thought is will they receive sound financial planning advice from the plan managers? I am cautiously skeptical.

Response by SFC Private RallyPoint Member made Mar 31 at 2015 7:36 PM

SFC Private RallyPoint Member — Tue, 31 Mar 2015 19:36:32 -0400

The most significant issue I have here is... where is the savings? The 20 year retirement law requires 20 years AFS. So, if we are making contributions from the get go, we are spending a whole lot more money on SM's who are only doing one or two enlistments... I don't really see savings here unless their is still a 20 year requirement to go with this. Also a 7.3% return in alot of cases is wishful thinking.

Response by Lt Col Private RallyPoint Member made Mar 31 at 2015 9:12 PM

Lt Col Private RallyPoint Member — Tue, 31 Mar 2015 21:12:26 -0400

I think it's a fair plan and the current military pay system is unsustainable so something has to be done. I'm a GS civilian in my day job and I manage fine with subsidized civilian health insurance and 5% matched TSP for retirement (I will get a very small pension as well).

Response by SGM Mikel Dawson made Mar 31 at 2015 9:32 PM

SGM Mikel Dawson — Tue, 31 Mar 2015 21:32:15 -0400

I'm old and this don't effect me but questons?
1. Aren't 401Ks stock investment programs?

2. If so does the service member have the choice of how to invest the money they are putting into the program?

3. Is it a guaranteed investment return program?

4. What happens when the economy goes south, 401Ks pop like they did before, does the service member still get the prescribed amount?

Response by SGM Mikel Dawson made Mar 31 at 2015 9:42 PM

SGM Mikel Dawson — Tue, 31 Mar 2015 21:42:05 -0400

"A BIRD IN THE HAND IS BETTER THAN TWO IN THE BUSH" I won't take credit for this saying, way older than me, but still true.

Response by SFC Private RallyPoint Member made Mar 31 at 2015 10:16 PM

SFC Private RallyPoint Member — Tue, 31 Mar 2015 22:16:35 -0400

They would only to do this for one reason….. to save the government money…… where do you think that is going to come from, there is no way they are looking to benefit military members.

Response by CAPT Kevin B. made Mar 31 at 2015 10:44 PM

CAPT Kevin B. — Tue, 31 Mar 2015 22:44:21 -0400

In general, the purpose of revamping anything is to reduce cost, hence the level of fixed costs such as retirement outlays. I haven't seen any new program be an improvement to the service member. I used the old GI Bill which the one now is a shell of what it used to be. One thing I'd add is regardless of what the retirement result is, you'll need other streams of money because the old rule of paying off all your bills and figuring out how to live on 40% of your salary doesn't cut it if you want to do something other than stay in a tiny home and knit. Retirees want to travel, enjoy new experiences, play sports, etc. And we live longer (I hope to). If you can manage 10% going into TSP, I'd recommend it. 5% for sure as you make 100% profit on the contribution right up front and it continues to grow.

Plan on a second career which has retirement included. Most commercial sector companies have 401 but you can also look at local, state, and federal work which have both a fixed annuity and a 401. Bottom line, my recommendation is to set a goal wherein you'll quit and not notice much difference in pay. That means diligence on putting money into something all the time and not delaying. Take a look at pulling all your TSP or 401s at age 59 1/2 and having it managed by one of the financial houses. TSP has around 35 combinations. Commercial management has thousands of mix and match configurations. I've been seeing 2-5 percent better performance than TSP at the same conservative risk level i.e. pretty close to G Fund. Bonus points for delaying Social Security at that is making you 7-8% more a year. Develop a burn plan of your TSP/401 so you don't get burned at 70 1/2 with tax gouges due to mandatory distribution. You can defer Social Security so that takes more of the load up at 70.

Finally, get your medical record in shape and apply for VA benefits right when you punch out so you don't lose money just because of when your start date is.

