Keeping the blogosphere posted on the goings on of the world of submarines since late 2004... and mocking and belittling general foolishness wherever it may be found. Idaho's first and foremost submarine blog. (If you don't like something on this blog, please E-mail me; don't call me at home.)

Sunday, March 12, 2006

A Really Bad Idea

I don't have anything other than anecdotal evidence, but I think that one of the main reasons people stay in the military beyond the 10 year point is the knowledge that they're more than halfway to being vested for military retirement; I know it was a big deal for me. As it stands right now, someone who retires after being in for 20 years gets 50% of their base pay for the rest of their lives, plus COLA increases. (That's until August 1st of this year, when the first group of servicepeople who didn't take a $30K bonus five years ago will only get 40% under the REDUX plan... but that's another story.) Being retired now myself, I've come to realize that this immediate payout of retirement benefits is even more important than I had known; I found that, unless you want to stay in the defense industry, it's hard to find a civilian job that pays as much as the military did (especially for officers). That retirement check goes a long way towards making up the difference.

That's why I'm opposed to a plan that's being sent to SecDef next month by the "Defense Advisory Committee on Military Compensation" that calls for sweeping changes in the military retirement system. Here's what it calls for in a nutshell:

• Vesting members at 10 rather than 20 years;
• Paying graduated retirement plans ranging from 25 percent of base pay at 10 years to 100 percent of base pay at 40 years;
• Establishing a Thrift Savings Plan with government contributions of 5 to 10 percent of base pay;
• Providing "gate pays" at specific service milestones, as determined by the individual services; and
(the biggest one)
• Delaying payment of the retirement annuity until age 60.


That's a part of the plan that won't fly, if you ask me. Retention numbers for people with 10-20 years in would drop, and you'd see many more people with 30-40 years in; reducing the number of people in the prime of their careers, and adding to the number of non-sea-going desk jockeys, just doesn't make sense to me.

This Stars and Stripes article has more on the retirement aspects of the plan. The AFPS article interviewed retired ADM Donald Pilling (former VCNO), who made these points:

"...most private-sector compensation packages give 80 percent of their cash up front, deferring just 20 percent for retirement. In contrast, the current military compensation package pays about one-half the total compensation up front and defers the rest."
"...any proposed changes to the compensation package would be grandfathered in, so currently serving members would not be affected. The only exception could be in the case that current members are offered the opportunity to voluntarily "opt in" to the new system."

One part of the proposed changes to the active duty pay system that will make single guys happy is the proposal to "eliminate the "with dependents" and "without dependents" provision of basic allowance for housing so all servicemembers in the same pay grade receive the same allowance, regardless of their family situation."

So what do you think? Would the option of a 10 year retirement make people stay in past their first enlistment? For any retirees, would you have stayed in for 20 if you wouldn't be getting a retirement check until 60?

Going deep...

5 Comments:

Anonymous Anonymous said...

I've always had the impresion that if you re-up even once, you might as well stay in the full 20 because after that second term is over you're already halfway there.

Thinking this way, I couldn't bear to think of another 15 years doing a job I liked but, HATED the managment.

25% after ten I could of done, but delaying payment of the retirement annuity until age 60 would be a deal breaker. Some people don't have it there gene's to live that long.

Slightly offtopic:

BUT... There is an alternative to retirement benefits. I receive $108 bucks a month from the VA compansation for my ringing ears. I'm still quite young and could only manage a 10% disability rating, but some of you older farts, like my father-in-law, with bad knees and a bad back from years of living aboard ship (submarine knees) can easily get a 40-50% disability rating, which in my FIL's case is nearly 50% of his Senior Chief retirement pay.

So I guess what I'm trying to say is: there are other ways to suppliment your post enlistment income besides retirement.

3/12/2006 11:04 AM

 
Anonymous Anonymous said...

You aim at the 20 some mark and everything changes on the way. IF you have to wait until 60 (bad genes and all) - you'll surely have a lot of too old soldiers/sailors staying in for the 30-40 deal. Cranky and demanding like union auto workers! ;-D

Housing allowances have always been a little strange. If everyone becomes entitled to the same - there won't be anyone living in the barracks - OR - a lot of husbands/wives will opt to stay with their parents or relatives - away from the spouse - depending on whether these benefits are left family style or single rate!?! One of the reasons we got married 31 years ago was the fact that we had top secret crypto clearances and thought we'd loose them by "shaking up" - AND - as two military people we each were entitled to a housing allowance (double). ;-)

3/12/2006 9:40 PM

 
Blogger Skippy-san said...

TSP allows folks who want out to leave with something. For active duty, the whole revised compensation plan is a mess. Its undemocratic, unfair and the bottom line is the military is not a corporation. ( Companies can't ask you to die for the company--and dead is still dead regardless of paygrade). Plus the military has to be a young man's game. The current system is not broken---only the money grubbing Dr Chu thinks so, because it pains him to have to pay people what they have earned.

All the military lobbies should decry this proposal loud and long..

3/13/2006 6:53 AM

 
Blogger submandave said...

I agree that the 60-yr start is a total deal breaker. That's the way we've got it in the Reserve and I've been saying for some time now that this is a big hurdle in getting quality Active to Reserve accessions. It's one thing to tell a 30-yo sailor with 10 in that they can join the Reserves and still retire in 10 years and quite another to remind them that they won't see a dime for 30. Especially with involuntary recall and a year in the desert almost guaranteed to break up their starting a new career.

Additionally, a 10 year vestment will kill the Reserves, a huge player in the GWOT. For the Reserve to be able to support the Navy mission we rely upon quality individuals to apply their training and skills learned on Active Duty. It is simply impossible to make an effective non-prior service OS, for example. Without the carrot hanging out there at the 20-year point many sailors we have leaving Active Duty and joining the Reserve will simply take their small piece of the pie and go home.

3/17/2006 10:47 AM

 
Blogger Jon said...

Personally, I was a six and out (well, five and a half, but whatever...early out was pretty nice), but my father did twenty in the air force as a pilot draftee. The first two times he extended, it was due to a poor economy (mid and late 70's). Once he hit his 12 year point (or thereabouts) it really was because he was more than halfway to retirement, so he stayed in up to his 20 year point (he had the paperwork in at something like his 18 year point.)

If the twenty year vestment hadn't been there, he would have left the air force around his 15 year point, I figure, and gone into the airlines that much sooner.

1/08/2010 10:56 AM

 

Post a Comment

<< Home