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Thread: Military Retirement Pay on the Chopping Block

  1. #1
    Campaign Veteran since9's Avatar
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    Military Retirement Pay on the Chopping Block

    Article.

    My two cents:

    [quote]My paycheck says "Pension," and I receive a 1099-R in the male each year, NOT a W-2. Military retirement pay is a CONTRACT the same as any other U.S. indebtedness and is NOT subject to a post-retirement change by the "Defense Business Board" or any other flunky for Obama or the Dem's anti-military forces. The question of " whether to exempt current service members so their plans won't change" should NEVER be raised by ANY news agency as a question, as it's totally out of the question by it's very nature. The U.S. Government can no more legally change current retirement programs than it can default on any of it's other contracted financial obligations. If they tried, the ensuing class-action lawsuit would utterly deplete any and all potential savings, and would likely cost the American taxpayer considerably more than simply honoring the financial obligation to current retirees.

    SHAME on CBS "News" for FAILING to research this further and reporting on it accurately.

    I'd add that any program that changes the retirement picture when a military service-member is midstream is similarly illegal, as the military pitches the retirement options as part of the incentive to join in the first place. It doesn't matter that it's not written down on one's papers when they join: Under our country's system of law, verbal contracts are as legally binding as written ones. They're simply more difficult to prove in a court of law. With millions of active duty and retired military vets acting as witnesses, however, it shouldn't be too difficult to prove!

    On the other hand, they could change retirement picture today, for recruits signing up tomorrow, provided they let the new recruits know of the change. I've never understood, for example, why the top dog's retirement pay is $7487.55, nearly $1,500 more than the active duty pay of an O-3, the "workhorse" rank in the officer corps. I also believe it's inherently unfair for someone to walk away with nothing after 12 years, a common practice for captains who're passed over for major.

    I support the move to a 401k-like plan where a flat percentage of one's basic pay is matched by the government. In order to equate to today's retirement plans, however, the contributions and the matching would be hefty! Let's take the example of a Lt Col who retires at 26 years. Under the current system their last year of basic pay would be around $100,000, with a retirement pay of around $50,000. If they were 50 when they retired and lived to be 75 years old, that comes to $1,250,000 of retirement pay. Let's kill the zeros and call it $50k annual, and $1.25M total. We're assuming inflation and net return on investment are the same in order to simplify the numbers by removing the time value of money.

    Under a 401k matching plan, in order for one's retirement pay to be the same, the service member would have to contribute a little more than 32% of his basic pay, and the government would have to match it! Is that something the government really wants to do? Can a captain really afford to save 32% of his basic pay? Does the government really want to shift the payments from 20+ years in the future to now? Can they afford that?

    Keep in mind the number of folks serving in the military is only 1/2 of 1% (0.48%) of the U.S. population as a whole, and the those who actually retire is but a fraction of that. Compared to the entire U.S. Budget, the total retirement pay comes to a drop in a full barrel of rain. Given the fact military pay is the primary incentive for keeping the more experienced folks on-hand to maintain and direct current and future operations, as well as train up those less experienced, is this really something that should be looked at from behind a budget axe?

    I don't think so! I think monkeying around with this WILL have a dramatically negative effect with respect to the quality of individuals you'll initially attract and keep in the military ranks. There's a REASON our military is the best in the world, the mostly highly trained and professional, and the retirement carrot is a big component of that reason. Messing with it at all, for either retirees or those currently on active duty, will result in seriously negative consequences.

