# DoD panel calls for radical retirement overhaul



## Catalytic (Sep 15, 2010)

http://www.armytimes.com/news/2011/...calls-for-radical-retirement-overhaul-072511/

This bothers me a great deal. Hubby is due to retire 1May12, and there is no grandfather clause on this. There is no way we will be able to keep our home and land if this passes before he retires, as the local economy just can't provide income to match his current pay.


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## jessimeredith (Sep 12, 2004)

We were going to be in the same position, until Soldier got thrown backwards across a turret downrange and got his back all messed up. The only thing saving our rears now is is currently J shaped spine. He was going to be a lifer (about halfway there), just change his MOS, but with this new "proposal" (that will probably get the greenlight) he's looking at med boarding instead.

Throws all the plans and such into disarray...that's for sure!


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## Qhorseman (Jul 9, 2010)

I am glad I did my time and retired already. If this was the retirement system in place while I was active, I would not have made the Navy a career. That is the whole allure of the current system, you can do 20 years, retire young and have enough time to build a career with a civilian job and retire with 3 incomes at age 62.


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## Catalytic (Sep 15, 2010)

Qhorseman said:


> I am glad I did my time and retired already. If this was the retirement system in place while I was active, I would not have made the Navy a career. That is the whole allure of the current system, you can do 20 years, retire young and have enough time to build a career with a civilian job and retire with 3 incomes at age 62.


Exactly. I'll be honest, I'm scared ****less about this. DH is so stubborn, though, to not lose the house, he'll take a job overseas, and dangit, I'm tired of that. I'd rather live in a cardboard box. Didn't like him in a warzone when he had a weapon, dang sure don't want him there without one...


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## Catalytic (Sep 15, 2010)

jessimeredith said:


> We were going to be in the same position, until Soldier got thrown backwards across a turret downrange and got his back all messed up. The only thing saving our rears now is is currently J shaped spine. He was going to be a lifer (about halfway there), just change his MOS, but with this new "proposal" (that will probably get the greenlight) he's looking at med boarding instead.
> 
> Throws all the plans and such into disarray...that's for sure!


So sorry about the injury Jessica. I hope things work out for you guys, I think if we were in your shoes, we'd be taking medical retirement asap.


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## Qhorseman (Jul 9, 2010)

Something to think about, Medical retirement is tax free. I was going for 30 when they boarded me at 22 years. I get the same retirement benefits as anyone else just don't pay taxes on it. Regular retirement pay is taxed.


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## jessimeredith (Sep 12, 2004)

Catalytic said:


> So sorry about the injury Jessica. I hope things work out for you guys, I think if we were in your shoes, we'd be taking medical retirement asap.


Thanks Catalytic. He's actually doing pretty well with it considering (I've seen the MRIs, CATs and X rays...yeah, NOT pretty and definitely something he didn't have beforehand or he wouldn't have been able to even do PT!) We're having to wait for an actual Med board until after he has a couple of surgeries (one for his hand that got screwed up LAST year and possibly shaving the bulging disk in his back though I'm personally iffy on that one) before they'll even look to start one. If he denies the surgery, they can write him off as refusing treatment and drop that part from his med board...which means no pay for that particular issue. 

Our Garrison used to be notorious for moving along at a snail's pace with these things until earlier this year when we lost a Soldier (and good friend) to suicide...he had been sitting in WTU for well over a year while they tinkered around with his meds for PTSD and TBI, changing them up every couple of months. The only good thing that came from losing Jake was Garrison taking a good hard look at how things were being run and putting a stop to most of the over-medicating.


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## YuccaFlatsRanch (May 3, 2004)

Fuss with the DOD retirement and they better hope that they continue to have a crappy economy. The idiots don't realize that there isn't "that much patriotism" around to make up for a crappy military retirement system. Why if you fuss with the retirement system would someone choose to get his butt shot at for minimum wage, when he would work for minimum wage safely at Wally World???