Response by SGT Mark Sullivan made Mar 31 at 2015 11:38 PM

SGT Mark Sullivan — Tue, 31 Mar 2015 23:38:17 -0400

Just more head games to appease the bean counters and morons in DC. Get these bums out of office. They have fucked up more shit, than they have resolved.

Response by SFC Kenneth Hunnell made Apr 1 at 2015 2:35 PM

SFC Kenneth Hunnell — Wed, 01 Apr 2015 14:35:37 -0400

As far as the 401k retirement plan goes. I believe it is like betting against the house. We all know who the winner ultimately is. Now the politicians are betting on the economy to take the money and win or loose our retirement.
One may argue the money one may receive. You can also loose it all in one black monday. Then what, all you will get is I am sorry. I say never bet on anything that is not better than 50/50 shot of getting out with your shirt

Response by PO1 Glenn Boucher made Apr 1 at 2015 4:02 PM

PO1 Glenn Boucher — Wed, 01 Apr 2015 16:02:51 -0400

First and foremost, Congress and the Senate need to revamp their pay and benefits before even thinking of looking at how to "fix" military pay, benefits and retirement.
These clowns cannot perform their jobs without some type of childish behavior as a result.
If they could manage to fix their own mess in the next 20 years then they can think about fixing military fiscal issues.

Response by MAJ Robert (Bob) Petrarca made Apr 1 at 2015 8:13 PM

MAJ Robert (Bob) Petrarca — Wed, 01 Apr 2015 20:13:08 -0400

Voters shrink congressional pay and benefits - wouldn't that be a headline!!

Response by SSG Andrew Neeb made Apr 2 at 2015 5:37 AM

SSG Andrew Neeb — Thu, 02 Apr 2015 05:37:30 -0400

If they want to save money, then they need to target the defense acquisition process. That is where most of the DOD budget is wasted.

The people are the Armed Forces most important asset, leave them alone!

Response by COL Mikel J. Burroughs made Apr 22 at 2015 1:20 PM

COL Mikel J. Burroughs — Wed, 22 Apr 2015 13:20:57 -0400

I apologize in advance, but I didn't see anything mentioned about reserve retirement changes in the pension or healthcare coverage. Did I miss it or are there changes coming for those of us that have served over 37 years active duty, guard, and reserve that are waiting to receive our retirement and benefits at age 60? If any of you out there on RallyPoint have information regarding that please let me know? Thanks

Response by MAJ Ken Landgren made Apr 22 at 2015 1:31 PM

MAJ Ken Landgren — Wed, 22 Apr 2015 13:31:33 -0400

It does not take a mental giant to figure out the wording of offering more at a savings to the government are diametrically opposing goals. The 401k is subject to market risks and gains, and withdrawals are subject penalties and taxes in your 50s. It's too cumbersome to explain it all.

Response by MSG Private RallyPoint Member made Apr 22 at 2015 3:56 PM

MSG Private RallyPoint Member — Wed, 22 Apr 2015 15:56:45 -0400

"One stunning feature of the new proposal is to give individual troops the option to forgo immediate monthly retirement checks and instead receive a lump-sum payment for the total value of their working-age retirement benefit between the time they leave service and the time they become eligible for their normal Social Security benefits, usually starting at age 67."

Is this the $201,000 number? Because that is NOT the value of my working age retirement. If I retired at 38, and received $2207 (2015 retirement) per month.... that's $26,484 a year. For 29 years, that's a current value of $768,036 before taxes.

Response by MSG Private RallyPoint Member made Apr 22 at 2015 4:10 PM

MSG Private RallyPoint Member — Wed, 22 Apr 2015 16:10:08 -0400

I love their math. If only they could do our taxes for us. How about this?' You let us choose which plan we want. Also, let us revamp your pay and benefits. Finally, let us approve your TDY and funding. I'm sure when making cuts, congress will never vote against their cuts. So we should be the approval authority for them as they are for us.

