Military retirement under attack

[clouseau]

How long have civilians had TSP matching?

Since the mid 80"s I believe.

Edited December 14, 2013 by clouseau

[Warrior]

You're kidding right?

 

In addition to lengthy pay freezes and furloughs, all of which we've avoided on active duty, federal civilians have already been asked to contribute significantly more to their retirement in recent years and this new budget deal has piled on to that effort.

 

Most current government employees pay 0.8% of their annual salary as the cost of the FERS annuity.  Those who were hired after Dec 31, 2012 now contribute 3.1% for the exact same benefit, i.e. congrats new guy, you just took an annual pay cut of 2.3% for the exact same benefit each and every year of your employment.

 

Now, not 1 year later, any employees hired recently (less than 5 years of service) will have to pay an additional 1.3% each and every working year for the exact same retirement.  End result: dude hired 5 years ago is contributing 0.8%, dude hired 4.9 years ago is contributing 4.4%.  On, say a $95K salary, that's an immediate $3,420 difference per year and those guys are getting the same benefit on the back end.

 

So while military retirees are getting 1% less per year until age 62 (about 24 years at the most if an 18 year old enlistee retired at 20 years of service), recently hired federal civilians are paying 3.6% more every year they work, which on the civilian side is usually at least that long and possibly longer i.e. 30+ working career before reaching the minimum retirement age which is at most age 57.

 

I'm not a fan whatsoever of either the military or federal civilians picking up the slack in the national budget, but the civilians are getting a much worse deal than the military retirees.  And the negative effects hit immediately rather than the reductions in benefits being deferred until retirement.

Accounting like this is a huge part of the problem. If I understand this scenario correctly, dude who was hired 5 years ago contributes .8 percent. If he's still contributing .8 percent then no one took a pay cut, even if the new hire squadron secretary is contributing 4.4 percent. It's a different job for a different person with a different set of benefits which were known before they signed up.

I'm not arguing this is all rainbows and unicorns but it doesn't sound like the sky is falling either.

Or am I way off track?

[nsplayr]

Accounting like this is a huge part of the problem. If I understand this scenario correctly, dude who was hired 5 years ago contributes .8 percent. If he's still contributing .8 percent then no one took a pay cut, even if the new hire squadron secretary is contributing 4.4 percent. It's a different job for a different person with a different set of benefits which were known before they signed up.

I'm not arguing this is all rainbows and unicorns but it doesn't sound like the sky is falling either.

Or am I way off track?

It's not that the person doesn't know ahead of time if they are a new hire, although it seems like some folks were not grandfathered into what they signed up for and we'll see how it's implemented on the civilian side.

Here's how I think most employees would see it:

Bill is a GS-13 program manager working for Agency X. His annual salary is $95K. He has worked at Agency X for 5 years and contributes 0.8% of that $95K into FERS every year, or $760 per year. If Bill works for the Feds for the next $25 years, he will have paid in $19,000. For argument's sake no promotions, step increases, etc. for simplicity's sake.

Fred is a GS-13 program manager who shares an office with Bill at Agency X. His annual salary is $95K. He was hired on 6 Jan 2014 (hypothetically falling under the new rules if the budget deal passes). He will contribute 4.4% of that $95K into FERS every year, which is $4,180 per year. If Fred stays on with the Feds for 25 years, he will have contributed $104,500 for the exact same FERS annuity that Bill receives. Same assumptions as above.

That is real money and OBTW unlike the changes for military retirements, these changes take effect day 1 in each employees paycheck. Bill's before-tax but after-FERS take home is $7,853 per month. Fred's is $7,568.

Fred, congrats on your new job and all, I'm sure you're gonna work out great, but you get to do the exact same work as your office mate Bill and you will make $285 less per month every month for the entirety of your career.

So as an O-3 who most likely makes IVO what Fred and Bill make, would you want to do the same job you're doing now for $285 less per month?

It's not that the sky is falling, but when you want to raise revenues from a small group of people (Feds, military retirees, or even both groups combined), the pain for each individual person is significant. Anyone with half a brain making $95K annually can figure out how to make it work for $285 per month less, just like any mil retiree with half a brain can make it work with less growth in their expected COLA increases. Neither of those changes are good policy or things I support, don't get me wrong.

My entire argument in the first place was just to demonstrate to clouseau that the Fed civilians were indeed getting the shaft right along side mil retirees, and I'd argue more so since the cuts are felt immediately and affect every federal civilian regardless of whether they ever end up drawing that FERS annuity at retirement. To the ~83% of military members who will never retire, the cuts being proposed will not affect them whatsoever and even those who plan on retiring, you likely have years to adjust your plans rather than seeing $285 extra dollars taken out of your Feb 1 2014 O-3 paycheck.

