Military retirement under attack

[Guest]

Cut it. Everyone is going to have to eat a bite of this giant shit sandwich we have made for ourselves, even the military/DoD. The gravy train can't last forever, this stuff isn't free (generally speaking of all things government).

Ugh.

Freedom isn't free. We have the greatest military force the planet has ever seen because it is all volunteer. We're not talking about a gravy train. We're talking about people willing to give 20 years of their lives to serve their country and accept some pretty significant sacrifices, not the least of which are financial.

Simple economics...remove the incentives and say goodbye to your chances of attracting and retaining the best talent.

In my opinion, no way in hell the military will keep very many trained professionals if the retirement age is changed to 57. Making a career change while one is in their early 40's (usual 20 year retirement age and when many have kids to support) without the safety net of a retirement income is risky business. I would bet most pilots would punch as soon as their commitment has expired in order to start a new career before they start a family or before their kids are older. Braces, college, etc. adds up fast. I know that is what I would do if faced with that choice. To those with less than 15 years AD - good luck, I hope the plan isn't enacted. Regards, RF

Word.

2. I don't think it would hurt initial recruitment. But, there would be a big difference in the retention rates at the eight year mark. It would be big for RES/NG recruitment. The argument would go, "Why go AC if you can go RES, get the same training, fly about the same, not have to do desk jobs and draw your retirement pay at the same time as AC?"

There is a flaw in this argument.

I don't know why so many people think the ARC can absorb everyone that ever bails from the USAF that wants to be in the ARC. I am especially amazed by how many pilots on AD who think they can just punch and get a flying job in the ARC the next day.

That is simply not true.

[shiznitobam_allstars]

Ugh.

Freedom isn't free. We have the greatest military force the planet has ever seen because it is all volunteer. We're not talking about a gravy train. We're talking about people willing to give 20 years of their lives to serve their country and accept some pretty significant sacrifices, not the least of which are financial.

Simple economics...remove the incentives and say goodbye to your chances of attracting and retaining the best talent.

You are right, freedom is indeed not free, I think I heard somewhere that it costs $1.05. All kidding aside, I attempted to caviat the gravy train comment with a reference to federal spending in general. Fail. What I refer to is the massive entitlement culture that has been created and the fact that it cannot be sustained. What you and I consider to be worthwhile expenditures of entitlements (military pensions), others think that gay illegal alien mothers of 14 are a more worthwhile. So to get it done, everyone must take a bite of this giant shit sandwich that we have made for ourselves in order to get past picking winners and losers. This is just the beginning of the default on promises that will come from the state. Now, to play devil's advocate for a second, why is it unreasonable to expect a retiree to find gainful employment for themselves between retirement and this proposed age of 57.

Edited December 9, 2010 by shiznitobam_allstars

[spaw2001]

I think it is kind of ridiculous for people to seriously rely on the government and expect a retirement. I am not trying to make a political argument: rather, I think it is amazing how smart people such as military pilots are willing to toss themselves in the hands of Big Blue and expect to be taken care of forever. At the same time, people bitch and complain about getting a masters degree....something that will actually make them competitive on the outside. Oh yeah, and no one wants to pay for it, so we do the AMU route to check the box...Then, we fly around looking for tax frees, sweet per diem, and then expect to cruise into the airlines. Come on...we need to start marketing ourselves better and stop pidgeon hole-ing ourselves into a defined path. I'm not saying the military should screw us after serving our time, but I would hope to think that most of us would be competitive on the outside in other careers and that mil retirement is iceing on the cake. But, it takes some conscious planning and perhaps developing another skill/network while in the military in the quest for self-sufficiency...There is more to life than flight hours.

