Posted on Jul 20, 2015
The Pentagon is backing the new retirement plan, which is similar to a 401K. What are your thoughts on the projected plan?
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Pentagon is officially backing a "blended" system that would shrink the size of the current pension by about 20 percent yet supplement that benefit by offering government contributions to individual retirement investment accounts.
The Current Retirement plan does not require Soldiers to invest their own money in order to receive a guaranteed retirement at 20 years. Under the new program Service members will have to take a portion of their pay and invest it toward their retirement with government matching up to a certain percentage.
We currently have the TSP which is an investment opportunity for Soldiers to utilize as an addition to their retirement and can be a valuable investment tool for those not wishing to make a go at the 20 years required for the current 50% pay for the rest of your life retirement.
This will be very good for government finance reduction costs, but in this Soldier's opinion not good for the Service Members who risk their lives without hesitation for their country.
http://www.militarytimes.com/story/military/benefits/retirement/2015/06/10/dod-retirement-plan-details-approved/71011882/
The Current Retirement plan does not require Soldiers to invest their own money in order to receive a guaranteed retirement at 20 years. Under the new program Service members will have to take a portion of their pay and invest it toward their retirement with government matching up to a certain percentage.
We currently have the TSP which is an investment opportunity for Soldiers to utilize as an addition to their retirement and can be a valuable investment tool for those not wishing to make a go at the 20 years required for the current 50% pay for the rest of your life retirement.
This will be very good for government finance reduction costs, but in this Soldier's opinion not good for the Service Members who risk their lives without hesitation for their country.
http://www.militarytimes.com/story/military/benefits/retirement/2015/06/10/dod-retirement-plan-details-approved/71011882/
Posted in these groups: 
Retirement
Military Career
Retirement Military Career
Edited >1 y ago
Posted >1 y ago
Responses: 42
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I think it will be a wonderful plan for the Fortune 500 companies to get our best and brightest unless Uncle Sam pays some giant bonuses to senior enlisted and officers. If the bonuses do not come, anyone that could make CSM or O-6 will be out at 15years and fully vested. I fear it will sound great like BRAC and in the end cost the government a lot more money. Take an MI officer that is fluent in Arabic, at 15yrs the CIA comes calling, who do you think under this new plan they will be working for at year 16? Here comes a giant bonus and traditional retirement at 20yrs-nothing saved by the government.
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With the fact that we now make a lot more than 20 years ago, this is a feasible plan. We need to ensure that we are providing the education to new troops better than what I received (sign up for savings bonds!). The good news is that we will all know the day that this becomes the new standard for new recruits. You know what you are getting into.
And don't think it will hurt recruiting. I am comfortable saying that most of us joined without the intention of staying for 20 in the first place. With that mindset the portability of the retirement will be a selling point. Only time will tell. Free pensions from age 38 until death are fiscally unsustainable, especially after the pay gaps were narrowed.
And don't think it will hurt recruiting. I am comfortable saying that most of us joined without the intention of staying for 20 in the first place. With that mindset the portability of the retirement will be a selling point. Only time will tell. Free pensions from age 38 until death are fiscally unsustainable, especially after the pay gaps were narrowed.
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1SG (Join to see)
Thank you for your thoughts Chief. I can't say that I agree with you, but you're not the only one who thinks this is going work. I do agree that time will be the determining factor if or when this goes into effect.
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The cash system is much better than the current accrual system. Let's face it Chris Kyle not getting anything out of his years in service aside from a disability claim is pathetic.
The real problem with this implementation is the motivation, a 20% cut in retirement pay after the longest war in our history is a significant attack on combat veterans and a significant slap in the face. Let alone the retirement is the bread and butter of our mid grade NCO corps. without the 20 immediate retirement a significant number of our best troops will be rethinking their career choices.
The real problem with this implementation is the motivation, a 20% cut in retirement pay after the longest war in our history is a significant attack on combat veterans and a significant slap in the face. Let alone the retirement is the bread and butter of our mid grade NCO corps. without the 20 immediate retirement a significant number of our best troops will be rethinking their career choices.
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Concur sir....but most problems with implementation could be solved by simply only making brand new recruits fall under new plan...so they know what they are getting into when they join. Also allowing those already in the service the option to stay under current top-3 or move to new would be good....Biggest thing in my opinion is like you said...it's a shame folks like Kyle got out of the service with nothing but a handshake....thank should not happen.....we have been at war long enough that everyone who servers for any amount of time should leave with something for the future.
MAJ (Join to see)
It still won't keep our senior NCO's in the service, This is a good plan for the six and out career path. Our Army survives on it's backbone and the mid level NCO core is the retirement. This will end horribly if the NCO's are not given a significant uptick in pay to account for the loss of their retirement.
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Just another reason on a growing list to GTFO after my initial contract is complete. From the time I enlisted, programs I joined up for have been tweaked or gutted. Why should I expect any different if I remain?
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Good.....retirement needed revision....I don't agree with all of this but it is step in right direction....i've had to many good Airman leave with nothing after going to the sand box 2,3, or even 4 times.....we have been at war for 15 plus years and have folks getting out at 8 years with a handshake and a thank you.....that's a damn shame......part of taking care of veterans is starting with taking care of them while they are active. In today's world there is no reason someone should be leaving the military after even 4 years without something in the bank for retirement.
Or even worse the guy or gal that comes back from the dessert has medical issues and then starts having PT issues.....as of right now you can be administratively at 18 years and get nothing. Least under this plan folks would have something set aside for retirement.
Anyway just my two or four cents...
Or even worse the guy or gal that comes back from the dessert has medical issues and then starts having PT issues.....as of right now you can be administratively at 18 years and get nothing. Least under this plan folks would have something set aside for retirement.
