DoD panel calls for radical retirement overhaul
By Andrew Tilghman - Staff writer
Posted : Monday Jul 25, 2011 13:24:26 EDT
A sweeping new plan to overhaul the Pentagon’s retirement system would give some benefits to all troops and phase out the 20-year cliff vesting system that has defined military careers for generations.
In a massive change that could affect today’s troops, the plan calls for a corporate-style benefits program that would contribute money to troops’
retirement savings account rather than the promise of a future monthly pension, according to a new proposal from an influential Pentagon advisory board.
All troops would receive the yearly retirement contributions, regardless of whether they stay for 20 years. Those contributions might amount to about
16.5 percent of a member’s annual pay and would be deposited into a mandatory version of the Thrift Savings Plan, the military’s existing 401(k)-style account that now does not include government matching contributions.
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A critical new feature would adjust those contributions to give more money to troops who deploy frequently, accept hardship assignments or serve in high-demand jobs. It would also give the services a new lever to incentivize some troops to leave or stay on active duty longer.
The new proposal was unveiled July 21 by the Defense Business Board, the wellspring for many cost-saving initiatives adopted by the Defense Department in recent years. The new retirement plan would mark the biggest change in military retirement in more than 60 years and require approval from Congress.
“The current system is unfair, unaffordable and inflexible,” said Richard Spencer, a former finance executive and Marine Corps pilot who led the board’s eight-month retirement study.
This alternative plan would “enhance the ability of the service member to build a meaningful retirement asset [with] complete flexibility for their lifestyle or desires,” Spencer said.
The thing that burns my ass most about this new scheme to reduce the budget on the backs of those who actually provide the freedom you and I live under is, the LABOR UNIONS that represent civilian local, state and federal government employees all refuse to move into this form of retirement plan.
IF IT'S NOT GOOD ENOUGH FOR SOME DESK JOCKEY AT CITY HALL... IS AIN'T GOOD ENOUGH FOR AMERICA'S WARRIORS EITHER.
YOU WANT TO SAVE SOME MONEY?
STOP GIVING LIFETIME RETIREMENT
BENEFITS TO CONGRESS AND SENATE MEMBERS
AFTER SERVING ONE TERM IN OFFICE