Edited December 14, 2013 by nsplayr

[ThreeHoler]

How long have civilians had TSP matching?

DOD has had the option of TSP matching for a long time. The Army tried it and determined it was too expensive compared to the current retirement program.

[clouseau]

This was just sent to my inbox and I had to read it twice.

Don't know if it qualifies to be in the read file but it speaks volumes .

https://mickeyinthemiddle.blogspot.com/2013/12/an-open-letter-to-congressman-ryan-and.html?m=1

[hindsight2020]

It's not that the person doesn't know ahead of time if they are a new hire, although it seems like some folks were not grandfathered into what they signed up for and we'll see how it's implemented on the civilian side.

Here's how I think most employees would see it:

Bill is a GS-13 program manager working for Agency X. His annual salary is $95K. He has worked at Agency X for 5 years and contributes 0.8% of that $95K into FERS every year, or $760 per year. If Bill works for the Feds for the next $25 years, he will have paid in $19,000. For argument's sake no promotions, step increases, etc. for simplicity's sake.

Fred is a GS-13 program manager who shares an office with Bill at Agency X. His annual salary is $95K. He was hired on 6 Jan 2014 (hypothetically falling under the new rules if the budget deal passes). He will contribute 4.4% of that $95K into FERS every year, which is $4,180 per year. If Fred stays on with the Feds for 25 years, he will have contributed $104,500 for the exact same FERS annuity that Bill receives. Same assumptions as above.

That is real money and OBTW unlike the changes for military retirements, these changes take effect day 1 in each employees paycheck. Bill's before-tax but after-FERS take home is $7,853 per month. Fred's is $7,568.

Fred, congrats on your new job and all, I'm sure you're gonna work out great, but you get to do the exact same work as your office mate Bill and you will make $285 less per month every month for the entirety of your career.

So as an O-3 who most likely makes IVO what Fred and Bill make, would you want to do the same job you're doing now for $285 less per month?

It's not that the sky is falling, but when you want to raise revenues from a small group of people (Feds, military retirees, or even both groups combined), the pain for each individual person is significant. Anyone with half a brain making $95K annually can figure out how to make it work for $285 per month less, just like any mil retiree with half a brain can make it work with less growth in their expected COLA increases. Neither of those changes are good policy or things I support, don't get me wrong.

My entire argument in the first place was just to demonstrate to clouseau that the Fed civilians were indeed getting the shaft right along side mil retirees, and I'd argue more so since the cuts are felt immediately and affect every federal civilian regardless of whether they ever end up drawing that FERS annuity at retirement. To the ~83% of military members who will never retire, the cuts being proposed will not affect them whatsoever and even those who plan on retiring, you likely have years to adjust your plans rather than seeing $285 extra dollars taken out of your Feb 1 2014 O-3 paycheck.

Man that is a fucking shaft for the new hire FERS employees. I can only imagine what a newly pinned on O-3 would act like if he was told his deductions are going up to the tune of 4.4% for the same benefit, effective right meow. It would make a T-37 sound like a soft whisper in the wind.

[Learjetter]

It's been said before but bears repeating: Congress should cut UNEARNED entitlements, of every kind, before cutting EARNED entitlements.

Anything else is breaking faith.

[herkbum]

It's been said before but bears repeating: Congress should cut UNEARNED entitlements, of every kind, before cutting EARNED entitlements.

Anything else is breaking faith.

Amen. Letters to Congress and President sent yesterday.

[HeloDude]

It's been said before but bears repeating: Congress should cut UNEARNED entitlements, of every kind, before cutting EARNED entitlements.

Anything else is breaking faith.

Careful, you'll offend the liberals.

[Skitzo]

unearned in the sense that the evil profit makers kept them at an economic disadvantage from earning them?

This thing is close to circling the toilet.

Sent from my iPhone using Tapatalk

[Fuzz]

unearned in the sense that the evil profit makers kept them at an economic disadvantage from earning them?

This thing is close to circling the toilet.

Sent from my iPhone using Tapatalk

As long as she gets any damn money, they have no right to touch a single military member's retirement.

https://www.youtube.com/watch?v=fPZBPVnrGfA

Edited December 16, 2013 by Fuzz

[HU&W]

unearned in the sense that the evil profit makers kept them at an economic disadvantage from earning them?

This thing is close to circling the toilet.

Sent from my iPhone using Tapatalk

The "evil profit makers" don't post guards to stop the economically disadvantaged from entering the military recruiter's office.

