Military retirement under attack

[ClearedHot]

And shuffle up and down the isles at the pace of a snail in line abreast formation with your wife.

Last time I was in the Eglin Commissary I was trapped behind just such a beast...I almost chimed in with a "could please move you old fat fuck", when the dude turned sideways and I realized it was Gen Horner. Why do retirees have to shop on weekends? You are retired, please go on Tuesdays at 1400.

[OverTQ]

I fully expect them to do something stupid like changing the retirement plan with no grandfather clause. A lot people will rise ups with their pitch forks and show the services their mistake by leaving. They will try to get everyone around them to leave with them to validate their cause. My advice is if still like what you are doing, stay. If it really is that bad of a change, congress will eventually come back to it and put some patch like a grandfather clause back in. Worst case scenario, you still have a paying job that is making more than you would in seven years for the airlines. Best case you still have a job, probably the last old style retirement left and a lot less competition.

[Herk Driver]

Agreed...let current troops choose either, all new guys get new system. Anyone seen any more written details other than the tabloid AF Times story?

Those past 15 years have already made a choice...on paper...REDUX or Top 3. This plan appears to fly in the face of that.

This has probably already been posted, but...

https://dbb.defense.gov/pdf/DBB_Military_Retirement_Final_Presentationpdf.pdf

Edited August 5, 2011 by Herk Driver

[matmacwc]

Front page of fox:

https://www.foxnews.com/politics/2011/08/15/pentagon-scraps-traditional-pensions-in-its-proposed-retirement-program/

[Champ Kind]

Any of you old heads recall seeing THIS MUCH rhetoric about military retirement in the past?

I know this topic has come up a couple of times just since I've been in, and it is always dismissed. Seems a little more real this time around.

[BFM this]

I was really young during 40%. I remember a lot of bitterness. A LOT. In conjuntion, a lot of E-6's were getting kicked to the curb at 16-17 years.

I was like a young pup that could smell something bad in the air, but didn't quite know what it was...

[BitteEinBit]

We all know changes are coming to the current retirement system, the questions is how drastic will the changes be and how drastic will the effects be on the force. There are a lot of different plans out there...the one I think is most likely to be implemented is the one that takes a snap shot of the current force and offers a percentage of current years served as retirement at 20 in addition to matching TSP contributions between implementation date and 20 years of service. They sound like great ideas on paper when it comes to saving money, but I think it will have severe impacts on our readiness and force structure of the future...specifically 10 years from now. Here are a few points to consider:

If there is no longer an incentive to stay in past 20 for a guaranteed annuity, where will your leadership come from? What benefits are left that would keep people in up to or past 20?

Will the strength of the force become dependent on the investment market? In other words, will people start to take the money and run at 15 years if it looks like the stock market will crash? What happens to people at 19 or 20 years who are invested in the TSP when the market crashes?

What happens to the readiness of the force if while at war the market is in flux? Should our troops have to worry about their nest egg while fighting a war because the market is in flux due to irresponsible government spending?

This new retirement system seem to be just a pay cut, especially to our younger troops. TSP becomes mandatory and is only "matched" up to 16.5%? So SrA Yummybritches has to invest 16.5% of her already low base pay to save for a retirement that may or may not be there when she hits 20?

They make this seem like it is "fair" for everyone who serves, but without a guarantee of a set annuity, I find it hard to believe anyone will stay invested in a retirement fund for much longer than 10 years. We are already hollowing out the force now by forcing out experienced NCOs with the HYT rollbacks and with the FGO RIF that just happened. Now you want to hollow out the force more by implementing a market-dependent retirement system that doesn't encourage anyone with experience to stay longer than 10-15 years?

I'd like to get everyone else's thoughts on impact to the force with this new retirement system. I think there is more to it than just trying to save money...and I don't think any of the leadership making these decisions are considering ANY of the implications of any of these new plans. If they have been thinking about them, they haven't addressed them. I know they've talked about targeting certain specialties and increased benefits during wartime, but I think they'll have to apply them to ALL career fields to cover the personnel shortfalls that are going to happen. Thoughts??

