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?