[pawnman]

I think it is kind of ridiculous for people to seriously rely on the government and expect a retirement. I am not trying to make a political argument: rather, I think it is amazing how smart people such as military pilots are willing to toss themselves in the hands of Big Blue and expect to be taken care of forever. At the same time, people bitch and complain about getting a masters degree....something that will actually make them competitive on the outside. Oh yeah, and no one wants to pay for it, so we do the AMU route to check the box...Then, we fly around looking for tax frees, sweet per diem, and then expect to cruise into the airlines. Come on...we need to start marketing ourselves better and stop pidgeon hole-ing ourselves into a defined path. I'm not saying the military should screw us after serving our time, but I would hope to think that most of us would be competitive on the outside in other careers and that mil retirement is iceing on the cake. But, it takes some conscious planning and perhaps developing another skill/network while in the military in the quest for self-sufficiency...There is more to life than flight hours.

It's not easy to build those skills when the military is tasking you deploy 6 months out of every year, and the other six are taken up by OREs, ORIs, upgrades, and mandatory training days.

If we had the schedule of the outside civilians, we could definitely compete. But with military schedules and deployments being what they are, flight hours are about all we can bring to the table. As a WSO, I don't know what I'll be qualified for on the outside...maybe I can get a defense contractor job.

[Learjetter]

There is a very good reason for the pay gap. There is far more accountability for performance in the private sector, especially as you move up the pay scale.

Public sector jobs should be about service to your country with adequate pay. It is a choice. If you want to make more money you can do so in the private sector. If you want to serve you can do so but know you will not be compensated as well.

Why not add the "far more accountability" to govt jobs, and/or reward outstanding performance with pay?

[Spartacus]

You are right, freedom is indeed not free, I think I heard somewhere that it costs $1.05. All kidding aside, I attempted to caviat the gravy train comment with a reference to federal spending in general. Fail. What I refer to is the massive entitlement culture that has been created and the fact that it cannot be sustained. What you and I consider to be worthwhile expenditures of entitlements (military pensions), others think that gay illegal alien mothers of 14 are a more worthwhile. So to get it done, everyone must take a bite of this giant shit sandwich that we have made for ourselves in order to get past picking winners and losers. This is just the beginning of the default on promises that will come from the state. Now, to play devil's advocate for a second, why is it unreasonable to expect a retiree to find gainful employment for themselves between retirement and this proposed age of 57.

There is a huge difference between working in the military vs. working in government or the private sector. Yes, the military is voluntary but once you sign on the dotted line that is it and you have given up a lot of your freedoms to serve. As a pilot you are looking at 10 years minimum before you can get out. You are subject to deployments, TDY's, frequent moves etc that can seriously degrade your quality of life. I personally have had a nice ride so far and I can think of 10 friends/acquaintances without breaking a sweat who are no longer with us most of whom died in the cockpit. Can you really tell me that this life should be compared to the private sector? Do you really think that the military should be willing to give up their retirement benefits when a lot are faced with what I have outlined above? How many times has a CEO or a bureaucrat been stopped in a store or airport and thanked for their service to their country? What those in the military do is important and is a service to the country. By taking the retirement away you are slapping the proverbial face of the military and saying that we don't think you are worth it. I guarantee you that if the retirement is taken away retention will be very low. Where would the military be then? The other thing is that the retirement is not really anything that you can reasonably live off of in your 40's without working another job anyway. Most will still have to find other jobs to support their families and put their children through college. I would then kind of think of the retirement as a supplement to ones income after they left the military and as a way of saying thanks for serving and we hope that you can still do ok in the private sector being that you are now in your mid 40's and might have a hard time finding a good paying job.

I am also reminded of what Obama wanted to do to shortly after he took office. He tried to take away tricare/healthcare benefits from military members who had been wounded in battle after they had left the military. His response was, "They volunteered for it. We need to put that money other places." This notion of taking away military retirement or delaying it smells the same to me. This is a way for the liberals to weaken the military and to take money away from it. I also tend to think that when a liberal government takes money from one place that they don't use it to pay off debt. They use it to pay for something else that they think is more important. I guarantee you that if the military retirement is taken away that those funds will be used to pay for more entitlement programs and won't be used to reduce the national deficit. So, NO it is not reasonable to ask military members to give up their retirement benefits. When Congress, the President, the Supreme Court, and all other government workers give up their retirement benefits then maybe... no, no the answer will still be no. The members of the military didn't make this mess and we shouldn't have to take a bite of the sh!t sandwich then either.