[pcola]

As long as she gets any damn money, they have no right to touch a single military member's retirement.

https://www.youtube.com/watch?v=fPZBPVnrGfA

"I mean…who would want to work in America? This is what the taxpayers are paying for."

Disgusting human being.

[zach braff]

"I mean…who would want to work in America? This is what the taxpayers are paying for."

Disgusting human being.

So actually, she's not the disgusting human being I don't think - she's just telling us about the disgusting human beings out there. This is from a few years ago - as I recall she's actually an artist using satire to poke at the ridiculous state of welfare, especially in California. Everything she says is true, but she's not the one doing it. She just used this (and her awesome video - "It's Free, Swipe Yo EBT" - google it) to call attention to it.

Although I don't have time to go back and look up the specific references - that's just what I remember. I think.

zb

edited for found the snopes here's some details on it - but yeah it was made in fun then took off... https://www.snopes.com/politics/satire/parasites.asp

Edited December 17, 2013 by zach braff

[Fuzz]

https://www.foxnews.com/politics/2013/12/17/senate-gop-fails-in-final-bid-to-restore-military-pension-cuts-to-budget-bill/

Well you can now thank the democrats for taking more money out of your wallet. To all the liberals out there congrats your congressmen and senators value illegal immigrants over your work and sacrifices.

[Learjetter]

Didn't Congress merely assess and pass the Pentagon's budget request (like they often do) to reduce retiree COLA, among other things?

https://security.blogs.cnn.com/2013/07/31/pay-benefits-troop-reduction-on-the-table-as-pentagon-wrestles-with-budget-cuts/

We might be pissed at congress for passing the damn thing, but isn't it what Hagel and the Joint Chiefs asked for?

[HeloDude]

https://www.foxnews.com/politics/2013/12/17/senate-gop-fails-in-final-bid-to-restore-military-pension-cuts-to-budget-bill/

Well you can now thank the democrats for taking more money out of your wallet. To all the liberals out there congrats your congressmen and senators value illegal immigrants over your work and sacrifices.

Lets be honest and fair here man...a strong majority of the Republicans and so-called 'conservatives' voted for this crap in the House, and several Republicans in the Senate voted to allow it to go forward as well.

For most of the GOP, I think it was purely political as they don't want the government shutdown to change the narrative away from the Obamacare disaster in prep for the Nov 2014 elections, and for the Dems, they wanted to get rid of some of the sequester and be able to show the country that they can govern. So in other words, politics won the day. But make no mistake about it, this was not a result of reduced spending. Check out how much the government will spend this next year and the compare to 2007 or 2008...and then if you really want to be sick, look at how much we spent in the early and mid 2000's compared to the late 90's.

To be quite honest, even if the GOP wins the House, Senate, and Presidency in 2016, I'm not so sure real fiscal discipline will return to Washington anytime soon.

[Fuzz]

Lets be honest and fair here man...a strong majority of the Republicans and so-called 'conservatives' voted for this crap in the House, and several Republicans in the Senate voted to allow it to go forward as well.

For most of the GOP, I think it was purely political as they don't want the government shutdown to change the narrative away from the Obamacare disaster in prep for the Nov 2014 elections, and for the Dems, they wanted to get rid of some of the sequester and be able to show the country that they can govern. So in other words, politics won the day. But make no mistake about it, this was not a result of reduced spending. Check out how much the government will spend this next year and the compare to 2007 or 2008...and then if you really want to be sick, look at how much we spent in the early and mid 2000's compared to the late 90's.

To be quite honest, even if the GOP wins the House, Senate, and Presidency in 2016, I'm not so sure real fiscal discipline will return to Washington anytime soon.

I get what you are saying and I hold the GOP as responsible for this crap sandwich, my point was the fact that Dems blocked the restoration of the COLA cuts ($6 billion over 10 years) in favor of allowing illegals to continue to get tax benefits ($4.2 billion a year).

Edited December 18, 2013 by Fuzz

[polcat]

https://www.foxnews.com/politics/2013/12/17/senate-gop-fails-in-final-bid-to-restore-military-pension-cuts-to-budget-bill/

Well you can now thank the democrats for taking more money out of your wallet. To all the liberals out there congrats your congressmen and senators value illegal immigrants over your work and sacrifices.

What I get from this article: "...a vote to "cut military pensions instead of cutting welfare for illegal immigrants."

Yep, apparently illegals are more important than US service-members. UFB.

[HeloDude]

I get what you are saying and I hold the GOP as responsible for this crap sandwich, my point was the fact that Dems blocked the restoration of the COLA cuts ($6 billion over 10 years) in favor of allowing illegals to continue to get tax benefits ($4.2 billion a year).