Response by SFC Mark Merino made Apr 22 at 2015 4:14 PM

SFC Mark Merino — Wed, 22 Apr 2015 16:14:18 -0400

This is a great money saving idea for the head table. Screw over the very people who dedicated their life defending our country. This way, you won't get Senators and Congressmen pissy with their constituents and since our voice apparently means so very little, this should get pushed right through. Well done, and if anyone has anything bad to say about it to the media, we will court-martial you. This plan can't miss!

I beg you to laugh at this proposal. It is the CSB (career status bonus) on crack! What is the game plan for the scores of dependants who will see that pile of cash and decide it is time to leave the service member high and dry? We don't all have picturesque marriages. What are the safeguards for the retirees, children, etc?

Response by SGT Jeremiah B. made Apr 22 at 2015 6:18 PM

SGT Jeremiah B. — Wed, 22 Apr 2015 18:18:11 -0400

If it wasn't going to work in the government's favor, they wouldn't be proposing it. Overall, they're out less, off the hook with regards to retirement commitments and you absorb an enormous amount of risk. If you know what you're doing, that could be a better deal in the long run, but you lose 40 years of security.

Who's lobbying for this change behind the scenes and what do they stand to gain?

Response by A1C Dennis Schroader made Apr 22 at 2015 6:44 PM

A1C Dennis Schroader — Wed, 22 Apr 2015 18:44:05 -0400

I don't think this is necessarily a bad idea, as long as it would only be implemented for service members entering after this new plan goes into effect, and so long as retiree medical (and base access/other incidental benefits) doesn't change. The long term effect seems to be in the veteran's favor while saving the government some money at the same time. Of course, these are government numbers, so I'd like to see an independent analysis. On it's face, though, it seems like a workable deal.

Response by CPT Jason Torpy made Apr 22 at 2015 9:11 PM

CPT Jason Torpy — Wed, 22 Apr 2015 21:11:03 -0400

This is an important change. "defined benefit" retirement plans aka pensions are bad business. It's just not right to have an employer still owe money to an employee when they aren't still employees. It reliably fails by dragging down the company which then can't pay the employees. To be fair, the government doesn't go out of business so it's a better bet but it still creates significant debt issues by pushing liabilities to employees into the future.
Better to create a defined-contribution retirement plan like a 401k so troops and leaders and congressional budget-makers will know what troop compensation is in the present time, not push things in the future.

Response by SSG Trevor S. made Apr 22 at 2015 11:36 PM

SSG Trevor S. — Wed, 22 Apr 2015 23:36:08 -0400

If more people retire, won't that actually increase the overall cost of retirement to the military? This looks like the only effect will be to drop future retiree's actual income instead of saving any money for DoD. This is change for change sake and it stinks to high Heaven.

Response by COL Charles Williams made Apr 22 at 2015 11:43 PM

COL Charles Williams — Wed, 22 Apr 2015 23:43:23 -0400

I agree with, see, and double down the BS flag the CSM Private RallyPoint Member threw. He analyzed the data very well.

I recommend we have a military panel review the benefits and retirement packages of the Congress and the Senate, and see what savings we can realize there.

I am frankly tired of the military being the continuous discretionary spending target. But, I understand how this all works, and we get the military we want to afford.

That said, I fully understand the need to make things sustainable.

Response by SFC Michael Jackson, MBA made Apr 23 at 2015 12:16 AM

SFC Michael Jackson, MBA — Thu, 23 Apr 2015 00:16:24 -0400

Take it as a warning. If you haven't already. It's time to get your financial house in order and plan for your own retirement. Fully fund your own personal IRAs and create your own financial security!

Response by SSgt Robert Clark made Apr 23 at 2015 12:42 AM

SSgt Robert Clark — Thu, 23 Apr 2015 00:42:35 -0400

From my long removed, from the outside looking in viewpoint, this looks and sounds like nothing more than further "corporatization" of the U.S. military based on a bunch of flawed assumptions and bean counter smoke and mirrors. I feel for the service members nowadays, for the life of me I can't understand why anyone would actually want to go in the military. Things were getting bad enough when I separated and from everything I read it has gotten much worse.

