Are you for or against retirement reforms?

SGM Private RallyPoint Member — Thu, 30 Apr 2015 08:18:50 -0400

http://www.militarytimes.com/story/military/2015/04/30/hasc-ndaa-approved/26622129/

House panel approves $612 billion authorization bill

The measure includes military retirement reforms, a 2.3 percent pay raise for troops and a host of annual policy updates.

Response by Col Private RallyPoint Member made Apr 30 at 2015 8:41 AM

Col Private RallyPoint Member — Thu, 30 Apr 2015 08:41:11 -0400

Against, and leave things as they are! I am afraid that myself and others will be bent over the barrel by the politicians. I am curious to know just how much we "lifers" will lose?

Response by MAJ Robert (Bob) Petrarca made Apr 30 at 2015 8:48 AM

MAJ Robert (Bob) Petrarca — Thu, 30 Apr 2015 08:48:41 -0400

Reform generally translates into "Change for the worst as it applies to the benefit recipient" If it ain't broke and it isn't being abused, don't fix it!

Now we in RI just underwent massive pension reform because the system was abused for decades. The unions got these retirement deals where people made more retired than they did working, almost every fireman and police officer was on a disability AND retirement and the state itself annually underfunded the pensions. Something had to be done so we the taxpayers were taking money destined for our own retirement funds and paying taxes on these "sweetheart" retirement deals.

Response by Sgt Aaron Kennedy, MS made Apr 30 at 2015 8:54 AM

Sgt Aaron Kennedy, MS — Thu, 30 Apr 2015 08:54:52 -0400

Is the current system sustainable? That's really all I want to know.

If It's sustainable, why change it. If it's not sustainable, why isn't it.

I'm not opposed to change because it's change. I'm opposed to change because they don't tell use why they're actually changing things.

"It's expensive" is not a legitimate answer, because everything is expensive.

Response by MSG Scott McBride made Apr 30 at 2015 9:07 AM

MSG Scott McBride — Thu, 30 Apr 2015 09:07:05 -0400

This article says nothing about retirement for current retirees. All I have heard for almost 2 years now is ambiguity. Ok, great, you want to give Soldiers a small pension/savings/severance what have you to Soldiers who served "some" time and may or may not have really earned it, fine, but don't take away from the pension of those who served 20 or more and most certainly earned it.

Response by SGT Bryon Sergent made Apr 30 at 2015 9:26 AM

SGT Bryon Sergent — Thu, 30 Apr 2015 09:26:27 -0400

Leave it Alone they are F&$KING us to are knees, You wait and see! Even the old timers will get screwed you hide and watch. Everyone said obummer care would be great, cost would stay the same they said, better coverage they said! right watch. I got 15 yrs in and in the national guard and they'll switch to 401 k and I'll loose it all!

Response by Maj Chris Nelson made Apr 30 at 2015 9:33 AM

Maj Chris Nelson — Thu, 30 Apr 2015 09:33:03 -0400

I realize that things cant remain as they are, however, I am not sure, without crunching numbers, that this is the way to go. Time will tell!

Response by COL Private RallyPoint Member made Apr 30 at 2015 9:40 AM

COL Private RallyPoint Member — Thu, 30 Apr 2015 09:40:03 -0400

I think the current systems (20 year "pension" and TSP) satisfy the proposed requirements that are being used to justify the change. TSP - fully vested, transferable on leaving service. The current "pension" provides the incentive to retain the senior NCOs and commissioned officers needed for continuity in leadership and mentorship.

As others have said, if the current system is sustainable then I don't see a reason to change it. At least not for the reasons/requirements currently being used to justify a change.

***Edited for spelling***

Response by CPT Private RallyPoint Member made Apr 30 at 2015 10:21 AM

CPT Private RallyPoint Member — Thu, 30 Apr 2015 10:21:20 -0400

It just seems like a ton of knowledge and experience will be walking right out the door, with this one.

One thing I haven't seen talked about much is this: what about all the money invested in single Soldier for training? I don't have exact figures here, but, I would think it would be a pretty penny just to push a Soldier through BCT/AIT/etc....