Edit for GRAMMAH

Edited August 15, 2011 by BitteEinBit

[PirateAF]

What happens to the readiness of the force if while at war the market is in flux? Should our troops have to worry about their nest egg while fighting a war because the market is in flux due to irresponsible government spending?

That is an excellent point. My attention to my investments drastically diminishes during deployments.

I don't understand why they try to impress upon us that it's an advantage to have multiple investment options in the TSP/401k plan. There is no better investment than a guaranteed annuity. Who can beat a riskless payout for the rest of your life?

And I was personally surprised that only 20% of the force stays until 20.

[BitteEinBit]

That is an excellent point. My attention to my investments drastically diminishes during deployments.

I don't understand why they try to impress upon us that it's an advantage to have multiple investment options in the TSP/401k plan. There is no better investment than a guaranteed annuity. Who can beat a riskless payout for the rest of your life?

And I was personally surprised that only 20% of the force stays until 20.

I was surprised about the 20% too...but even more surprised at the enormous costs associated with such a small percentage of retirees that continues to rise. I think this new "retirement" system that pretends to be "fair" to all who serve is really just an attempt to create another pot of money (required TSP contributions) to raid in order to fund the current retirees until they can find another solution. I think they are hoping this new investment strategy lasts long enough to fund and eventually phase out the 20-year annuity retirees so there will no longer be a liability. We are living longer, so it will obviously take decades before that happens. The problem is that I don't see people motivated to stay longer than 10 years...so in the long run, the DoD spends billions of dollars training new recruits to replace the ones who are no longer motivated to stay in past 10 years. Where are the savings? If I were coming into the military today under the new retirement system, I would contribute for 10 years into the TSP, get my free education, free $1M flight training, and transfer my investments to a real 401k when I transition to the airlines. Other than patriotism, give me another reason why I should stay any longer than that?

My question is what other benefits will they offer to keep people in past 10 years in order to continue "funding" the current benefits?Because we are living longer, the retirement benefits currently funded by DoD won't decrease fast enough in series with the proposed defense budget cuts. So, in theory, entitlement spending for DoD will become a larger percentage of the smaller DoD budget. It has to be funded somehow...

[KennyB]

Where are the savings? If I were coming into the military today under the new retirement system, I would contribute for 10 years into the TSP, get my free education, free $1M flight training, and transfer my investments to a real 401k when I transition to the airlines. Other than patriotism, give me another reason why I should stay any longer than that.

This is the truest statement in the entire thread. If I can get this new military "retirement" at most any job a college grad would get in the public/private sector, why would I stick around for the most taxing final decade? Sorry AF, you no longer have me over the barrel for a 365... I'll take my TSP and 7-day opt. It's not like anything significant happens at 20 years anymore.

My patriotism will only get me so far with ditching my family for months at a time EVERY YEAR. I don't want to hear that anymore. If I served out my commitment, I'm a patriot. If I'm a 4-year one-term airman, I'm a patriot.

The DBB needs to stop hiding behind this recurring "fairness" theme... we don't need to be fair to the 83% who don't stick it out for 20 years... we need a retention tool to keep people from turning down shitty deals between 15-20 years. Get real, the DBB has never been about fairness... it's a cadre of Bob Slydells from Office Space.

[Karl Hungus]

If there is no longer an incentive to stay in past 20 for a guaranteed annuity, where will your leadership come from? What benefits are left that would keep people in up to or past 20?

They won't have a choice when the UPT ADSC goes to 15+ years.

[ClearedHot]

They won't have a choice when the UPT ADSC goes to 15+ years.

Try 20....

[epsilon]

I'm out if they implement this. 3 years left on ADSC and I'll be a current flying viper pilot when I am eligible to get out. Why would I stick around and put my family through the asspain while the airlines are hiring, etc? My plan is to remain in for 20 but if they pull this act I'm gonna have to take a knee. Good luck AF.

[Beaver]

Try 20....

And there will still be a line of dreamers out the door waiting to sign up.

[BFM this]

Try 20....