[OverTQ]

I don't know why so many people think the ARC can absorb everyone that ever bails from the USAF that wants to be in the ARC. I am especially amazed by how many pilots on AD who think they can just punch and get a flying job in the ARC the next day.

I don't think the RES can absorb it. I think it will be a thought with many of those getting out. But I think in the end, they will be lost to the total strength. I don't think many are going to have an option though. I remember the 90's. I have already heard numbers in the range of the 300's for the Army.

[Guest]

I think it is kind of ridiculous for people to seriously rely on the government and expect a retirement. I am not trying to make a political argument: rather, I think it is amazing how smart people such as military pilots are willing to toss themselves in the hands of Big Blue and expect to be taken care of forever. At the same time, people bitch and complain about getting a masters degree....something that will actually make them competitive on the outside. Oh yeah, and no one wants to pay for it, so we do the AMU route to check the box...Then, we fly around looking for tax frees, sweet per diem, and then expect to cruise into the airlines.

Couldn't agree more.

Come on...we need to start marketing ourselves better and stop pidgeon hole-ing ourselves into a defined path. I'm not saying the military should screw us after serving our time, but I would hope to think that most of us would be competitive on the outside in other careers and that mil retirement is iceing on the cake. But, it takes some conscious planning and perhaps developing another skill/network while in the military in the quest for self-sufficiency...There is more to life than flight hours.

It is not for everyone but that's exactly what I did. You will all be extremely competitive outside...especially if you have a graduate degree worth a shit. It was not hard to find a job making more than any airline captain makes...without the 10-14 days a month on the road.

Technique only.

[Guest]

Why not add the "far more accountability" to govt jobs, and/or reward outstanding performance with pay?

Same argument for improving the quality of our teachers. Great idea. Do it. Should be easy, right?

Nope.

Why?

The first step would be to eliminate 69% of the jobs.

Next step would be to set up a set of metrics people would work to achieve so that they would receive merit based pay. The pay needs to be high enough to attract real talent.

That's where we hit the brick wall. The gov't does not have a P&L. Every single office is a cost center. They are given a budget and told to spend every cent. There are no customers who pay for the services. there really is no legitimate way to incent the right behavior without radically changing the system we have in place today. That change to too radical to even seriously contemplate in anything other than a hypothetical scenario discussion...which does not solve the problem.

So, you're going to keep the system we have where the bottom half of the people are working half as hard as their private sector counterparts and, ironically, retiring with a pension funded by their civilian counterpart's tax contributions who are working for a company that has likely discontinued their defined pension plan for anyone hired in the last 6-9 years.

I believe we can cut way back on the number of people working for the government and I also belieive we can expect more from those who remain. The outcry (mostly from the unions) would be deafening.

[Guest Nemesis]

Why in the hell is this mentioned! The numbers are not there to make any differences, but let's start cutting the pay and benefits of our elected officials. This will save money in the terms of numbers. Shoot, you might as well throw retention in the hole! There are two main reasons I stay in: medical and retirement. Kiss my ass goodbye if those two areas are cut. I turned down 6 job offers in my career to keep the benefits. Military members due what the private sector does not: deployments, going outside the wire, and eating more BS. They should leave us alone and let us do our jobs. Ask any of our elected officials if they want their benefits and salaries cut!

[ThreeHoler]

Any system not allowing for grandfathering will be challenged in court just like the bullshit known as redux.

[PapaJu]

I'd like to think that this won't fly because retention will be non-existent, but you never know.

Edited July 26, 2011 by PapaJu

[ThreeHoler]

FYI--this is how our neighbors to the north do it (sts).

https://www.cmp-cpm.forces.gc.ca/dgcb-dgras/ps/pen/reg/ap-ar/scenario-eng.asp

Of course, they do allow Captains to stay in as long as they want...which provides some people who are SMEs, but as many or more slugs who are just there for the paycheck. It is a mixed bag really.

