Ending the 20-Year Military Retirement: Buyer’s Remorse?
Jonn’s written previously here at TAH about that new military retirement plan the current gang of fools and tools running the show in DC Administration conned Congress into passing convinced Congress to approve. The bottom line: the former 20 year military retirement plan goes away, effective for people entering in 2018, in favor of a “blended” plan much like Federal civilian employees have today. (Ask most Federal civilians how much of a “good deal” the current Federal retirement system is compared to its predecessor, CSRS – which was somewhat similar to the military’s 20 year retirement. But you might want to be prepared to get an earful at high volume when you do so.)
A major criticism of the “new plan” before it was approved was that it made early service too lucrative, and that this would lead more troops to bolt early – resulting in a loss of experience/expertise. Well, guess what: the Pentagon apparently is now having second thoughts for precisely that reason.
In this year’s Defense Budget Request, DoD has proposed modifications to the changes implemented just last year. Bottom line is that the newest proposed changes are designed to keep people in the service by making later service more attractive than earlier.
Gee. Seems to me that’s kinda exactly what the 20 year retirement did. Except IMO it did it much better than either this new “blended system” or the latest changes DoD proposes to same will.
But heaven forbid DoD admit it goofed and backtrack, even when it makes perfect sense to do so. Just look at the F-35!
The Army Times IMO has an article giving an overview of the Pentagon’s latest proposed changes. It’s a bit longish, and the overall situation is somewhat complex. But if you have interest it’s certainly worth a read.
Category: "The Floggings Will Continue Until Morale Improves", "Your Tax Dollars At Work", Disposable Warriors, Military issues
Dumbasses
These phony communists sucking the tit of the illuminati WANT the military to fold, just as they want everyone unarmed, so they can step in and take over the country! How many people are going to put up with the military for more that 20…you want to work in that situation until you are 65? hell no, no one else does either..just what the commies want and expect!!
Frickin’ morons!!
“Administration … convinced Congress to approve”
Really? What a bunch of push-overs them congress critters be!
Could fuck up a Free lunch
Could fuck up a wet dream…
TANSTAAFL.
I have a better idea. Ditch this plan, bump up base pay, let the groveling lower animals decide what they want to do with their lives, and keep the re-upping bonuses coming.
Oh, no – that doesn’t keep people interested in remaining as employees.
Here’s another idea: bump up base pay and… oh, never mind.
I could tell you stories.
BOHICA.
The privatization movement is grand isn’t it?
And worse, it has not saved the government a dime. Almost every privatization program so far has either ended up costing more than the program it replaced or was simply a means to end a program and transfer public assets to private hands for pennies on the dollar.
This one is an idiotic decision. One of the things veteran pension programs do is keep veterans generally loyal to a government and the status quo. Their livelihoods depend on it in many cases due to the pension. The loyalty to the government means that when things are bad and there is a crisis of public perception of legitimacy in government there isn’t a political demographic that is martial trained and knows how to mobilize standing in opposition to the regime.
Governments have learned this lesson the hard way.
Don’t piss off the guys with all the guns, tanks, planes and ships.
Taylor, I don’t think changing pension terms qualifies as a form of “privatization”. That term generally refers to contracting out functions formerly performed by government employees.
Privatization makes sense when the function in question isn’t inherently governmental – like, oh, janitorial services or landscape maintenance. However, being a member of the uniformed military qualifies as an inherently governmental function.
Last time I checked, the
fools running the show in DCcurrent Administration hadn’t proposed hiring private mercenaries in lieu of soldiers. Yet.Soon, everyone enrolling in TSP will be ‘voluntold’ which plans they must select. Selection will be limited and all choices will have some connection to various members of the clown crew in DC.
“Last time I checked, the fools running the show in DC current Administration hadn’t proposed hiring private mercenaries in lieu of soldiers. Yet.”
They don’t propose it, as that would imply at least some level of transparency. They (as well as the previous administration) just do it.
“One of the things veteran pension programs do is keep veterans generally loyal to a government and the status quo.”
