Skip to comments.Inside the military pension cutback
Posted on 12/28/2013 9:10:40 AM PST by TurboZamboni
A little-noted feature of the recent budget bill, together with wrangling in many states over public employee pensions, raises a question that has economic implications as well as legal and moral ones: Are defined-benefit pension plans explicit contracts of compensation for work performed, and, for military and public safety personnel, perils undergone?
Or are they a voluntary favor granted by employers as a gesture of gratitude that can be withdrawn at any minute?
The military pension question is the one most currently in the news. The budget compromise includes a provision that reduces the annual cost-of-living increase for those retiring from active duty. Through 2014, the current system will remain in force; its annual cost-of-living increases are based on the same consumer price index (CPI) used to adjust Social Security.
But starting in 2015, the adjustment will be 1 percentage point less than this CPI increase for military retirees in a certain age bracket.
It will start at retirement and continue each year until retirees reach age 62. At that point, their payments will jump up to what they would have been if they had gotten the full increase each year. And they will increase by the full change in CPI from then on.
(Excerpt) Read more at twincities.com ...
For your ping list consideration, thanks for keeping us up to date.
One thing differnt about “retired” pay for the Military is it’s not retired pay...
...It’s reduced pay for reduced services.
“Retire folks” are subject to recall - something civilians are not.
Happened to some folks during the first Gulf War and the War on Terror.
Doesn’t happen a lot but it does happen.
And for the Active folks there is “Stop Loss”. If you have a needed MOS you are extended until they don’t need you any more.
I always considered my retirement as part of the total pay compensation package - period. The ability to retire after 19 years 6 months came about as a policy decision made after WWI when the US decided that it wanted young men in the Armed Services not old men as in the European Armies. The personnel currently serving should not be penalized for this decision - which probably was a good one. The US did prove itself to be the most powerful country in the world for many decades (until incompetent leadership made it otherwise.)
In the case of Detroit, one sees the results of incompetent, corrupt leadership. Sin in haste, repent at leisure.
having said that, it was a stupid decision and continues to be a stupid decision to "promise" such ridiculous pensions at such young ages....just financial insanity....
if people insist that they need pensions, then they should draw them only at later dates in their life...like age 60 or 62...
in the obits section I've come across a few 90 yros "retired" from the military after 20 yrs...which means they were drawing for 50 yrs....FIFTY YEARS!
having had both parents in the military, 3 brothers, two brothers in law and one husband, not to mention many friends, we know there are dangerous jobs and then there are MOST of the jobs which are not dangerous...no more than police or fire or iron workers working on sky scrapers...and the military is voluntary...
you can't be financial conservative and still not consider ALL govt pension systems have become corrupt and unsustainable...
Dear Mister Ed: thank-you for giving us your opinion on whether the COLAs for the retired Veterans could be reduced. You have a great grasp of the obvious. You are doing the bidding of your Democrat masters and trying to throw up a smokescreen on this issue because you apparently wore a uniform for a time. As an economist, you should have a better understanding of how budgets work. As someone writing for the pioneer press, you should have a better understanding of how Democrat politics shape the budget. What was the financial reason to take the COLAs away from the retired Veterans? To reduce the deficit. Nope. To balance the budget? Nope. To give the taxpayers some money back. Nope. The “Compromise” that EVERY Democrat Senator voted for was to take money from the retired Veterans and give it to HEADSTART and Education. My goodness, Ed.....you work in Education, don’t you? So, with no financial consideration, but 100% Democrat vote-buying consideration, the US Congress decreed taking money from retired Veterans to give to Democrat supporters. You are an embarrassment to your degree and your profession. Any school that would hire someone so inept should have no students.
So those of “working age” post military retirement, are to suspend the compensation in hopes that it will be there when they “retire”? And only if they “need” them?
Who determines the “need”?
Who determines the “working age”?
Who determines the retirement eligibility date?
Who determines whether or not the compensation is even still available upon the retirement date?
The example you gave is a poor one...the amount those folks were drawing for the past 50 years were a pittance compared to the lavish and exorbitant “entitlements” we taxpayers “give” to the “gibsmedats”.
I will gladly go quietly into the night along with the rest once the entire system is affected...not just those who served.
Keep in mind as well, since you apparently “forgot”, the “compensation” package is used to lure and entice good people to serve...it’s deferred, assuming of course one decides to make it a career...but not all do or can...the military uses these packages in hopes of increasing the pool of recruits to pick from...
I tire of posts like yours using faulty logic and fallacies to make it look like all the military are complaining about getting cut...what we’re pissed about is that it’s ONLY the military getting cut...AGAIN!!!
Unless a written contract of some sort says otherwise, they are most often “a voluntary favor granted by employers as a gesture of gratitude that can be withdrawn at any minute?”
There is a reason military retire at such a “young” age; based on rank, military are only allowed to retire at 20 yrs if they reach a certain rank. People need to look into the military retirement system and notice what “ High Year of Tenure” means. Many active stay as long as they are allowed. How many critics have spent time in the military? What kind of shape are many in when they retire? Don’t compare active and guard pensions, 2 different systems. I retired after 22 yrs active duty in the Air Force. Many do not have a clue what they are criticizing, especially congress. I suggest talking to a military retiree and get the facts.
Active Duty/Retiree ping.
Defense of the nation is one of the main reasons, if not the main reason, for national government. It is provided for in the Constitution.
The reason military pensions are a problem today is the legions of fat civilians in the pay of the federal government that have no basis whatever in the Constitution. If you first abolish 80% of federal “jobs”, including contractors, then we could talk about military pensions.
Until then, go ahead, cut military benefits. And cut you own throat while you are at it. It will save time for the soldiers of the nation that takes over the North Amercian continent after we are gone.
I agree, “Dont compare active and guard pensions.”
“Department of Defense actuaries have discovered significantly higher mortality rates among active duty retirees compared to reserve retirees. [ ] looking at populations of non-disabled military retirees age 60 and older, the death rate for active duty enlisted retirees is 20 to 25 percent higher than for reserve enlisted retirees. Active duty officer retirees who are 60 and older die in numbers roughly 10 percent higher than retired reserve peers. [ ] In 2004, for instance, 60-year-old active duty enlisted retirees had an average life expectancy of 19.6 years. That was nearly two years short of life expectancy (21.5 years) for reserve enlisted retirees.”
I am a retired 22 year E7 Navy vet. I enlisted in 1965, one of the promises made was that if I served 20 years I would receive retirement pay and lifetime medical care. This was explained to be compensation for the reduced pay rate we received compared to civilian rates. My initial pay rate was $87.00 per month as an E2 (my initial rate was E2 vice E1 due to having completed a year of ROTC during college at U of NE for a scholarship earned in High School). My earned rate advancements and some pay increases (not much during the Carter presidency) did boost the monthly pay rate, but it was always significantly much less than increases in civilian rates. When I retired in 1987 after earning a BS in Industrial Engineering and a MS in Systems Management, I went to work with a salary about 2 1/2 times my military salary. I believed through my service years that the promises made would be kept. This, of course, has not happened. The life health care was negated by Congress, with requirements for annual fees and co-pays. I recently finally received VA award of 80% disability for health and injury resulting (3 1/2 years after claim submission) while I served. Majority of the award is for Agent Orange related problems (heart, type II diabetes, etc.) from exposure while serving in Vietnam and Thailand in 1968. The books have been cooked by Congress to decrease cost of living pay and retirement increases for serving military and retirees. Who can we trust the least? The enemies we fought during service or Congress? Beware, even retirement from the service does not stop the BOHICA.