Anyway just my two or four cents...
1SG (Join to see)
Thank you for your 2 or 4 cents. I agree with the need for some revision and matching of investments for those that do not stay to 20 as a consideration, of course adding that and not taking away from the other would just cost more money and we know everything is about saving the money, not keeping the value. I would like to say also that personnel do still get something is they don't stay past an initial term or till retirement. For example 9/11 GI Bill has is worth a substantial amount of money and earned without putting any money into it. Hopefully they don't take that benefit next because it costs money as well.
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1SG (Join to see) - Concur....but alas college is not for everyone.....and I believe they have to stay 36 months to be eligible ...but yes it is a great perk for those who can and do use it.
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I understand the Pentagon's rationale for this recommendation. I object to it in theory and the potential impact on retention for career military leaders; however, I understand that DOD must be creative in looking at ways to reduce costs. Overall, I believe this is an acceptable compromise to what we already have in place.
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1SG (Join to see)
Sir, Thank you for your input. I'm not to sure this is an acceptable compromise. I think they can do better. I'm thinking they need to go back to the drawing board and do more analysis on this, savings verses value.
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It's always curious to me that so many military personnel and vets are so-called conservatives, yet when it comes to their pensions, why are they afraid of the system most Americans belong to, the free economic, no guaranteed retirement system? Why do they scream about some politicans trying to revise or eliminate their socialist pension system? Its like Social Security, which most Republicans tried to kill so many times back in the 1930's and 40's. Yes, it even went to the Supreme Court which upheld it as a tax, much like so-called Obamacare.
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Concur....most military members and retiree think they are conservative....but in reality they are socialist.....they just don't realize it until its to late.
After all where else will day care cost you more just because you make more.
After all where else will community housing cost you more just because you make more.
Hell even Holiday Party tickets cost more based on rank.
Dues to "professional" societies are based on income.
Anyway......guess i'm saying great point.....and I concur
After all where else will day care cost you more just because you make more.
After all where else will community housing cost you more just because you make more.
Hell even Holiday Party tickets cost more based on rank.
Dues to "professional" societies are based on income.
Anyway......guess i'm saying great point.....and I concur
1SG (Join to see)
MSgt Ronald Stacy - Are you hearing yourself. Working for 20 plus years and getting a retirement isn't a hand out. Are you willing to give back your retirement? If you are so unhappy with the system then why are you in it. You sound very disgruntled.
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This is actually a pretty well thought out plan that in the long term will benefit just about everyone.
In the near term it will cost the government more while they pay 50% retirements and begin to match contributions of those on the new plan. In the long run it will save money.
For service members that use the new plan there is an immediate obvious benefit to those who wouldn't stay 20 and a potential benefit to those that do if they utilize the matching contributions well.
In the near term it will cost the government more while they pay 50% retirements and begin to match contributions of those on the new plan. In the long run it will save money.
For service members that use the new plan there is an immediate obvious benefit to those who wouldn't stay 20 and a potential benefit to those that do if they utilize the matching contributions well.
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1SG (Join to see)
Sir, I concur with the fact that this will save the government money in the long run. My contention is everybody keeps mentioning the best case scenario, without looking at the most common scenario. For it to work for those that do stay for the 20 years they will have had to put into that fund part of their pay check, from the beginning, to get that equivalent retirement, which is not the case right now. Essentially each Soldier will be taking a pay cut to get the retirement, most of us get now.
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LCDR (Join to see)
1SG (Join to see) I made a second reply after doing some math and you may be surprised at how well some of the different scenarios work out for the retiring service member. That said I agree it does depend on how much is contributed to a very large extent, but I also think it should. We need to give a little of the onus back to the members.
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1SG (Join to see)
I don't disagree with the fact, that if a Service Member invests the right amount of his pay check and then the government matches it, that individual could receive a retirement amount similar to or possibly slightly better than the current 50%. I have crunched the numbers as well. My point is, they should not have to give up part of their pay to receive that 50%. Current system does not require a service member to risk a portion of their pay toward retirement, currently they only have to risk their lives. I am all for service members investing money. Proper investment along with your 50+% retirement (years of service depending) could enable a service member great flexibility upon retirement, possibly even full retirement at a much younger age. I can say I have invested heavily and 2008 thru 2011 were very painful for my investments. What happens when this occurs to a Service Members retirement fund. They won't have that other guaranteed check coming in to help buffer that loss and stabilize them thru the rough patch. Markets go up and markets go down. Enlisted Soldiers already have a tougher time storing away retirement money out of their pay. Now we are going to mandate it, if they want anything after 20 plus years of service. An O4 with 15yrs of service already makes more than the Senior Enlisted advisor in any of the branches. There are just so many negatives to this plan, I am baffled at how it is even being considered. There has to be better ways to make cuts.
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I hope that they will have a choice. I also hope it is not enforced with all but you know the government will choose the "best" way to save a dollar.
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LCDR (Join to see)
MSG (Join to see) at least right now it looks like there will be a choice for those already in. And I completely agree it would be grossly unfair to not have that part. Considering how much time current members would have lost for the matching contributions.
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Suspended Profile
They will allow those with X amount time in service to be grandfathered in.....just like they do ever time there is a significant change. ......those already vested in top 3 will be allowed to finish out as such. The interesting part will be where they draw the line. Me I think anyone in service before effective date should have to opt in to new program or stay Top 3......otherwise I think after the initial shock it may actually have a positive impact on the service in that it should decrease those retired on active duty folks who are just "hanging on till retirement" because they will be able to cut bait at any time and still have a retirement nest egg to take with them.
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