    Given the fact that percentage-wise it'll have a negligible effect on the bottom line of our nation's economy, I think it's an incredibly stupid idea.
    Last edited by since9; 08-16-2011 at 11:23 AM.
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  2. #2
    Campaign Veteran Schlitz's Avatar
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    That pension is what keeps everyone in. If they cut that I don't think anyone will be sticking around for 20 years.
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    Regular Member Uber_Olafsun's Avatar
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    When I first read about this I couldn't believe it. We are fighting multiple wars and now they want to screw with the retirement. WTF?!?! When I joined in 95 it was always pointed out that everyone signed a contract. Well guess what. So did the govt. The fact that the people who are looking at linking retirement to the stock market are part of the same system who can't fix the market. Seriously whoever came up with this idea needs to be sent on a deployment. I can still remember how little my first paycheck was. I wasn't even bringing home 400 and if you would like to compare housing costs how much do you add for living in a condemned dorm(medina at lackland). The retirement is about the only good reason for staying in unless you like visiting other countries and having them try to blow you up.

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    Founder's Club Member Brass Magnet's Avatar
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    I agree,
    It's not the military pay that's the problem; it's the fighting of wars that's the problem. Let's bring 'em home and let them spend their money here while keeping the country safer than it is if they are over there.
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  5. #5
    Regular Member jbone's Avatar
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    That's CBS!
    But on another note military member’s today do have a secondary option of 401k, they have Thrift Savings Plan. Although when you retire, or get out, you are no longer allowed to contribute; you can keep it, but not contribute. I had a "G" fund and ended up rolling it into a new plan elsewhere after I retired. I could let it sit and slowly grow, but not contribute, that was BS.
    Right now my retirement pay is really retainer pay, while I completed 24 years, I’m still on the fleet reserve list, not fully retired until the 30 year mark(4 more yrs). They would have to do away with that as well aspect as well.
    I agree with you, if the existent retirement system were yanked from the services, and all that was left was a 401k system the services would see significant negative changes in its volunteer force.

  6. #6
    Regular Member Uber_Olafsun's Avatar
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    I wonder if this goes through how much more stop loss would be used to make sure we have senior leadership. We have a volunteer force until they start to hold them in.

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    Campaign Veteran since9's Avatar
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    @Uber - the best stop loss program with respect to this news is to loose the committee that came up with this idea.
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    Regular Member SFCRetired's Avatar
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    And people wonder why I, a retiree with over twenty-one years of service stretching from 1961 to 1991, counsel young people against making any branch of the military a career? There was a time when it was a good career, either as officer or enlisted, for a young person. That time has, unfortunately for the country, passed. There have been entirely too many politicians, and more so recently, willing to cut the military's pay and benefits, but are totally unwilling to cut their own pay and benefits.

    Just for the record: My pay, when I first went in, was $56 per month. When I made E4 and the pay went up to $200 a month, I thought I was chopping some tall cotton!!!

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    Regular Member Beretta92FSLady's Avatar
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    Quote Originally Posted by Brass Magnet View Post
    I agree,
    It's not the military pay that's the problem; it's the fighting of wars that's the problem. Let's bring 'em home and let them spend their money here while keeping the country safer than it is if they are over there.
    So, you want Government workers (military persons) to be brought back home so they can spend the tax-payer funded dollars they are paid, here, in America? I would imagine most of the military force spends much of their money here in America. You know, Government funded anything is bad, right?

    If there is a social commitment to individuals, whether they are military persons, or persons who work in other Government sectors, those commitments should be followed through with, and not welched on, as Democrats, and Republicans are proposing in their own little way.
    I don't mind watching the OC-Community (tea party 2.0's, who have hijacked the OC-Community) cannibalize itself. I do mind watching OC dragged through the gutter. OC is an exercise of A Right. I choose to not OC; I choose to not own firearms. I choose to leave the OC-Community to it's own self-inflicted injuries, and eventual implosion. Carry on...

  10. #10
    Regular Member OldCurlyWolf's Avatar
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    Quote Originally Posted by SFCRetired View Post
    And people wonder why I, a retiree with over twenty-one years of service stretching from 1961 to 1991, counsel young people against making any branch of the military a career? There was a time when it was a good career, either as officer or enlisted, for a young person. That time has, unfortunately for the country, passed. There have been entirely too many politicians, and more so recently, willing to cut the military's pay and benefits, but are totally unwilling to cut their own pay and benefits.