[di1630]

Correction: very little incentive to stay beyond an initial 10yr pilot training commitment under the proposed system.

Agreed. I can't imagine the affect this would have on retention in my Sq. Nearly everyone of my peers is counting down to their ADSC date when all they would have to do is continue serving for another 7 - 8 years and pull a nice little pension with health care for life.

The proposed policy wouldn't keep a lot of guys who love their jobs in let alone the guys who hate their jobs. I like what I'm doing but if at 12 yrs this was offered, I'd bail to the Guard/reserves and then build seniority at an airline while working towards a guard/reserve retirement. I/my family can take the deployments/BS with a 20yr pension at the end but without that incentive, no way.

[Right Seat Driver]

Targeting the 15 year types can be dangerous...some of the best mix of experience can be found at that stage of a career.

[ViperStud]

So a dude (disclaimer: this is me) with 9 years in and 3 to go on UPT commitment basically gets out when I can and I get a whopping 2 years of contribution matching (yawn, but it's more than the $0 I would get under the current system).

BUT, if I stay in til 20 I get ~11 years of contribution matching and a measly 12.5% of top 3. I trade 75% of my (current) pension for 11 years of matching contributions to TSP. Let's say it takes a year to go into effect then I trade 50% of my (current) pension for 10 years of matching contributions. That's a pretty big shift between when it would take effect, now or a year from now. Take it this way: for an '01 vs '02 guy (9 or 10 year point), assuming it were to happen right now, they are basically taking away an extra 25% of your pension for one year of contribution matching. OUCH.

I think they'd have to do things in a little more graduated of a manner than 5-year increments to keep some people from going postal.

I'd like to think this would never go through without grandfathering dudes, but I just don't have that much faith in our leadership (military or civilian) to not bend us over. I can already read the memo from the CSAF, some bullshit about "exciting new incentives." Sure, for everyone but the guys that actually stay in and make a career out of it.

[Dupe]

The new retirement plan would mark the biggest change in military retirement in more than 60 years and require approval from Congress

As much as I'd like to see some form of TSP-matching rolled into our retirement scheme, I highly doubt there are 218 House members willing to dismantle the current military retirement system. The proposal may make sense from a board of patriotic Wall Streeters....its simply politically not realistic.

[Spartacus]

I am naturally a pessimist so I can't help but think that this is going to happen. It seems like more than one think tank or committee keeps on bringing up cuts to military pay/benefits/retirement. In addition, look at what is going on in Washington right now. The budget and economy are huge issues and the main talk is focused on cutting spending. Naturally defense is going to take a hit. In looking at current and former Air Force policies I don't think that the Air Force is going to try really hard to take care of its people here either. I don't care how you slice it, every proposal that I have looked at to change military retirement is pretty much a slap in the face to those in uniform. I don't doubt for one minute that this could happen and we would see a mass exodus from our armed forces. For many that I talk to including myself it just plain would not be worth dealing with the b.s. and time away from family in order to not get a pension at the end of 20 years. It's just not.

[PolyestherDuck]

As much as I'd like to see some form of TSP-matching rolled into our retirement scheme, I highly doubt there are 218 House members willing to dismantle the current military retirement system. The proposal may make sense from a board of patriotic Wall Streeters....its simply politically not realistic.

This.

[nsplayr]

Although I have some doubts of rather or not this would pass in Congress, I really don't know how far the House will go these days to cut spending. The Senate will be more of a struggle to get anything like this changed. I'm also skeptical if President Obama will touch anything like this with a 10 foot pole, but maybe a second term would allow a President to consider something like this. No first termer would be wise to do so.

As one of the 83% of troops who will likely not stay 20 years, this sounds phenomenal. Obviously we shouldn't trust the AFCrimes article for the details, but if there were a detailed proposal I'd be very interested to read it. Right now I'm looking at punching at about 8 years with exactly $0 in my pocket other than my own un-matched TSP contributions that I made before switching to a Roth IRA. Any system that turns out better than that for me would be great. I don't really care about the cost savings which are being touted, but if we can come up with a system that is more fair and rewards member contributions and gives further bonuses for undermanned or high-demand career fields versus just staying alive and breathing until 20 years I say we're moving in the right direction.