Gonna have to re-institute the DRAFT if they make the reasons for an all volunteer force go away.


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## Narshalla (Sep 11, 2008)

If I understand this correctly, they recommend that the system change to a corporate style retirement system very much like what corporations and many state, county, and city governments have right now.

As I understand it, most corporations faithfully put the money in, and there is no problem. However, if the company later _does_ have problems, all they have to do is declare bankruptcy and *poof*, the pension benefits magically go away. Even when the pension $$$ is already set aside in specific accounts labeled for that purpose, it is frequently pulled back in with the general funds and ends up going to other creditors.

Then, too, right now, many state, county, and city governments are having trouble meeting this year's pension benefits, and never mind what's due to be paid out next year.

On the federal level, Social Security is the perfect example of what happens when fed.gov "sets aside" money for later use . . . yeah, not good.

From what the article said, it _sounds as though_ the money would be taken out and actually deposited in a real, separate account in the service member's name, just like the TSP does now. This _ might_ work, but in order for this to work, they have to be counting on the average 18-year-old recruit planning for their retirement in 40 years.

Again, it _might_ work, but any person who is inclined to look that far into the future is smart enough to realize that the whole deposit-it-into-an-account-in-your-name thing might cahnge, too.


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## stamphappy (Jul 29, 2010)

Catalytic:

DH is to retire 12May with 20 years is that correct? If so, if I read it correctly, he won't be affected. If you're at 20 years, you'll get the same retirement we have now. If you're at 15 years and still have 5 to go then:

*15 years of service. Troops would immediately begin accruing new benefits in a TSP account. If they remained in service for five more years, they would receive three-fourths of the &#8220;old plan benefit,&#8221; about 37.5 percent of their pay at retirement, as an annuity.

* 20 years and beyond. Troops who stayed in past 20 years would continue to receive annual TSP contributions.

So I think he'd be okay. And remember, Congress still also has to vote on it. 

And by the way, how is Congress changing THEIR retirement and benefits to help save money???


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## Catalytic (Sep 15, 2010)

stamphappy said:


> Catalytic:
> 
> DH is to retire 12May with 20 years is that correct? If so, if I read it correctly, he won't be affected. If you're at 20 years, you'll get the same retirement we have now. If you're at 15 years and still have 5 to go then:
> 
> ...


DH is to retire May 1, 2012. I may be misunderstanding the article, but this is what I interpret it to say:

(Figures are not exactly accurate, but they are close, I'm using easy numbers for the comparison)

Right now, DH is entitled to 50% of his base pay, paid monthly, starting immediately upon retirement, he will be almost 46.

Currently, base pay is $5000/month, 50% of that is $2500/month.

According to that article, he will no longer be entitled to 50%, but only 37.5%, paid annually into TSP. Mind you, we cannot withdraw from TSP until DH is 59.5, which is 14 years from now.

$2500/mo times 12 months is $30,000/annually

37.5% of $5000 is $1875, a $625/month difference. Mind you, that's more than my truck payment!

$1875 times 12 is $22,500, again, deposited ANNUALLY (ie: the gov't gets the interest on that for 12 months!), and we can't touch it for 15 years. *We cannot even borrow from TSP after retirement.*

That is $7500 LESS per year that the gov't pays, but it is $30,000 per year *I* live without for 15 years.

We bought a house one year ago this month. We did not go anywhere near what we were approved/qualified for, we made darn sure to stay low for one reason: we wanted his retirement pay to cover the house payment, water, electric, and the truck payment. We quickly figured out that it would not cover all of that, because we were completely unprepared for the electric to be as high as it is, but as it stands right now, his retirement pay will cover (after taxes) the house, water, and truck payments, along with the Tricare co-pay.

We PLANNED for this because we counted on retirement pay, and it made a difference on where we wanted to retire. We purposely retired in a low-pay area to be near aging family members, and counted on being able to make it because we KNEW retirement would cover the major necessary expenses. NEVER has something like this been brought up before, EVERY retirement plan change in the past has included either a grandfather clause, or allowed the soldier to choose between the old and new plans.