Which is the best argument against ANY programs of government subsidy or assistance. Glad to see you’re on my side on this one!
Now, military pensions are a different story, as we’ve discussed many times here. Precis: by serving in the military, you give up at least 20 years of developing a civilian career, often not starting it until your 40s or 50s – an INCREDIBLE disadvantage. You often give up your health as well, limiting career options. You do this in exchange for a deal that includes health care coverage, as well as a pension. It’s a fairly and freely negotiated deal – not perfect, but pretty good. One of its worst aspects, of course, is what you wrote above: “One of the things veteran pension programs do is keep veterans generally loyal to a government and the status quo.” But happily, folks willing to lay down their lives for their country are generally predisposed NOT to engage in military opposition to the government, NOR to be intimidated into blind supplication for a paycheck.
The Kneepad Wearing Perfumed Princes of The Five Sided Puzzle Palace strike again.
More “fuck the Vets any way we can” games from the blubbernecked pus-nutted snot-spined booger-eating minions of the Great Brothel on the Potomac. When have they ever even remotely considered cutbacks on welfare or handouts to illegal aliens or any other thing used to buy dhimmirat votes with our tax money, when has any elected member of that brothel ever even remotely considered cutting back on the perks and luxuries they enjoy on our dime?
One has to wonder if those responsible for making these sorts of decisions received their human resources degrees from the Business University of Qatar…
So eliminate the most inviting aspect of 20 year retention of skilled troopers…check.
Eliminate incentives and alter benefit packages post-facto…check.
Write idiotic fucking articles about how troops would be better off being paid less….check.
Enter combat with ROEs that only a POG asshole 8,000 miles away could be believe were in any form realistic…check.
Generally make serving as uninviting as humanly possible….check.
Press back of exterior cranial skull firmly, forcing head to lodge deep in ass….check.
Write long, though provoking article on why retention seems to be slipping among experienced troopers and cadre…check.
Prove to entire nation you have no fucking idea what you are doing…check.
The defense rests, your honor.
…remove promotion points for deployment time, so slick-sleeves who were able to get to schools are more likely to be senior to those who were too busy doing the actual job…
Play Stupid Games… Win Stupid Prizes
Nuff Said……
When I enlisted in 1967, E-1 pay was a whopping $97.00 pre-tax per month. I have no idea why anyone needs more than that. Do you?
I came aboard in 1968. Google said I made about $109, which I thought was outrageously generous of the government. Three hots, a cot, medical care, etc. I scrimped by and lived a pretty good life.
The 20-year retirement plan was a godsend. I’m thinking what I say next may probably apply to many career military personnel: I didn’t even much know/consider/care about being able to retire in 20 from the getgo. I’m sure that was a recruiter’s selling point, but 20 years to a teenager seems an eternity and maybe even undoable. I didn’t join with the thought of doing 23, but I soon realized I liked/loved the environment, job, and people, and found being a Corpsman very fulfilling.
Well, even though I’m a 20-year-man myself (albeit a “gray area” retiree from the National Guard) I’m going to disagree with the general wisdom here and say that the 20-year pension needs to go. IIRC the 20-year-pension system dates back to WWII or thereabouts (corrections welcomed) at a time when (a) we were faced with an unprecedented crisis and when (b) “defined benefit” (i.e. pension) retirement systems were pretty common for both public and private sector employers. Fast forward to today when we don’t need a 16-million-person military like we had in WWII AND when virtually every employer, public and private, has gone to a “defined contribution” plan (i.e. a fund that you pay into that your employer also kicks in a matching amount and that is tax deferred.) In today’s economy, a “pension” is an anachronism, a throwback. As you pointed out, even the Federal civil service employees no longer have pensions, nor do most state and local government employees. Yes, some police and firefighters still have pensions, and guess what? Those pensions are bankrupting the municipalities that have them. Anyone who enlists in the military today has never lived in a world where pensions were common, so there’s no reason to think that the lack of a 20 year pension would be a “deal breaker” for new recruits. Furthermore, the “all or nothing” aspect of the 20-year pension is a slap in the face to those who might want to choose to serve less than 20 years. In the private sector they’d at least get matching contributions to their 401K that they could keep once they were past the vesting period but in the 20-year-retirement system of the military the soldier/sailor/airman/marine who serves 10 years gets diddly squat towards his retirement. And finally, how many of us had to deal with the dead wood, the time servers, the Retired On Active Duty slackers who occupied jobs that could have (and should have) gone to better people, just so they could get their 20 in? And most of them weren’t even reticent about admitting it. They’d openly say “I’m… Read more »
What’s tis?