Those planning to stay to the 20 years and get the very generous current retirement system will obviously not be as excited...

Edited July 26, 2011 by nsplayr

[hobbitcid]

OK - the 20 year retirement is designed as a retainer,not a retirement per se. The idea is that by taking the retirement check, you place yourself in line for reactivation should the nation require it. Doesn't happen but it can. So why 20 years? Well, for this we go back to the reason fora young service. When 20 year career was developed, there was a lot more gruntwork requiring young, very fit service members able to keep up with the demandsof infantry, flight in un or poorly pressurized cockpits, hot bunking on ships,etc. Since WWII we have moved more into a technologically service orientedforce that requires more brain power and less brute power (some career fields exemptedof course - infantry, tactical aviation, special ops, etc.). This means that servicemembers are not only more valuable longer but are more valuable over time(experience). So while a 42 year old infantryman may be struggling to keep up with a 22 year old infantryman, a 42 year old acquisition specialist is running circles around a 22 year old newbie just out of tech school. And will be for the foreseeable future. So in essence, the need for a young force is less important now than it was in 1950. In some cases (acquisition,intelligence, logistics, maintenance, etc.) older is probably better and by age 42, the service member in question is likely at the peak of his or her proficiency and therefore a very valuable commodity.

The other reason for the 20 year retirement deals with the military culture andhow our careers evolve. We generally move every 3-4 years and have a few remotes/six month deployments and several PCS schools (e.g. PME, Tech School, UPT, RTU, etc.) over a 2 - 24 year period. This means the typical military family (member and spouse) cannot generally build deep roots in any community they live in. Even if they buy a house they live there for only 3-4 years then it's on the road again. For spouses this means no second careers. Even spouses with portable jobs (e.g. teachers, nurses) have a hard time maintaining a career as they move from one location to another. As a result, by age 38-44 the typical military family (member, spouse and now probably 1-3 teenage kids) will have less than 3-4 years on station when the member retires.

Now contrast that with the neighbour who has lived in the same house and worked in the same area for the last 20-22 years. That family unit probably has paid down their house significantly, both spouses probably work and have viable careers and the family has established lifelong friends and connections. This means the military family at age 42 is essentially starting where the civilian family did 22 years earlier. And you don't get those years back. The military member may find work paying the equivalent to his or her former position but not the seniority. In this case, the military member is starting at the bottom. For the spouse its worse. He or she has been off the career track for 20-22 years and now must start over competing against other candidates more than a generation younger. So you have a new house (with a full 30 year mortgage), two new jobs (one at absolute beginning status) and live in a community that maybe wonderful but is alien and will take years to really integrate into. Who would do this to themselves voluntarily?

The answer is "the military" and primarily for the retirement. The immediate support of the retirement check and medical benefits is a cushion allowing for an easier transition to the civilian world. While you don't get rich off of retirement it will generally pay the house payment, the utilities and the car payment. After that, all you need to do is cover food - and youcould do that as a greeter at Wal-Mart. Not that most military would do this... It is however an option. So if retirement was taken off the table with a general promise of less money at age 57 but not before the rank and file are going to bail. If they go through with this 10 year retirement at 57 it will be even worse. There is no incentive to stay past 10 years since you are vested and you won't get your money earlier anyway. In fact staying the extra 10 years would be devastating financially as the member could have made far more and paid off more of his or her house/cars etc. in that next 10 years. Simple economics...

So if the committee wants to really change the retirement system, they really need to change what a military career is. For this, we need to discard the notion of a need for a young service. We also need to discard the "up or out" policies we have now. In short, like many of our allies a military career is something you do for life, not for 20 years before finding something else to do.