Yes, DH plans to work after he retires, but he won't make near his current salary in this area, and in addition, right after retirement, we have student loans that will go into repayment, and they are a good chunk of change.

If I read this correctly, and my interpretation above is correct, we stand to lose a LOT of money, about $112,500 between when he retires and when he can start accessing TSP.


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## NickyBlade (May 27, 2008)

Yes... you are misinterpreting it. 

The high 3 retirement and this new 401k thing are two separate things. Nothing should change for you since you're retiring in 2012. Service members are grandfathered in up to the point that the plan changes. 

My husband is over 16 years right now... If he stays past 20, we will get 1/20th of the current 50% high three for each year he served up to this change. To keep it simple, I'm rounding. We were expecting about $2000 a month when he retires in 2015. If this passes we will get closer to $1600 a month. There's no age requirement. 

He will also get the new 401K for his last 4 years in service. That is what you can't use without penalty until a certain age.


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## Catalytic (Sep 15, 2010)

NickyBlade said:


> Yes... you are misinterpreting it.
> 
> The high 3 retirement and this new 401k thing are two separate things. Nothing should change for you since you're retiring in 2012. Service members are grandfathered in up to the point that the plan changes.
> 
> ...


Nicky, where did you get this information? I am not the only one interpreting it the way I posted above, see the comments on the original link. The article specifically says it will not have a grandfather clause: "Unlike other proposals to overhaul military retirement that would grandfather current troops, the board suggests that DoD could make an &#8220;immediate&#8221; transition to the new system, which would affect current troops quite differently depending on their years of service:"

ETA: I think I understand what you are saying, which is still a breach of contract IMO. We were promised 50% monthly, and if I interpret it the way you are, then we still only get 37.5%, as an annuity, and it does not address when that annuity would start.


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## NickyBlade (May 27, 2008)

It was explained in the Army Times with a couple different examples of how it would effect people at different points in their careers. 

There's no grandfather clause past the point this goes into effect. It said you will get 1/20th of 50% base pay for each year you served up until the change... You will still only get that after retiring at 20 years though. 

So, say someone joined in 2010 and stays until 2030. They would get 1/20th of 50% base pay for that single year before the change and then their 19 years worth of 401K. If they leave the military in 2014, they would leave with ONLY 3 years of 401K deposits. 

Hope this makes sense. It still sucks and takes away the incentive to stay 20+. Young soldiers will probably think it's great doing their 4 years and leaving with a 401K.


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## NickyBlade (May 27, 2008)

Oh... on your link... check out what it says about people who have 15 years in... 

"15 years of service. Troops would immediately begin accruing new benefits in a TSP account. If they remained in service for five more years, they would receive three-fourths of the &#8220;old plan benefit,&#8221; about 37.5 percent of their pay at retirement, as an annuity."

It explained it better in their printed paper... with fancy charts and all that. lol. 

We're not thrilled about any of this... but really, with the economy the way it is... and the way this world is headed... I don't want to be all gloom and doom. The Bible says to be content with food and clothing. We will be content.


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## Catalytic (Sep 15, 2010)

NickyBlade said:


> Oh... on your link... check out what it says about people who have 15 years in...
> 
> "15 years of service. Troops would immediately begin accruing new benefits in a TSP account. If they remained in service for five more years, they would receive three-fourths of the âold plan benefit,â about 37.5 percent of their pay at retirement, as an annuity."
> 
> ...


We got a PDF file sent to us from someone "in the know" and it looks like you are correct. I still think it's crap that we may lose 12.5% so close to retirement, but that much wouldn't cause us to lose our house, at least.


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## NickyBlade (May 27, 2008)

This would probably get me beat up... But, my suggestion to the military saving money is to drop duel BAH when couples are stationed together and living together.