    Just for the record: My pay, when I first went in, was $56 per month. When I made E4 and the pay went up to $200 a month, I thought I was chopping some tall cotton!!!
    Didn't you get a big bump in pay around 1970? I seem to remember a PFC going from around $80 a month to around $300 a month?

    Further research says that the jump was from 71 to 72 and was from $143 to $320 basic pay.
    Last edited by OldCurlyWolf; 08-16-2011 at 09:42 PM.
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  11. #11
    Campaign Veteran Schlitz's Avatar
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    I just sewed on Staff Sergeant (E5) this month and my pay went up, but my housing allowance went down. Well $&*# me... O_O
    “The claim and exercise of a constitutional right cannot be converted into a crime.”
    [Miller vs. U.S., 230 F. Supp. 486, 489 (1956)]
    “There can be no sanction or penalty imposed upon one because of his exercise of constitutional rights.”
    [Sherar vs. Cullen, 481 F2d. 946 (1973)]

  12. #12
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    Before all the retirees go nuts, as I understand it, the proposed change is to future retirees, not current ones.

    A few things to note:

    1. Retirement at twenty years is not "50% of salary" as it is often reported. It is "50% of base pay," which in my case was about 50% of total compensation. That means I am getting 50% of 50% or 25% of my active duty compensation.

    2. Military retirement is not enough to live on when you consider that most retirees start retirement while still raising a family and sending the kids to college. Military retirees need to continue to work after "retirement."

    3. Having been out of the civilian workforce for twenty years or more mean that military retirees, except in a few valuable specialties, must take jobs in the civilian community at wages well below those of their peers. The military retirement fills this gap. For example, after I retired, I took a job as a math teacher. I was hired on at the lowest wage for someone of my education.

    4. Military retirement is part of the compensation package that convinces people to join an organization that has the power to order them to their deaths. In what other occupations can you lawfully be ordered to do something that will surely result in your death and that not complying would be a crime punishable by death? Cutting this part of compensation can only result in the reduced ability to recruit high-quality entrants and to retain them.

    It would be a dumb move. But, heck, what do you expect from Obama? This is the man we voted in. Next time you vote (or don't), remember that elections have consequences.

  13. #13
    Regular Member jbone's Avatar
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    Quote Originally Posted by Schlitz View Post
    I just sewed on Staff Sergeant (E5) this month and my pay went up, but my housing allowance went down. Well $&*# me... O_O
    I remember my Housing allowance in San Diego as a Chief wasn't enough to rent someone’s garage, then I transferred to WA, it was reduced, but still covered my mortgage with enough left over to pay a few utility bills. That system is all jacked up!


    But one thing appearing unified is that we all seem to agree that messing with the future retirement benefits was degrade our fighting force. Hell, Obama increased the tax on my retirement check right after he took office. This shows future retirees are not his only target.


    I'm still hoping Congress passes H.R. 1136 (fingers & toes crossed), so I can pass my remaining education benefits to my kid.


  14. #14
    Regular Member jbone's Avatar
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    Quote Originally Posted by Beretta92FSLady View Post
    I would imagine most of the military force spends much of their money here in America. You know, Government funded anything is bad, right?
    I'm thinking you've never seen a Sailor in PI, or Thighland, I mean Thailand, on payday?

  15. #15
    Founder's Club Member Brass Magnet's Avatar
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    Quote Originally Posted by Beretta92FSLady View Post
    So, you want Government workers (military persons) to be brought back home so they can spend the tax-payer funded dollars they are paid, here, in America? I would imagine most of the military force spends much of their money here in America. You know, Government funded anything is bad, right?
    Ugh....are you following me around? If you keep replying to my posts trying to get me on something, at least do a little reading first. Start with Article 1 Section 8 in the U.S. Constitution. There's a couple sentences, in particular, that you are looking for. That'll help you decide which "government workers" are supposed to be paid for.
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