Proposal - set the mandatory retirement age at 57 - all officers are fully qualified to Lt Col all enlisted fully qualified to MSgt. The cream as always will climb to the top while the rest will fulfil their careers moving from tactical to staff and training positions over time. In some services, the pilot force is managed in this fashion - in Sweden for example, all pilots are supposed to be fighter pilots in their "youth" progressing to transports and helicopters as they get older. Those who want to leave and fly for the airlines do so but at a loss of retirement benefits. Several NATO allies have an all or nothing retirement program that requires their members toreach age 55 before retirement. At least one NATO member even restricts retirees from taking on new work by reducing their payments by the same amount they receive from their new position (discourages the military to contractor revolving door).

There are some benefits to this plan. The biggest being the re-branding of a military career as a calling versus a job. Unless the member wants to be CSAF there is little need for the careerism we see today. Members would choose jobs according to AF and personal needs and desires versus how it affects their careers. There will be less pressure to get promoted "on time" allowing for more broadening of careers and longer assignments (5-6 years). You still have the spouse issue, but since the member is staying in one place longer, there is less disruption. Moreover, by the time the member is ready to retire they are more likely to be grandparents than parents of school age children - even less disruption. And finally - retiring at age 57 means the retirement package starts right then allowing for a better transition.

In my opinion, the establishment of a career to age 57 is critical to any changes in the retirement system. If the government decides to simply move retirement to 57 and high five then the exodus will be huge. Mainly because military members simply aren't crazy or stupid enough to place themselves and their families in the position of starting over at age 38-44 with nothing but a promise and a plaque. It's just not fair. This is common sense...

Just my thoughts

Hobbit

Edited July 26, 2011 by hobbitcid

[Rifleman96]

The gov't has been raiding the federal employee 401k plans for funds. I seriously doubt this pot of money would be untouchable as well. Just another disguise for the gov't to create a pot to raid from.

[nsplayr]

The gov't has been raiding the federal employee 401k plans for funds. I seriously doubt this pot of money would be untouchable as well. Just another disguise for the gov't to create a pot to raid from.

Which is what happens when you blow through the first deadline on the debt ceiling and ask the Tressury Department to use "creative accounting." We would have defaulted already if they hadnt used some of the money in those accounts. As soon as that silliness is over the system will pay it back.

On topic - hobbit, that's some smart stuff. My changes to what is being proposed are to both grandfather in any active member including guard/reserve if they so choose and to give new recruits the choice of the current system or then new one. That way haven't changed the rules mid-game on anyone more than you have to and you can ops test the new system on a smaller group of folks who choose rather than diving in head first and hoping for the best. If the goal is to make a better system that's the way to do it; if all you want to do is save money than by all means leap before you look

Cutting budgets has consequences and messing with the mil retirement system in the wrong ways is potentially one of the big risks when you slash and burn just to save a billion here or there.

[dream big]

Obama will be up for re-election in just 15 months. Cutting the retirement benefits would be a major if not one of the biggest targets on his back if he were to sign off on this bill, not to mention the congressmen/women who would have to vote for this without atleast a grandfather clause. I'd like to think we are okay for now, at least until 3 November 2012...

[Rifleman96]

Which is what happens when you blow through the first deadline on the debt ceiling and ask the Tressury Department to use "creative accounting." We would have defaulted already if they hadnt used some of the money in those accounts. As soon as that silliness is over the system will pay it back.

On topic - hobbit, that's some smart stuff. My changes to what is being proposed are to both grandfather in any active member including guard/reserve if they so choose and to give new recruits the choice of the current system or then new one. That way haven't changed the rules mid-game on anyone more than you have to and you can ops test the new system on a smaller group of folks who choose rather than diving in head first and hoping for the best. If the goal is to make a better system that's the way to do it; if all you want to do is save money than by all means leap before you look

Cutting budgets has consequences and messing with the mil retirement system in the wrong ways is potentially one of the big risks when you slash and burn just to save a billion here or there.

How is identifying a major flaw in the TSP 401k plan off-topic from this discussion. This is a serious aspect to consider with this proposal for a retirement plan fix. And it seems you really do have too much faith in this government that they will replace the money that they took out of the Federal Workers 401k. Kind of like they are going to pay back the money they borrowed from the Social Security pot of money.