Posted on 08/16/2011 6:57:09 AM PDT by clove
A Pentagon task force is proposing the largest overhaul of the military retirement system in 50 years that will do away with a traditional pension system, opting instead for a 401(k)-style contribution program.
Under the newly proposed Defense Business Board plan, all troops would receive yearly retirement contributions if they served at least 20 years -- a stipulation of the existing system. The money, however, would not vest until service reached at least three to five years and would then be payable at retirement age. If personnel left before that three- to five-year mark, the time served would be rolled over into Social Security.
The central feature of the new DBB proposal would be a mandatory “Uniformed Military Personnel Thrift Savings Plan (TSP)” in which the contributions by the Department of Defense and the individual service member would be deposited. There is already a TSP program in operation, established by Congress in 1986 for both federal employees and service personnel. But those TSPs are voluntary and only include employee contributions.
The new TSPs -- functioning as a 401(k)-style account -- could include a government contribution amounting to as much as 16.5 percent of the member’s annual pay, as well as a maximum annual tax-deferred contribution limit of $16,500 by members. In addition, there is a $5,500 annual tax-deferred “Catch-up Contribution” for service people age 50 or older, and adjustments for those serving in a combat zone. The proposed DBB retirement program would not impact disabled veterans or current retirees.
(Excerpt) Read more at foxnews.com ...
As long as the money is removed from the reach of congress, but given the current projections, there will not be any retirement, the government will be taking all your money to service debt.
It’s not smart to mess with the troops. They got guns! Big guns!
Want to gut the military? Screw with the retirement.
My son-in-law is in the Army, an infantryman with 12 years service. He’s quite worried about this, and says the retirement is one of the biggest things that keeps him going.
If this adminstration is stupid enough to do this, you can kiss the all volunteer service goodbye! They’ll hafta hire mercs to defend our national interests.
SFC, US Army Retired
Good, what is good for the goose is good for the gander.
Then eliminate traditional Defined Contribution Plans for all Federal Employees BUT 1st TO GO IS THE HOUSE AND SENATE, with a 5 yr vesting rule for matching....
Add the POTUS while your at it....
Say goodbye to the all-volunteer force and maintaining a professional career force. With a family, I would have never considered remaining in the military for a career if the retirement system had not been what it was. As it was, even junior officers were at the low end of the salary spectrum when compared with their civilian counterparts. It was not until I pinned on major as a prior enlisted troop that we felt comfortable from one month to the next. From what I heard that the savings would be, more savings would be generated if we just literally threw out all illegals immediately and made them take their underage anchors with them.
Who are the Democrat appointees now working in the Pentagon?
This is universally unpopular with every blue-jacket I know and will cause a mass exodus from the services.
Mission Accomplished. That's precisely what the liberals want....they know mostly patriots serve in the armed forces....can't have that...they want to turn it into a "Global Force for Good", and make it the biggest social program there is.
This might not be a bad deal for the troops, depending on how it is structured.
However, unless the contributions are made in cash to an outside agency, and if “payments” are in the form of IOU’s like Social Security is funded, then this will never do.
The devil is in the details, and what form this takes is ultimately up to what actually passes Congress. I’ll hold of final judgement until I see the actual legislation.
funny how no one’s talking about the public sector employee pensions. just military.
by far, the vast majority of the waste is in pensions to bureaucrats
Oh good... politicians using the Pentagon as a proxy get to shovel huge amounts of cash to Wall Street bankers and select businesses.
What could possibly go wrong?
Oh, THERE’S a good idea.
Congress et al (the gov’t.)just doesn’t tune in to the fact that one of their only true reasons for existence is national defense (yes, over and above redistributing wealth).
Not true...my TSP has an employer match, 100% up to 5% of salary.
As one who "hung around" for only 8 years, this proposed system would be a major improvement for those who serve less than 20 years. When I got out, all I received was my honorable discharge.
This is part of the plan. The hippies got nothing to protest with an all volunteer force. The biggest commies have been trying to bring back the draft for decades now. Once that happens, the hippies can get their protests cranked up......
You should have finished up in the reserves. The pension system is designed to make qualified personnel stick it out until 20, in some form or fashion.
And the military is one of the few governmental things that actually works. Leave it alone.
As a retired officer, I would be very concerned. Anyone who bets their retirement on a stock market based fund is taking a big risk.
On the other hand, being paid solely from tax revenues has its risks as well.
I am involved with a group of young Army captains, who all are looking at varied lengths of service, from “getting out once my (MSO) obligation is up”, to full reitrement at 20 or more years.
None of them are too happy about the market based plan.
My advice to them and you- invest in resources and assets that will help you in the long run-not the short run (cars are short run stuff-expendable goods). Continue education, buy durable goods and assets like real estate (the market is pretty favorable for buying now) and stay out of debt (all acknowledged they have some degree of credit debt, uh, oh) and accrue some cash savings-a diversitifed method. Oh, firearms and heavy metals.....
Perhaps a hybrid plan where they earn partial retired pay (it is not a pension, BTW), and have an option on the contributions made to said 401k.
As for the rest of us “retired” military types, forego taxable status-make it worth what it is, a retainer pay program (officers are liable for recall pretty much indefinitly, while NCOs are on for five years past retirement status).
We need to insure the BEST abd BRIGHTEST of our youth seek out the military, it IS a matter of national survival in the long run.
Protect military programs and incentives by cutting (with a chainsaw, if need be) programs of unearned entitlement that eat out our substances and provide no return on investment as well as reducing the minions of the bureauocracy that serve nothing other than to serve themselves.
God Bless our Troops.
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