What do you think of the Congressional proposed retirement changes?

COL Private RallyPoint Member — Mon, 18 May 2015 08:55:34 -0400

http://www.govexec.com/defense/2015/05/house-passes-major-bill-overhauling-military-retirement/112954/?oref=govexec_today_nl

Some say not enough is being done to overhaul the retirement system in place, some say it is not enough to allow servicemembers to live on following retirement. Will this backfire and affect recruitment of top qualified individuals? Will this work and interest capable young people? ..interested in the community's opinion.

House Passes Major Bill Overhauling Military Retirement

The fiscal 2016 Defense authorization act automatically enrolls new troops into the Thrift Savings Plan.

Response by SGM Private RallyPoint Member made May 18 at 2015 9:29 AM

SGM Private RallyPoint Member — Mon, 18 May 2015 09:29:53 -0400

1. We need to return to concepts of "citizen soldiers" with shorter periods of active duty service to our nation experienced by a wider cross section of society, with reserve/guard service leading to a form of retirement after 10 years 2. Twenty and Thirty Year+ plus retirements should be extremely rare in each career field--much rarer than today.

Response by PO1 John Miller made May 18 at 2015 9:57 AM

PO1 John Miller — Mon, 18 May 2015 09:57:30 -0400

It STINKS. It will be horrible for retention.

Response by SGT David T. made May 18 at 2015 12:05 PM

SGT David T. — Mon, 18 May 2015 12:05:20 -0400

This is the same system we have as civilian employees. So far after 5 years I have gone from $0 in the account to close to $20K. So I think there is a potential here for being better off in retirement. It is all contingent on the funds you decide on and the level of risk you are willing to accept and of course the economy. I do know this, too many retirees have to work because their retirement pay isn't enough make end meet. After 20+ years of service, and beating up your body, the retirement pay needs to be enough to live on.

Response by CW5 Private RallyPoint Member made May 18 at 2015 1:09 PM

CW5 Private RallyPoint Member — Mon, 18 May 2015 13:09:45 -0400

The majority of people do not sign up for 20 years so I do not think this will be a retention issue. Also, this will apply only to new recruits so everyone will know what they are getting into when they sign up.

In the end, pension (or deferred compensation) plans are unsustainable when you consider a person can enlist at 18 and retire at 38 and live on into their 90s. That's over 50 years of half pay while still paying another person to fill the slot after you retire.

Response by LTC Nancy Bodyk (Retired) made May 18 at 2015 2:36 PM

LTC Nancy Bodyk (Retired) — Mon, 18 May 2015 14:36:52 -0400

I am conflicted on this one. I like the concept of the 401K TSP option for all with DoD providing some funding. What I don't like is that the current TSP funds are not that great from an investment standpoint or for those who would like to chose their portfolio, two financial managers told me that. I converted mine over to an IRA with more options after retiring. And the commission tried to use an example of an average 7% profit for the 401K in reality it's been 3 - 5% the last few years so they have based their study on overly optimistic profits. I don't agree with reducing the 20 year retirement payout. You cannot take money out of the 401K before your 60 unless you want to pay a hefty penalty fee for early withdrawal. The commission tries to counter with you can make up for the reduced retirement when you turn 60. You can't make up for the money you didn't get for the years prior to turning 60. I am retired after almost 22 years of Service and I have found out my body is falling apart from the physical beating of lugging around heavy rucksacks and duffel bags for years. It bothers me that their were no Senior Enlisted personnel on this Commission. I believe a Senior Enlisted rep would have more knowledge on the real impact to the Enlisted personnel who does 20+. I don't think the 20 year retirement is an incentive for staying in, that's not why I did 20+ years. If it was an incentive more than 15% of the personnel who sign up would hang around for 20+ years.

Response by MAJ Ken Landgren made May 18 at 2015 2:41 PM

MAJ Ken Landgren — Mon, 18 May 2015 14:41:28 -0400

It will have very little impact on recruits. They see the short term.

Response by MAJ Private RallyPoint Member made May 22 at 2015 7:23 AM

MAJ Private RallyPoint Member — Fri, 22 May 2015 07:23:05 -0400

ma'am: I think the issue is retention, not recruitment. The proposed reform might help recruitment, as recruiters could pitch the concept that even more benefits are immediately available. On the flip side, I really think the cliff-vested 20-year retirement concept is a key factor in retaining mid-career types. one risk here is that the creation of a benefit package that follows one upon exit from service is that more mid-career folks will take advantage and exit. Anecdotally, for me personally, the 20-year retirement package was a major factor in my determination to stay in or get out, when I made this determination after 8 years of service (noting that as a FAO, my "mid-career" point came a few years earlier than perhaps is normal).