So, the Soldier gets all that training--an inherent investment by the government--yet, this retirement system seems to not really incentivize them to become a career-Soldier. They stay in for their initial enlistment, contribute to this system, have thousands invested into them for training, and then leave without re-enlisting.

Honestly, it would seem to be a horrendous investment in human capital.

What about all that was invested into their training?

Response by SSG(P) Private RallyPoint Member made Apr 30 at 2015 10:44 AM

SSG(P) Private RallyPoint Member — Thu, 30 Apr 2015 10:44:37 -0400

I am neither for or against the reform considering that it has not been explained in detail what the major end results will be. Based on current trends or atleast what they are using for their basis, about 83% of the troops don't make it to retirement to even reap the benefits. Therefore you are allocating funds for a service not being used. If this is true then maybe by revamping the retirement system they can increase yearly raises, give VA more funding, because let's face it, disability is non taxable if I am not mistaken but in some states retirement is.

Some of the proposed changes would allow Soldiers who deploy, serve their country, and other sacrifices to many to mention, the opportunity to earn something that can be transferred to another retirement plan if they do not make it to 20. This would mean that their sacrifices are being recognized, rather than this all or nothing approach which again according to them, most of us do not make it to 20 years. The current trend also suggest that more Soliders will be pushed out, so if this gives them something to take with them besides a job well done, then why not?

Finally, I would like the grandfather clause and if you make it to 20 or more you automatically get a set pension based on the current retirement plan. So until I see a detail breakdown on what changes are being made or will be made, I am neither for or against as I stated earlier. Hopefully, this does not have a huge backlash on the VA for disability claims, but can you put a price on the sacrifices many service members make on a daily basis?

Response by SSG(P) Private RallyPoint Member made Apr 30 at 2015 10:44 AM

SSG(P) Private RallyPoint Member — Thu, 30 Apr 2015 10:44:36 -0400

Employer matching is not new. Many employers in the civilian sector have adapted this for their retirement. I read another article where they are proposing 1% mandatory base pay into a TSP like retirement plan and a matching after. So you would potentially get 1% plus say 3% of self contribution and 3% employer matching.

Let's not forget that tuition assistance, including GI Bill are some of the main reason why people enlist. So if that if that is the case, it was never their intention to stay in anyway. However, this proposed system will still reward these initial or mid career Servicemembers who earned it something they can leave with an take to another company.

When I came in the service I had the option of transferring a very similar retirement plan into my TSP. So despite leaving I didn't have to start from scratch I just had to keep building. Again I do think they should reward those that make it to 20 or more years with something better than the current changes.

Response by MAJ Ken Landgren made Apr 30 at 2015 2:42 PM

MAJ Ken Landgren — Thu, 30 Apr 2015 14:42:27 -0400

Some people do not know you have to wait until 59 1/2 to withdraw from the 401k without penalty, and some don't know that you should transfer from risky funds to safe funds for capital conservation before retirement, and some folks won't know what a safe and risky fund is, and some folks will not know the longer your retirement horizon the more risk you can assume, and some people will not know what a bond fund and stock fund.

Response by 1SG Private RallyPoint Member made Apr 30 at 2015 2:57 PM

1SG Private RallyPoint Member — Thu, 30 Apr 2015 14:57:46 -0400

You always hear if it's not broke don't fix it. I say leave it alone it is working fine the way it is.

Response by CW5 Private RallyPoint Member made Apr 30 at 2015 4:40 PM

CW5 Private RallyPoint Member — Thu, 30 Apr 2015 16:40:59 -0400

So it would have to have a grandfather clause. There is no way to make up for 10-20+ years of contributions that were lost. For those under the new system, they should have it explained to them upon enlisting/commissioning that the benefit is most realized when you contribute to the maximum allowed early on in your career.

Right now, the only option for the ones that don't expect to retire is savings bonds, TSP, or outside investing/savings which is fine and there is a reason why the old pension (or deferred payment) plans are slowly being phased out in our country: it costs a lot of money to pay a retired 38 year old (potentially) 50% pay for the rest of their life.

As long as recruits go in understanding what to expect and start their financial planning early, it could work.