Fast forward a few years. Assuming these changes take place, how or would your advice change for...

the 17yo that is thinking of enlisting

17yo thinking about a service academy

junior at the zoo thinking about pilot training

7yr SSgt weighing thier options (ranging from defense contracting job to going back home to be a cop)

I've got my ideas, just thinking through the second order effects for discussion sake.

[Guest Sandlapper]

I'm out if they implement this. 3 years left on ADSC and I'll be a current flying viper pilot when I am eligible to get out. Why would I stick around and put my family through the asspain while the airlines are hiring, etc? My plan is to remain in for 20 but if they pull this act I'm gonna have to take a knee. Good luck AF.

Bear with me here...it's a stretch, but maybe the A1 folks are finally playing chess vs. checkers with this. With an imminent end-strength draw down on the horizon for all services, what better way to get guys to voluntarily leave Active Duty than threaten (or implement) a sweeping change to the one incentive that keeps people in? And guess what...when folks walk on their own, there's no need to pay involuntary separation pay. Give this a few years to "fix the glitch" (in keeping with the Office Space theme), then undo the change (i.e; back to 20yr, 50%) if poor retention becomes the problem-du-jour. Remember, they undid the Redux debacle once the uproar became too loud.

Just saying...look at all of the guys threatening to walk. Many will follow through on that threat, and it's feasible to believe that's part of the manning/budget calculus.

[di1630]

Fast forward a few years. Assuming these changes take place, how or would your advice change for...

the 17yo that is thinking of enlisting

17yo thinking about a service academy

junior at the zoo thinking about pilot training

7yr SSgt weighing thier options (ranging from defense contracting job to going back home to be a cop)

I've got my ideas, just thinking through the second order effects for discussion sake.

I'd still recommend the AF for dudes even with a 10 yr UPT commitment, but just treat it like a 10 yr flying job rather than a career. I'd just be honest with them that they should start thinking about ratings and making themselves marketable to airlines much earlier and to not give a flying-fook about SOS, ACSC or masters because that is only a need if you want o stay in which I would not tell any pilot to do at current ops tempo. Be out on your ass at 32 current in a jet marketable to an airline or be out on your ass at 42 struggling for seniority which is everything in the airline biz.

[ClearedHot]

Bear with me here...it's a stretch, but maybe the A1 folks are finally playing chess vs. checkers with this. With an imminent end-strength draw down on the horizon for all services, what better way to get guys to voluntarily leave Active Duty than threaten (or implement) a sweeping change to the one incentive that keeps people in? And guess what...when folks walk on their own, there's no need to pay involuntary separation pay. Give this a few years to "fix the glitch" (in keeping with the Office Space theme), then undo the change (i.e; back to 20yr, 50%) if poor retention becomes the problem-du-jour. Remember, they undid the Redux debacle once the uproar became too loud.

Just saying...look at all of the guys threatening to walk. Many will follow through on that threat, and it's feasible to believe that's part of the manning/budget calculus.

Our end strength won't drop like the other services (USA and USMC). While we are marginally over end strength, we are not looking for a mass exodus. The Air Force to a greater extent than the other services relies on highly trained people to man many key career fields, that training takes time to develop, and we are not looking to thin the heard by massive numbers. I look for the Marines to drop from 202,000 to below 176,000,....just a guess The USA will see an even larger drop.

In the end if USAF does reduce it will be in much smaller numbers and if too many people try to leave I think it will take .69 seconds for them to drop Stop-Loss on critical career fields...i.e. Fighter Pilots.

Fast forward a few years. Assuming these changes take place, how or would your advice change for...

the 17yo that is thinking of enlisting

17yo thinking about a service academy

junior at the zoo thinking about pilot training

7yr SSgt weighing thier options (ranging from defense contracting job to going back home to be a cop)

I've got my ideas, just thinking through the second order effects for discussion sake.

If these changes take place...I would strongly encourage my son NOT to join the military.

If the new system becomes retro-active, I would also likely retire at the first opportunity.

