19 August 2011

Is It Worth It?

While nothing will be happening any time soon, the powers that be are tossing around the idea that the traditional military retirement should change.   The basic gist is that instead of the old plan where you stay in for 20 years and you get half your pay for the rest of your life, it would be a more “civilianized” system with a government funded  401K style plan that gives you 25% of your pay when you reach “retirement age.”   This will be a huge money saver since people are living longer (I know, what jerks!) and  17% of the service stays in to receive these full benefits

This idea has many good points and bad points.  The good news is that this will cut some dead weight by getting rid of people hanging on for those last few years just to tick the clock to 20 and it will allow members who leave with less than 20 years in (83% of the service) to retain some retirement in the bank.  The bad news is that there is the possibility that people will never do more than one contracted cycle (now you can do a handful of years, leave with the GI bill and a hefty 401k to roll-over) and I can imagine that this may deter recruitment at all levels. I bet there will be plummeting retention at the officer level, though that is mere speculation of my behalf.

This works out fine for people who are retired, their benefits won’t change.  While this will be a tough sell for new recruits, at least those individuals can come in aware of what they will, and won’t, be getting.  The people who get the most screwed, not a shock here, are the people currently in the service.   Without getting into the complicated details, people who are currently in will start accruing the new retirement in the new style as soon as the policy in place and they will then receive 25% of their salary for past years served, paid out as an annuity, when they hit retirement age, but only if they do the full 20 years as was previously expected

For anyone keeping score at home that means that if Chris stays in, he will get half of what was “promised” when he commissioned, paid out 20 years later than was promised, but only if he still serves the full 20 years.  Basically he has to fulfill his original contract so he can *hope* to get half his promised benefits two decades later than he was originally slated to receive this pension.  

At first I thought my indignation might just be a bad case of millennial self-entitlement. Certainly we have “enjoyed” many worthwhile benefits from military service so really, there was a pretty good chance I was just being a total douche.  However, the more I look at that deal, the more it looks like a really crappy deal. Also note: he works in a floating office building, that just happens to contain serious weaponry and a nuclear plant, doing managerial work.  In terms of putting your ass on the line for the country what he is doing is baby-town frolics compared to say 19 year-old Marines in the deserts of  Asia. I don’t say this to devalue what he does, he works hard at a really important job, but just to give some frame of reference. If it seems shitty to us, imagine how people in their third tour of duty in war-zones will feel.  For the first time in our lives we are looking at not being a career Navy family. 

While personal anecdote doesn’t define a trend, I can point to at least one guy in whom the  military has invested, conservatively, $750,000 (probably more like a cool million, but adding up the “incidentals” got very time consuming) who will walk away and take all those skills and training somewhere else.  Ideally a nice socialist nation where this shit is not even an issue. 

I predict some serious bad reactions to this particular dose of  “screw your civil servants,” since at the end of the day, this not about debating the merits of this job as opposed to any other, but about the accountability of our government at large.  Does the DoD really feel comfortable changing the contracts mid-stream and calling “takesies-backsies” on promised benefits?  Sadly, I bet they do.


Ginger said...

I have to say, I'm not *surprised* but I am pretty dismayed by this. I can't imagine what this is going to do to the military--both current and future recruits.

Alexis said...

@Ginger This will completely change the entire face of our armed services. That could be good, it could be bad, it probably be a mix of both. I just thank my lucky stars that we can watch, see and leave if we desire. Not everyone in the service can do that though...it may be pretty sucky for a lot of people.