Response by MSgt Private RallyPoint Member made Apr 23 at 2015 11:37 AM

MSgt Private RallyPoint Member — Thu, 23 Apr 2015 11:37:27 -0400

Its time for reform.....we no longer live in a country where 20 year military service should be required for benefits.

We are rapidly approaching a time when all of our members will have only served during period of war.

It pains me to see 8-12 year members leave the service because "they can't take another deployment" and walk away with nothing.....but a hand shake and if they are unlucky some sort of disability (yes i said unlucky i'd rather have my health).

Not sure what the answer it but this one does not look to bad if you get past the emotions and preconceived conceptions folks have.

Hell I wish that had made TSP required when I was in and matched it....then I would not be sitting around waiting to play catch up with my 401Ks when I turn 50.

Anyway peace, love, and democracy to all.

Response by CPO Private RallyPoint Member made Apr 23 at 2015 8:57 PM

CPO Private RallyPoint Member — Thu, 23 Apr 2015 20:57:25 -0400

You really want to see how bad military members gets screwed on retirement read the Retirement Benefits for Members of Congress. Oh! By the way they can vote themselves a pay raise, I wish we had that option.

http://www.senate.gov/CRSReports/crs-publish.cfm?pid=%270E%2C*PLC8%22%40%20%20%0A

U.S. Senate: Contacting The Senate > search

Response by MSgt Private RallyPoint Member made Apr 24 at 2015 11:32 AM

MSgt Private RallyPoint Member — Fri, 24 Apr 2015 11:32:44 -0400

Update:

http://militaryadvantage.military.com/2015/04/congress-steps-toward-new-blended-military-retirement/

Congress Steps Toward New 'Blended' Military Retirement

By Tom Philpott Congress on Thursday took a first, perhaps historic step toward phasing out the 20-year-or-bust retirement system the U.S. military has used to shape and retain its career forces si...

Response by MAJ Ken Landgren made Jun 28 at 2015 12:55 PM

MAJ Ken Landgren — Sun, 28 Jun 2015 12:55:14 -0400

And you must be 59 1/2 to touch your 401k.

Response by SFC Joseph Bosley made Jun 29 at 2015 11:01 AM

SFC Joseph Bosley — Mon, 29 Jun 2015 11:01:15 -0400

When do the people get to vote on the pay increases and benefits of our legislators?

Response by LTC Private RallyPoint Member made Jun 29 at 2015 11:38 AM

LTC Private RallyPoint Member — Mon, 29 Jun 2015 11:38:47 -0400

I have my doubts.....the unknown and who knows how the TSP will perform, etc.

Response by MAJ Ken Landgren made Jun 29 at 2015 12:15 PM

MAJ Ken Landgren — Mon, 29 Jun 2015 12:15:57 -0400

What is the % rate of return for the 401k investments?

Response by MAJ Ken Landgren made Jun 29 at 2015 4:51 PM

MAJ Ken Landgren — Mon, 29 Jun 2015 16:51:35 -0400

I assume the 401K is portable?

Response by LT Private RallyPoint Member made Jun 29 at 2015 10:36 PM

LT Private RallyPoint Member — Mon, 29 Jun 2015 22:36:59 -0400

Glad we are grandfathered into the existing program. I see a big issue with trying to recruit kids into a new plan.

Response by MSgt Stephen Council made Jun 30 at 2015 4:53 PM

MSgt Stephen Council — Tue, 30 Jun 2015 16:53:33 -0400

Lets all remember, they NEVER do anything for the men and women of the armed services because it is better for the people serving! The only people our elected leaders seem interested in taking care of by increasing benefits is THEMSELVES!

Response by CW3 Kevin Storm made Aug 20 at 2015 9:09 PM

CW3 Kevin Storm — Thu, 20 Aug 2015 21:09:22 -0400

Being both a reservists with a Thrift Savings Plan, program and a Federal Employee with a TSP (Do you really think Uncle Sam will let that money go outside of there hands?). You can get decent returns in some of the funds and the G fund if I recall is fixed at 4 percent return annually.