A part time walliol giving advice to the professionals who dedicate their LIVES to military service?
I got 9 more years to retire and do you know what that retirement is going to do for me? Help me out a little to enter the civilian workforce, after being out for 20 years serving my country while civvies build their careers.
So eff you, buddy.
You haven’t been around long enough to come to know this motley crue, so if you could, please leave the insults at the door when it comes to talking to TAH regulars like martinjmpr.
Thanks.
He didn’t say he did 20 in the Guard. For all you know he did 14 RA and finished up the last 6 in the Guard – you’d be surprised how often that happens, “old timer”.
Non-mobilized active duty (i.e. AD that I signed up for) was just a bit over 10 years. 13 years in the Reserves/National Guard but that includes 3 RC mobilizations: Bosnia, 97-98, Afghanistan, 2003 and Kuwait, 2004. Total active service time is 12 years, 2 months. Reserve time is 11 and some change.
You fucking walliol.
Actually, term of service retirement for enlisted personnel has been around as a legal entitlement since 1885 (Army, USMC) and 1899 (Navy). The requirement at that time was 30 years of service; retired pay was 75% of base, plus some allowances.
Over time (1916 for the Navy and USMC, uncertain for the Army), minimum required enlisted service to qualify for retirement was lowered; it became fixed at 20 years for the Navy in 1926. It’s not clear when 20 years became the Army’s minimum voluntary retirement age for enlisted personnel.
Officer voluntary retirement authorities appear to predate 1885, and have varied greatly over the years. Generally, in the 1800s 30 or 40 years of service were required before an officer could retire; for much of that time, retirement required Presidential approval. The required service dropped as low as 15 years for Army officers between World Wars I and II (large number of officers entered during World War I and stayed). The 20 year voluntary retirement entitlement became standard for officers post-World War II (1948).
Since the early 1900s, 2.5% per year of service has been the rule for retired pay.
http://www.dtic.mil/dtic/tr/fulltext/u2/a348433.pdf
And IMO you’re off base with that “slap in the face” bit. Barring medical or other disqualification, virtually everyone who leaves the military prior to qualifying for immediate retirement has the same option the two of us chose: continued reserve service. Different system, different rules, different pension. If someone willingly chooses to forego that, well, that was their choice. By opting not to continue their career in the reserve components, they voluntarily chose to “flush” their past military service when they could just as easily chosen to retain retirement credit for same.
Hondo,
Thanks for pulling the NPS paper up, its probably the best history of the retirement system out there.
I’m not a huge fan of the new system, and had suspicion that there would be a move to delay the government contribution until what is ostensibly a service members 2nd term of service. 80% of all attrition occurs at the end of the first term of service or officer ADSO, so this eliminates any cost for 80% of the recruited force.
As a taxpayer I’m well aware that the retirement system as current structured is somewhat out of balance, but no one wants to talk about the two major reasons. First, we are paying the retired pay (and VA benefits) for the members of the Cold War military of 60s-80’s which was more than double the size of todays force, so of course the aggregate payment to those folks looks huge when compared to current active duty pay.
The second aspect is that former service members are living longer healthier lives. When the 20/30 year career was established in 1948 the average life expectancy was 65.5 years. The retired payout on an O-6 was likely for only a dozen years. Today, that O-6 is living to 80+, so the payout is now 30 years.
The problem here is that We The People (aka Congress) haven’t gone back to look at the base assumptions that underpin the entire manning model of the Armed Forces. What is the appropriate career length? How do we compensate, promote, and utilize the personnel we train?