How is it right that a soldier gets to pocket an extra $1200 a month UNTAXED money because her husband's BAH is paying for their house? If they are stationed apart, then it's understandable. But when they are living in the same house, it doesn't seem right. 

I just read yesterday that their talking about raising the costs of Tri-care for life that retired soldiers get. If they want to raise health care costs, get rid of Tri-care prime and make everyone be on standard with a $300 annual deductible and 20% co-pay. Tri-care is just as abused as medicaid is. People go to the ER for every sniffle and bump because they have to pay NOTHING... Why should the retired soldier's pay more when the active duty are paying nothing?

end rant... Seriously though, if they made those two changes, they could probably leave our retirements alone and still have money left over to boot!


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## jessimeredith (Sep 12, 2004)

I can agree with the dual BAH...over here it isn't much of an issue though as E5 and below (in our Garrison) are required to live on post and off post housing is pretty hard to come by close to post.

A deductible I could also agree with, but I'm not sure about a co-pay. People like us would get supremely screwed with that one. We don't visit the ER all the time (probably because we were civies with kids first and learned real quick to detect a real emergency, lol) but the specialists that the eldest kiddo had to see when they were trying to figure out exactly how deaf he was and how it happened would seriously make a paycheck negligible for a while. All I wanted them to do was figure out how deaf and get the kid some hearing aides...that alone took them 8 months because of Tricare red tape. I do agree though that Tricare is pretty darned abused. 

In defense of the spouses here (omg I can't believe I'm defending these nutcases!), our clinic closes at 1630 on most days, getting an appointment takes a week or longer and they don't see "emergency children cases" (ie a fever over 101, broken bones, etc). While Landstuhl is fairly close (45 min or so depending on how you drive...25 for me), it is still closer and more often suggested by our own medical personnel to go to the Krankenhaus. And yes, it does cost a pretty penny to Tricare. The only solution to something like this though is one that has been shot down and laughed at as being out of the question...a small emergency room (triage sort) at our clinic.


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## tkrabec (Mar 12, 2003)

I have no problems with them making changes. However people already at that level NEED to be grandfathered in. It is complete BS to go back and lower the level of service & benefits to those who served or who are serving when they are laying their lives on the line.


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## NickyBlade (May 27, 2008)

Living on post is not any different. The senior ranking of the couple loses their BAH to housing... the other spouse pockets their BAH.

Edit to add:
We chose Tri-care standard so we could go to whatever doctor we choose. I believe there is a cap to the amount of out-of-pocket 20% co-pay. It might be a grand or two... not sure. So, you'd only pay up to the cap if you were having open heart surgery or something.


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## Catalytic (Sep 15, 2010)

NickyBlade said:


> This would probably get me beat up... But, my suggestion to the military saving money is to drop duel BAH when couples are stationed together and living together.
> 
> How is it right that a soldier gets to pocket an extra $1200 a month UNTAXED money because her husband's BAH is paying for their house? If they are stationed apart, then it's understandable. But when they are living in the same house, it doesn't seem right.
> 
> ...


Won't get you beat up by me, I think it's utter crap to get dual BAH. It's my understanding that one individual gets BAH-II which is lower than normal BAH, though. They only time they should get dual BAH is when they are STATIONED at separate installations, more than 50 or so mile apart. I'd NOT be fine with Tricare changing at this point in the ballgame, and I am NOT fine with the rates getting jacked on retirees, either. Many were promised FREE healthcare for LIFE, yeah, that didn't last. I don't even care if they change retirement, but there dang well needs to be a grandfather clause and a choice offered for current servicemembers.



tkrabec said:


> I have no problems with them making changes. However people already at that level NEED to be grandfathered in. It is complete BS to go back and lower the level of service & benefits to those who served or who are serving when they are laying their lives on the line.


Exactly.


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## jessimeredith (Sep 12, 2004)

Well...looks like they've put the brakes on it for now!

http://www.defense.gov/news/newsarticle.aspx?id=65030

ETA: For now being the key part of that, lol.


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