Posted on 07/26/2011 2:40:00 AM PDT by markomalley
A sweeping new plan to overhaul the Pentagon’s retirement system would give some benefits to all troops and phase out the 20-year cliff vesting system that has defined military careers for generations, the Military Times newspapers reported.
The plan calls for a corporate-style benefits program that would contribute money to troops’ retirement savings account rather than the promise of a future monthly pension, according to a new proposal from an influential Pentagon advisory board.
The move would save the Pentagon money -- at a time when it's being asked to cut at least $400 billion -- and benefit troops who leave with less than 20 years of service.
The yearly contributions might amount to about 16.5 percent of a member’s annual pay and would be deposited into a mandatory version of the Thrift Savings Plan, the military’s existing 401(k)-style account that now does not include government matching contributions, according to the Times.
Proponents said the plan would allow more flexibility for servicemembers, who could decide how they want to invest their retirement savings, and for the military, which would be allowed to offer higher contributions to troops who deploy frequently or take hardship assignments.
The Military Times has more on the proposed overhaul, including a summary of how servicemembers would be affected, depending on their length of service.
According to an article I read in the Navy Times several months ago, 2011 will have the most retirements of officers from all branches of the military since the beginning of the Nation's military.
The reason {main} they give is that officers don't want to referee the crap that they know is coming with the queers are legal law that the zero got passed.
This halfrican has done more to harm the USA in more ways than hitler, stalin and mao combined ever did.
He should be tried for treason, and when found guilty, have the sentence executed.
The volunteer line would be miles in length.
If the program is similar to TSP, the individual chooses where to invest their money. If PFC Snuffy blows it all on a high risk fund, that’s his choice to make. He could just as easily invest his retirement in bonds. Of course, that may not be as safe as once thought given the direction our government is going.
Then give this 401k / TSP to Congress, the POTUS and every other "GS" pencil pusher in Washington DC and eliminate all the Traditional Pensions.
Especially for the Congress and Senate....
The TSP system limits you as to what you can invest. There are only a few plans one can park their money in. With the exception of the “G” fund, everyone lost in 08 and 09. You think that sort of program is going to keep people in for 20 years?
BTW, TSP lets the recipient choose between monthly payouts, a lump sum payment, or an annuity. You sound like the folks who are opposed to changing Social Security for the same reason. I’d love to opt out of Social Security, but my fellow citizens won’t let me, supposedly for my own good. Is it really better to limit everyone’s choices because a some individuals are irresponsible? Let PFC Snuffy pay the price for his own idiocy. That’s how people learn.
As of now TSP is VOLUNTARY. Nice try to equate it with Social Security.
The bean counters like these sorts of retirement programs, because they don't have to incur future, unpredictable financial obligations. This program could conceivably keep all of the benefits of the existing retirement system, and simply eliminate the all or nothing 20 year point. People who are burned out at 18 or 19 years wouldn't have to stick around. People who stay longer could continue to accrue benefits.
I would propose this for the federal employees before I did this to our military. good for the goose and so on.
KantianBurke: “You think that sort of program is going to keep people in for 20 years?”
It apparently keeps plenty of federal employees from leaving. It really depends on how much compensation they are talking about. If they are talking about matching funds and a guaranteed government contribution, like TSP, nothing says they couldn’t increase the government’s percent for time in grade and/or years served.
TSP is actually quite popular. I know a lot of military folks who like it, and they don’t currently get matching contributions. However, you’re correct about the potential to lose money. That isn’t the TSP program’s fault so much as government’s malfeasance in other areas, like social justice mortgage lending. Personally, I’d STILL rather own my retirement money outright than depend on government. They are constantly trying to inflate all of us military retirees out of our pensions. If it was my own money, I could at least take my own steps to mitigate that.
When someone joins the army he signs a check with a promise that states: "to be filled in later up to any amount including my life". That is their oath. Yes they deserve our ultimate support.
I’m pretty certain I would have gotten out at the 4-8 year point had it not been for the pension. I got married as a 1st Lt and there was a lot of pressure from the wife to just get a regular job and stay put. Not that I didn’t love the Military—I did. But once you get married and have kids, things change.
I didn’t equate TSP with Social Security. I was comparing Social Security to the current military retirement system. My point was that you were opposed to giving PFC Snuffy the right to make his own retirement investment decisions, because he might choose poorly. That’s one of the same arguments made by Democrats when they refuse to let people opt out of Social Security.
It apparently keeps plenty of federal employees from leaving.
Federal employees have had this plan for years, since sometime in the 80s, I believe.
BOBWADE: “I would propose this for the federal employees before I did this to our military.”
Federal employees already have a plan like this. It’s called TSP. I think they also receive a much smaller percent based on years served and salary at retirement, but TSP is the predominate federal employee retirement program. They contribute to their own pension plan, receive a certain amount of government matching funds, and can leave with whatever is in the account (lump sum or monthly payout or an annuity). It works very well.
Everyone in the military already has this ability, it’s called an IRA. This is just another attempt to stick it to the military while showering benefits on government unions.
The “cliff” is in effect a vesting schedule designed to keep experienced people through their prime, and then encourage them to leave.
On the other hand, the officer corps has a force out system that encourages a lot of very talented, but not fast track, people to consider getting out earlier than they normally would, because 20 yrs is looking unlikely and every passing year starts to look like wasted time. An allowance for these folks to be vested would make sticking around for another deployment more palatable.
I see many talented people hanging out through their shore (non-deployed) tour and then taking off before taking orders to a deploying unit, if there is no vesting structure to discourage it. Having a vesting schedule that locks in after each deployment might solve that issue, as well as address all of the magically pregnant or overweight, that suddenly can't deploy.
Some federal civilian employees serve right with the active duty force and deploy regularly to the same hostile areas. Don’t paint with such a broad brush. You insult those who are making the same sacrifices as the active duty forces. There are some.
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