“Yes, some police and firefighters still have pensions, and guess what? Those pensions are bankrupting the municipalities that have them”. Well, if that’s the case, it’s because the government entities, in most cases, spent money they were supposed to be contributing to the pension funds. In many states, those pension funds have gone to court to force cities, counties and states to pay what they haven’t been paying.
I draw a pension from a police-fire pension fund, it’s over funded. Because the trustees of the fund refused to allow the city to “borrow” from the fund, and they refused to let the city slide on the payments they owed, when they owed it. And, because the trustees went to people who know what they’re doing when it comes to investing money. Now, the city cries when they have to make the payments. But, they’re legally bound to make those payments.
Most pension funds that are “bankrupting” cities and states are doing so because the cities and states did two things: First they borrowed from the funds to pay for porkbarrel projects and Second, they allowed cities/states to skip payments (or over estimate growth).
My states pension fund for teachers is underfunded – in that the amount of money they expect to have in the fund over the next 30years will be less than the money they expect to have to pay out over the next 30 years. They have enough in the fund now to pay out everything promised for the next 11 years then what is being put in will be enough to cover 65% of what is going to be owed.
The teacher pension is broke because the state allowed districts to skip payments over the years and when they “made up” the payments were allowed to assume growth from investing in stocks of 8 to 10% a year, in 2009 to 2014. Gee, guess what, the managed 4%.
The result now is a pension fund that is short $2.5 billion and even though teachers have made every payment they were suppose to under contracts they had with the state, the “problem” is those greedy teachers (who are exempt from Social Security taxes so most won’t be able to draw Social Security). And the current leadership is demanding that teachers – including those already retired – take a 40% cut in their promised pension, what they budged and planed for.
Those on here (there is only a few) that say we should get rid of it so we don’t hurt people that do less then 20s feelings can eat a bag of dicks. I’m sorry if getting paid to learn a skill, free medical, fee housing, free food, a free education that also pays you housing after you get out (post 911 go bill) isn’t enough for you. Fucking ridiculous. I’m over half way to twenty and you better believe it when vets say that is a big factor for staying. And I also have a decent amount going to tsp, so yes I’ll take that too. Thanks Army.
The Soviet Union had, and most banana republics have, a military that consists of well paid officers, and conscripts or poorly paid volunteers, with not much in the middle. I always thought the strength of our military was the strong experienced NCO corps, who provided continuity and actually knew WTF was really going on. The twenty year retirement was a big part of that.
I have to respectfully disagree with our NG brother. After 20 years I’m ready to go. I also have 4 in the Marines so after a total of 24 I’m very happy to do something else. I’ve moved an average of once every 2 years. 4 combat deployments and a peace keeping waste of time later…its time to go. Most don’t enlist or serve for the benefits initially but as you get closer and real life starts to seep in and you realize the Service no longer wants you..that retirement check and medical feel more like a right then a something you got for the opportunity to serve. I can’t say I loved every minute of it but there was a war on and I felt I had to stay on board. Now I’m done and as Ray Liotta said in “Good Fellas” F U, pay me. Keep things the same.
I spent just under 9 years in. I got out with nothing.
If I had stayed a civilian, I would have had something in the form of a 401k from a civilian employer.
The military is a pyramid. By default, you’re going to have high turn over in lower ranks. All those who don’t make it to 20 leave with nothing. This puts the military at a disadvantage relative to civilian employers.
Maybe, maybe not. Not all civilian employers offer 401k plans, and of those that do, not all offer any level of matching.
If any of your service was since around 2000 or 2001, you had the opportunity to participate in a 401k plan while in uniform. It was called the TSP-U.
Unless you were medically or otherwise disqualified, it was your choice not to continue serving in the reserve components. Seems to me that capturing 9 years of pension credit (22.5% of base pay at retirement) would have been worth 11 years continued reserve service. Apparently you didn’t.
1990 – 1990
After 9 years active, I had no Reserve commitment and your explanation above is far better than anything I ever got while I was separating.