Response by SFC Private RallyPoint Member made Aug 20 at 2015 10:41 PM

SFC Private RallyPoint Member — Thu, 20 Aug 2015 22:41:43 -0400

I think Soldiers should have guaranteed benefits for their choice of longevity. Soldiers that make plans for short term service should plan accordingly. Unless they are going to provide, free and mandatory for all service members to ensure they have every opportunity to have a decent yield.

Response by CMSgt James Nolan made Aug 21 at 2015 12:37 AM

CMSgt James Nolan — Fri, 21 Aug 2015 00:37:15 -0400

There are historical data on TSP that are readily available. Why not use that data? Me-thinks me smells something funny......

Response by MAJ Ken Landgren made Aug 21 at 2015 11:46 AM

MAJ Ken Landgren — Fri, 21 Aug 2015 11:46:55 -0400

1. When the government is saving money it is at our expense.
2. I wonder how many will invest the lump some?
3. The only reason TSP is higher is because you have to keep it invested until you are 59 1/2 years.

Response by MAJ Ken Landgren made Aug 21 at 2015 12:48 PM

MAJ Ken Landgren — Fri, 21 Aug 2015 12:48:00 -0400

If anyone wants to know the fundamentals of investing, I can re-post that animal.

Response by SGT Ray Grooms made Aug 22 at 2015 7:38 PM

SGT Ray Grooms — Sat, 22 Aug 2015 19:38:56 -0400

I think this is a great idea! It is about time that we aligned the military more with Federal Civilian employees. Perhaps we could even join the Federal Employee Union. I would love to be there when a SGM tells a SPC to cut the grass and he responds "That's not in my contract. Talk to my shop steward." Strikes for more pay? Sounds good! While we are at it, get rid of uniforms, and PT, and deployments, and boot camp. No other federal employees have to do this, why should we if our retirement will be like theirs. Of course this is not realistic. The military is different than any other job and people who choose to live its hard life are rewarded with a great retirement. Instead of comparing our retirement to others, perhaps we should compare our work to others to show why we deserve a better retirement.

Response by LTC Private RallyPoint Member made Aug 23 at 2015 1:53 AM

LTC Private RallyPoint Member — Sun, 23 Aug 2015 01:53:57 -0400

Boy, after this past weeks bloodbath in the stock market, I could imagine this plan getting less support. Whats interesting some of the vets/military organizations support this plan; some don't. It might work if the soldier is very money/budget literate. Many young soldiers aren't; also when just starting out especially if he/she has dependents, it may difficult to put the money aside. Another thing we need to make sure our Congress members and government realize is 20 years probably yields only less than 40% of your total compensation if you include allowances. In California, police and fire will get 60% of their total compensation at 20 years and 90% at 30 years. (some departments allowed pension-spiking where they would count your overtime in your last year too, although I think they are starting to crack down on that.) So the military does not have the most liberal pension plan.

Response by SFC Dr. Joseph Finck, BS, MA, DSS made Aug 23 at 2015 9:56 AM

SFC Dr. Joseph Finck, BS, MA, DSS — Sun, 23 Aug 2015 09:56:09 -0400

BLUF, this is not good for anyone. Only save a small portion of the budget and has too many assumptions. As a young Marine, someone once told me when you assume you make an ASS of U and ME.

Response by PV2 Glen Lewis made Aug 28 at 2015 2:40 PM

PV2 Glen Lewis — Fri, 28 Aug 2015 14:40:20 -0400

I really don't know how to put this other than the cuts that have already been made since I was in the Army disturb and infuriate me. The price of a serviceman's life just continues to go down; while the benefits of the inept people who make these decisions never seems to lessen and that I really do not understand.