[matmacwc]

I'd still recommend the AF for dudes even with a 10 yr UPT commitment, but just treat it like a 10 yr flying job rather than a career. I'd just be honest with them that they should start thinking about ratings and making themselves marketable to airlines much earlier and to not give a flying-fook about SOS, ACSC or masters because that is only a need if you want o stay in which I would not tell any pilot to do at current ops tempo. Be out on your ass at 32 current in a jet marketable to an airline or be out on your ass at 42 struggling for seniority which is everything in the airline biz.

Do your PME and masters, ain't gonna hurt when you get out at 10 getting a job, especially non-flying. I agree with the rest above.

[fire4effect]

Anybody hear a plan for the Reserve Component? A few years ago they talked about a reduction from age 60 to draw the annuity base on deployed time. Looks like they'll keep leaning on the RC forces all right for now due to cost savings but flat out screw them in the end when it comes time to pay up on retirement.

[nsplayr]

If I were coming into the military today under the new retirement system, I would contribute for 10 years into the TSP, get my free education, free $1M flight training, and transfer my investments to a real 401k when I transition to the airlines.

I think we're focused too much on our small piece of the puzzle here. The VAST majority of people that joint the military are not in the position of AF officer pilots, who have extremely valuable training and the option to go to a ready-made industry. That force support or MX or AFE airman who's enlistment is up may or may not have a lot of other great options outside the military depending on the economy and their education, so their decision to stay in or get out at the end of their commitments (which are much shorter than pilot ADSCs) is quite different.

You ask what motivates people to stay in past 10 years under a new sy stem? Big Blue (and Big DOD since it would apply to all the services) would have to learn to treat us like the rest of the world treats it's employees and use market forces to incentivise us to stay rather than moving on to seemingly greener pastures. What motivates people to stay with other lines of work after many many years?

I think especially with the risks and sacrifices inherent in military service, either direct compensation would have to go up significantly or we'd have to return to the very socialistic system we currently have, with single-payer healthcare, a guaranteed pension, free money for education, etc. While I'm a fan of the new proposals, I'm very skeptical that they would work very long, especially if the goal is to save money rather than to create a more effective and market-based system for retention.

If I served out my commitment, I'm a patriot. If I'm a 4-year one-term airman, I'm a patriot.

And under the current system you walk away with exactly $0 dollars in your pocket other than your own contributions to TSP and the value of your skills and training.

Look, the majority of people are not making the career-or-punch decision at the 10 year point. They're making it at the 4 year or even 3 year point and it's not a career decision, they can re-up for another 3-4 or even just take one more PCS and the accompanying 2 year commitment and stay a little longer. The calculus is quite different and I think if the forums here were better represented with non-aviators we'd be getting a different perspective WRT the thinking behind the decisions to stay versus go. That perspective I think is more in line with the majority of the active force where our concerns, while valid for our community, may not be applicable to the larger force. Like CH said, the Air Force may have some unique challenges under a new system because we rely on the retention of a smaller number of highly-skilled technical operators rather than on larger numbers of relatively less-skilled bodies like in the Army or Marine Corps.

As I've said before, the new system puts money into the pockets of a huge number of people, who as you just said, honorably served out their commitments and are patriots. And it does so only for people who take it upon themselves to save for their retirement; if you contribute nothing there's nothing for the government to match. A new system like the one being proposed would both give something to a greater number of service members and would incentivise positive behavior such as savings and planning for retirement at a young age. I like all those things, especially as someone who's inclined to punch at the 7 year point; the current system has nothing for me and I'd be getting a better retirement bang for my buck if I were working a GS position.

P.S. - anyone having issues with multiquote on this page? I'm probably the king of multiquote so I don't think it's operator error and it doesn't work for me on this page specifically...

Edited August 16, 2011 by nsplayr

[KennyB]

As I've said before, the new system puts money into the pockets of a huge number of people, who as you just said, honorably served out their commitments and are patriots.

Solution: Everyone who signs up for the service starting tomorrow will be under the new system. Everyone who signed up yesterday will be under the old system. Problem solved.

[old crow]

Solution: Everyone who signs up for the service starting tomorrow will be under the new system. Everyone who signed up yesterday will be under the old system. Problem solved.