I’m sorry to hear that, amigo. You should have been given that info when you decided to leave active duty – so that you could have made a more informed decision.
You might have made the same decision. But either way you’d have made the decision with better knowledge of your options.
Holdfast- If you’re <49 years old, you can still go back in the Reserves (or NG)and complete the other 11 years you need to get a 20-year retirement.
Keep it the same.
Like a Jr. Troop who doesn’t get paid much to begin with is going to have the wherewithal to save. Let’s see party this weekend or dump much needed funds into the 401k to get the max amount of time and interest for future. Yeah I know what I would have chosen.
Well, I’m drawing retirement and my GI Bill benefits…so obviously, I’m not unbiased.
I am however, very thankful for being able to serve and receive my benefits. I hope others can also reap the benefits after having the privilege of serving.
Entered 1965, discharged exactly four years later. Had my share and wanted no more. Was not cut out for that type of career in which the Corps (or whatever branch you served in) came FIRST. BEFORE FAMILY was a killer for me. No regrets, but that was not to be my lifestyle. During my four, I did notice one thing occurring during those particular years. There were quite a few getting out with even 12 or more years because they could not deal with the ever-increasing chances of having to answer for disciplining a member who could throw the “card” at a senior member. They easily stood to suffer because they could no longer demand respect for the office by juniors who knew they could play the “card” and get by with it. All the way to the top it became clear that the politicians wanted to remain in office and catering won votes for themselves.
I ran some ruff numbers in excel. IF you assume 0% inflation – a dollar today is equal to a dollar in 20 years – or some at rate of inflation pay raises. And you assume that you have a ruffly steady rank progression: E4 in 3 years, E 5 in six, E 6 in 12 and retire at E6 (which i’m told is the most common rank to retire at but have no proof of this other than what i’ve seen) You get the following: First two years the Gov puts in 1%, Year three you can put in up to 5% of your pay and they will match up to 5% – the 1%, dollar for dollar up to 3% and dollar for two dollars from 3% to 5%. At that point you’re running two funds the government contribution to your 401K and your 401K. At 20 years they do the pension formula of 2% a year, or 40% of High 36 months. Ruffly $17k a year (when doing the assumptions) You have put in $34,000 into your 401k and they have put in $27k. Ok so far it sucks. BUT they make it look good by “Assuming an 8% a year growth” on top of inflation. Because 401k’s always get 8% or better? IF that happens, you can’t touch the money till your 59 1/2 (as of now) so the 8% fairy would have you looking at $927,000+ to use to match your pension, which if you took out $29,000 a year would never go down because at $900k and 8% a year growth is more than $29k plus your $17k, is $46k a year. Not great but not bad. BUT if you took a more realistic 4% growth, at 20 years you have a combined growth total of around $88k, and at 59 1/2 are looking at $310,000. If you drew out $29k you run out of money in 12 years. (So I guess you have to hope you die before you’re 70.) They sell it as a great deal, the reality is it is not.… Read more »
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I am so grateful for my retirement benefits after 24.5 years of active service its hard to even express it adequately.
I have a VA clinic 22 miles from me that is brand new and staffed with truly caring people.
The Truman VA hospital in Missouri has been a great experience and I have zero complaints.
In a month and a half I will graduate with a college degree via the Post 9/11 GI Bill and as a HS Dropout ( of course I got my GED decades ago, graduated from numerous military schools etc.) it will be the first time I ever have walked in cap and gown (and I am 55).
I have life long friends and we stay in touch to this day and I consider myself as part of the warrior class.
Then I look at this new system and I wonder; are we destroying that mind set? I mean, will the net result be that we are creating a corporate mindset rather than a band of brothers who share a common life long loyalty and commitment?
Even a Soldier who only served one tour today did so with no thought of any ultimate reward other than serving and if a Soldier does ultimately became a careerist it is usually unplanned. How many will now be tempted to stay as long as they can hack it to build up their 401K and then bail when the lean times come or the wars start?
I don’t know the answer or know if this is even a real concern but something just doesn’t feel right about this change.