Response by PO1 James McGlone made Aug 30 at 2015 8:43 AM

PO1 James McGlone — Sun, 30 Aug 2015 08:43:03 -0400

I served for nine years and left because submarine service and deployments were hurting my family. When I was hired, I learned what a 401k was and realized I was many years behind others. If you are not going to make the service a career, then the 401k idea makes a great deal of sense. It would be interesting to understand how the government handled matching funds before going all in one the concept. Bottom line, a 401k is independence to make the best decisions for your life and career.

Response by 1SG Private RallyPoint Member made Aug 30 at 2015 9:24 AM

1SG Private RallyPoint Member — Sun, 30 Aug 2015 09:24:32 -0400

I quit tsp contributions when it came out big brother was borrowing against it like they did with social security. I prefer to route it to other avenues.

Response by SSG Robert Spina made Aug 30 at 2015 10:32 AM

SSG Robert Spina — Sun, 30 Aug 2015 10:32:34 -0400

Definitely not it is crazy to even have this disscussion

Response by PO2 Jeffrey Sheibels made Aug 30 at 2015 12:25 PM

PO2 Jeffrey Sheibels — Sun, 30 Aug 2015 12:25:34 -0400

Have they not learned what could happen with 401ks if the economy hits a recession? It is possible to lose 100%of a 401k. They need to keep the pension the way it is and adjust for inflation and increase in cost of living.

On a side note.... They are idiots.

Response by SCPO Private RallyPoint Member made Aug 30 at 2015 6:02 PM

SCPO Private RallyPoint Member — Sun, 30 Aug 2015 18:02:53 -0400

The committee, formed at the direction of Congress via the DOD, and of which a member is an old friend, only made recommendations that they were asked to make. Congress will have the final say-so.

Response by SGT William Howell made Aug 31 at 2015 7:01 AM

SGT William Howell — Mon, 31 Aug 2015 07:01:55 -0400

If they are trying to convince you that this is better for you it has to be bullshit. We are a necessary evil that sucks up money that the government would much rather spend on buying votes for the next election. They are not doing anything to "Help" us only themselves.

Response by CSM Private RallyPoint Member made Aug 31 at 2015 8:32 AM

CSM Private RallyPoint Member — Mon, 31 Aug 2015 08:32:35 -0400

I'm torn on this idea. From a budgetary perspective I think that this idea is effective, although there would need to be significant training and explanation to the younger soldiers on how to do this effectively. I agree with the idea that younger lower enlisted soldiers with kids will find it very difficult to participate. On the other hand, I believe that soldiers should have some guarantee that there will be a definite paycheck at the end of the line. Being a soldier is a difficult life, hard on families and if you want to continue to attract good troops, there needs to be an incentive like a guaranteed retirement.

Response by CW5 John M. made Mar 17 at 2018 12:36 AM

CW5 John M. — Sat, 17 Mar 2018 00:36:37 -0400

Don’t be fooled, every retirement “tweaking” scheme they’ve come up with from the start has been done to get a handle on the numbers paid out. Fancy bells and whistles and sleight of hand still weighs out - the advantage is to “the house”. Not to say that you should not carefully scope out all the advantages you can make for YOURSELF - in your own situation. Once weighed, you determine how best to plan your retirement no matter which tier or plan you signed up for......

Response by MSG Louis Alexander made Mar 17 at 2018 12:55 AM

MSG Louis Alexander — Sat, 17 Mar 2018 00:55:37 -0400

Want to shrink the government? Put Congress at 130,000 a year, let them pay for the own health care without subsidies, contribute to whatever the hell retirement they have for a four-year period, end homesteading in Congress, ban them from receiving outside money and contributions, and selling votes to the highest bidder, and last but not least…forbid them from voting themselves a pay raise. In conjunction with this, have them repay all the money to include any and all interest they stole from Social Security over decades of treating that system as though its their personal slush fund. Until that money is repaid, their pay should drop to a mere 100,000 a year without any kind of subsidy until Congress can once again get Social Security on track to where it belongs.