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Tuesday, August 16, 2011

o'dodger - Targets Military, May Try Gutting Retirement

Slap a helmet on o'who? & the entire civilian panel making these recommendations.  Give'm a gun and ship'em into combat long enough to have to duck'n cover a few times.  It wouldn't take'm long to figure out they're overpaid and that the military is underpaid! - rfh
[reposted from Crucis' Court Blog post of Tuesday, August 16, 2011]
     I retired from a large telecommunications company, not the military.  On a percentage of base pay, the military retirement pay rate is much better than mine...50% of base pay after 20 years and going up for every year over 20 years.  My pension works out to be around 22% and I had to wait until I was at least 62 years of age.
     I don't begrudge the military for their pension and benefits.  They earned them.
     The Obama administration, however, don't hold those same views.  They want to change the military retirement system, replacing the pension with a 401K.  That would be OK if the 401K were in addition to the military pension.  But that's not what is being planned.


CBS News had this piece on their website.

Radical overhaul of military retirement eyed

     WASHINGTON - The military retirement system has long been considered untouchable - along with Social Security and Medicare.  But in these days of soaring deficits, it seems everything is a potential target for budget cutters.  A Pentagon-sponsored study says military pensions are no longer untouchable - they're unaffordable.
     CBS News investigative correspondent Sharyl Attkisson reports high-level, closely-held meetings are taking place at the Pentagon regarding a radical proposal to overhaul retirement for the nation's 1.4 million service members - a bedrock guarantee of military service. 
     The proposal comes from an influential panel of military advisors called the Defense Business Board.  Their plan, laid out in a 24-page presentation "Modernizing the Military Retirement System," would eliminate the familiar system under which anyone who serves 20 years is eligible for retirement at half their salary.  Instead, they'd get a 401k-style plan with government contributions.
     They'd have to wait until normal retirement age.   (Emphasis mine: Crucis)  It would save $250 billion dollars over 20 years. 
     Douglas Holtz-Eakin, former director of the Congressional Budget Office says it's very important that the military attack its retirement issues.  "We're talking about an underfunding that starts to look like hundreds of billions of dollars in the next 20 years.  And if you want to maintain the core mission which is to defend the nation and have the strategic capabilities we need, we can't have all their money tied up in retirement programs."
     Advocates say the new system would not only save money -- but would also be fairer.  It would give benefits to those who serve less than 20 years.  Right now, they walk away with nothing.  And it would give more money to those in combat or high risk situations.
     The proposal leaves a lot of blanks to be filled in, including whether to exempt current service members so their plans won't change.
     CBS News spoke to some active duty troops who agreed costs must be cut - but worry the number of experienced soldiers will dwindle with no incentive to stay enlisted for 20 years.
     The proposal is in early stages and would require Congressional approval.  But it's clear that military retirement is no longer untouchable. A Pentagon spokesman said the military retirement system "is a fair subject of review" but no changes will be made "without careful consideration."
     There appears to be two components to this proposal. First to replace the current pension with a 401K type savings plan. The individual creates a savings plan and the government "may" provide matching funds up to a limit.  That limit is 10% for most private sector 401K plans.
     That right there is a radical change.  Individual members must now pay for their own retirement.  Many would say that is a good thing given all the news about the abuses of retirement systems by public sector unions.
     But the military is not a union.  In a sense, they are not government employees, either, they are employees of every man, woman and child in this country.
     The second part of this plan is to delay retirement until "normal" retirement age.  I assume that would be age 65. That would delay forcing payments from the government for a couple of decades.  At this time, a member of the military could retire as early as age 38 or 39.  The new plan would delay retirement for those members another 25 years or more.
     There is an implied assumption that military members would take their "401K" with them at the end of their military careers and it would continue to grow.  For many, that would probably be true.
     But the military is not like a civilian job.  It is dangerous. Many are killed and severely injured just in normal peace time training accidents. In several years in the last decade, the military had more deaths from non-combat causes than from combat related deaths.  That little bit of data was well hidden by the state media.
      Like I said, I do not begrudge the military.
     There are at least two faults that I see with this plan.  First, as I said, it delays actual retirement to age 65 or whatever is the norm over the years. (Dems already plan on raising SS retirement age from the existing age of 66.)
     Second, the military pay is very poor.  Say they pay 10% of their pay into such a plan, their rate of savings is less than that of their civilian counterparts.  I saved into my 401K for over twenty years. I'm not drawing from it and it doesn't come close to the to 50% of my last base pay.  It's more like 4-5%. Combine that with my pension and I now have only 25% of the pay when I was still working.
     And my wife and I are much, much better off than many at our age.
     I don't see any new benefit for our military with this plan.  I do see the government paying less and putting the burden of retirement on the military members.  You cannot treat the military as if they were the same as civilian employees unless you want their performance to be similar to that of a civilian---a 9 to 5 job with weekends and holidays off.
     That is not a military force ready and prepared to go in harm's way for the nation.
     But it is typical of the liberal mind-set who are eager to cut military costs to provide more funds to their vote-buying schemes.
Old NFO said...
What you will see is a mass departure from the military... It's already being discussed by MANY senior folks I know, and quite a few junior folks who cannot retire and are now looking at this BS... Unless the ENTIRE current force is grandfathered, there will be hell to pay.

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