Too easy and makes too much sense.....which is why it won't happen.

[zach braff]

No Changes to Military Retirement Any Time Soon, Officials Say

zb

[KennyB]

For the masses... a sample letter to your Senator/Congressman. A place to start... change it up/write your own, but take the time to make your voice heard. We can't bitch about how little Congress does if we didn't attempt to suggest some changes.

-------------------------------------------

My name is Ken Blankenship. I'm a Texas resident and a registered voter in XXXX county. I'm married with XXX small children.

I'm also an X-year combat veteran who has served in Operations IRAQI FREEDOM, ENDURING FREEDOM, and UNIFIED PROTECTOR, piloting both the C-130 and KC-135.

With regard to the pending military retirement change proposed by the Defense Business Board, I can assure you that it will be a game changer for myself and my family if implemented. From my earliest years at <XX COLLEGE>, I've mentally and physically prepared myself to become a useful instrument of national policy, ready for my country's call to arms. After the completion of various training programs over the years, I've signed multiple military service commitments extending my active duty contract. I've deployed XX times in support of global contingency operations and dealt with extended time away from my family. We know that military service is a life of sacrifice so our great country can continue to prosper and act in our defense and the defense of our allies.

In XX years, my family has moved XX times to support my training and duty assignment changes. During this time, my wife has held several part-time jobs, as very few companies are willing to support military spouses long-term. She has been unable to establish a successful career using he rBachelor's degree due to the uncertainty of our frequent moves. Last year, we were finally able to purchase our first home, which we will live in for three years and then sell (if able) because our budget can't support multiple mortgages. This constant cycle of moving has created instability with my wife's potential income and will result in a constant regeneration of a mortgage payment for the duration of my military career, resulting in restarting a final 30-year mortgage when we're finally able to settle down in one location.

If the current 20-year cliff-vested retirement is traded for a 401k style traditional IRA with income matching, it will significantly affect my family's decision to continue to serve our great country on active duty. Like many military officers, I have marketable career options in the public and private sector based on a resume highlighting years of leadership experience and multiple advanced academic degrees paid for by the military. As a pilot, I'm also aware of the massive commercial airline hiring boom that will occur in the next five years. The military has paid for all of my academic degrees and aviation certifications, and for that I am grateful. That gratefulness will only go so far as I weigh options for my family's future.

All these factors are included in my long-term family planning. Despite the draw to the civilian sector, my family has thus far chosen to stay the course with the military because we understand that our sacrifice will be recognized financially at the end of my career. Military life is inherently volatile, but the stability of the military paycheck and eventual pension has made our decision to stay an easy one. If we continue to soldier through the rough times, we will eventually reach the 20-year retirement which would offset the financial reality that my spouse has been unable to start a career and we are just beginning a 30-year mortgage in our 40s.

I've signed commitments that I've upheld throughout my career; if the Department of Defense can change its financial commitment to my family at a moment's notice, there is little difference between military service and a career in the civilian sector. I can get a 401k with income matching as a private citizen. By design, the military life is different from the private sector, and the notion that we should be treated the same is ludicrous. If the Department of Defense wants to align its business practices with Fortune 500 companies, the end result will be a mass exodus of highly qualified service members to those same companies from which the model was created. The cliff-vested retirement is not about being 'fair' to the 83% of service members who do not serve 20 years (as stated in the Defense Business Board's brief); it practically functions as a retention tool to keep highly qualified individuals in the service when years of patriotism and service does not balance with family planning and stability.

Senator/Congressman XXXXX, I urge you to consider this letter when the Defense Business Board's proposal makes its way to your desk. I realize budgets cuts need to be made, but gutting the current military retirement system will result in many potential future leaders of the this great country taking their experience and government sponsored educations to the public and private sector. The end goal should not be to align the military with civilian companies; the service requires a greater amount of danger, dedication, and sacrifice. Those individuals who dedicate 20 years to that cause should be able to count on the U.S. Government to repay that debt.

Sincerely,

Ken Blankenship

--------------------------------

Edit: Bureau for Board

Edited August 17, 2011 by KennyB