How did the Dems vote to block the restoration of the COLA cuts?..and how did they also vote to allow the illegals to get their tax benefits? I have checked the Senate roll call votes and I haven't seen such an amendment voted one way or another. Did Reid not allow it to come to the floor for a vote? I don't think the Senate has voted yet on Sen Wicker's amendment to restore the funding...by all means, correct me if I am wrong.

Either way--why didn't the House put up an amendment to fix the bill and restore the funding in the original bill? The GOP runs the House and they could have adjusted the language. I think it's quite apparent that I'm pretty far from a liberal (except on some social issues), but I think you're only blaming one side of the aisle when we should be blaming both sides equally. They both did it for political reasons and both believe that their end goals justify the means. And let's be honest, in the end, if you (not 'you' specifically, but anybody) are a Republican/Conservative type who is upset by this bill, you will still more than likely vote to re-elect your Republican Rep/Senator even if they voted for it. It's the power of the establishment and incumbency and it's how McCain stays in power, why Graham will get re-elected if he survives his primary, etc. Just the way people vote, which is unfortunate.

[Champ Kind]

"Ahead of the final vote, Sen. Jeff Sessions, R-Ala., tried unsuccessfully to use a parliamentary tactic to force a vote on the amendment, which he wrote to undo the cuts for military retirees."

https://topstories.foxnews.mobi/quickPage.html?page=17224&content=100867436&pageNum=1

Edited December 18, 2013 by Champ Kind

[HeloDude]

"Ahead of the final vote, Sen. Jeff Sessions, R-Ala., tried unsuccessfully to use a parliamentary tactic to force a vote on the amendment, which he wrote to undo the cuts for military retirees."

https://topstories.foxnews.mobi/quickPage.html?page=17224&content=100867436&pageNum=1

Fair enough, though the Wicker's Amendment (which does the same thing) still hasn't been voted on. And again, why didn't the GOP in the House do this where they have full control?

[Fuzz]

How did the Dems vote to block the restoration of the COLA cuts?..and how did they also vote to allow the illegals to get their tax benefits? I have checked the Senate roll call votes and I haven't seen such an amendment voted one way or another. Did Reid not allow it to come to the floor for a vote? I don't think the Senate has voted yet on Sen Wicker's amendment to restore the funding...by all means, correct me if I am wrong.

Either way--why didn't the House put up an amendment to fix the bill and restore the funding in the original bill? The GOP runs the House and they could have adjusted the language. I think it's quite apparent that I'm pretty far from a liberal (except on some social issues), but I think you're only blaming one side of the aisle when we should be blaming both sides equally. They both did it for political reasons and both believe that their end goals justify the means. And let's be honest, in the end, if you (not 'you' specifically, but anybody) are a Republican/Conservative type who is upset by this bill, you will still more than likely vote to re-elect your Republican Rep/Senator even if they voted for it. It's the power of the establishment and incumbency and it's how McCain stays in power, why Graham will get re-elected if he survives his primary, etc. Just the way people vote, which is unfortunate.

I already called my congressman's office and let them know I would not vote for them again this year, even if it means not voting since it doesn't look like they'll have a primary challenger. Yes the GOP owns this also but I blame the Dems for this because they were offered an immediate bigger savings (and theoretically a long term bigger savings, if you want to include the future money that would have been shelled out) and chose illegal immigrants over our veterans. Don't mistake my criticism and anger at them Dems for their choice as me giving the other side a break.

[TMFan]

I work on a staff with a bunch of retirees and FGOs working their way towards retirement. What shocked me was how little most of them knew about the bill. After I explained how much of a bite it would take out of their retirement checks, few seemed to care much--certainly not enough to write to their senators. It seemed to get about the same amount of attention as another proposed Tricare copay increase.

Anyone else experience the same in the office?

For those of you who were indifferent enough not to write to your Congressmen, can I ask why? Was it a feeling of inevitability? Is it just not a big deal to you?

Seriously trying to understand.

[pawnman]

I work on a staff with a bunch of retirees and FGOs working their way towards retirement. What shocked me was how little most of them knew about the bill. After I explained how much of a bite it would take out of their retirement checks, few seemed to care much--certainly not enough to write to their senators. It seemed to get about the same amount of attention as another proposed Tricare copay increase.

Anyone else experience the same in the office?

For those of you who were indifferent enough not to write to your Congressmen, can I ask why? Was it a feeling of inevitability? Is it just not a big deal to you?

Seriously trying to understand.

Because my lone voice in the wilderness means less than nothing to a senator from a state as large as TX.