May 05 2015
I’ve been holding off on this topic because the thought of elected officials with pensions working with policy wonks who don’t know a PCS from a POV on how to pull back the current military pension system irks me.
Congress is considering implementing a TSP styled 401k style investment program with matching contributions (though I don’t know how much, but it can’t be too generous given that they’re cutting the current retirement program to save money) and a pension portion that is scaled back by 20% of the current system.
I’m really surprised about starting to shift a pension based retirement program toward a 401k given that we have a Democrat in office who should understand the value of a pension styled plan over a 401k – stats show that 401k recipients aren’t ready for retirement as opposed to retirees in a pension based program. And the government should work to ensure that our retired military are financially prepared. Military members, like first responders (and maybe more so to some extent), have jobs that are out of the ordinary with many negative aspects – this is why we have the current retirement program after 20 years: to help compensate for the unique aspects of a military career.
Plus, we know this 20% figure will be cut in the future now that the floodgates are open.
Which leads me to my next concern – the ability to recruit and retain. Defense officials want to attract “young cyberwarriors” (http://www.myrtlebeachonline.com/news/state/south-carolina/article19785774.html) who will want to “stay for 20 years.” So, scaling the retirement benefits will help retain and recruit?
The current program is what keeps members for 20 years. When my wife hit ten years, it was the retirement that kept us in – there was too much to lose getting out at 10 years. But with a lessened retirement program, members will have less incentive to stay. Plus, what better way to attract young cyberwarriors or any other young man or woman than to have a retirement program that is unequalled in the private sector (as the current one is)?
MOAA is working the Hill to let Congress know what military members really think. And we’ve had success this past year stopping other cuts in benefits, so hopefully our advice will be listened to again. Here is a link to MOAA’s Annual Report outlining the past year’s efforts to stop Congress cutting members’ benefits (it’s a good read): http://www.moaa.org/annualletter/
I’ve said enough. What are your thoughts readers? Should the military “modernize” their retirement program?
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