http://www.stripes.com/news/us/ryan-murray-deal-hits-younger-future-military-retirees-1.257099


Starting already. There will be many more over the coming years I bet.

It sucks but this has been happening in the private sector for 20+ years. My company ended our retirement program without warning. I am entitled to what was already in my retirement account with the company, but all future company contributions were stopped. It sure put a dent in my retirement planning.

The fact that the changes aren't grandfathered seems like an incredible injustice to me.

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The Ryan-Murray deal, said Hayden, reneges on assurances by Congress in setting up the Military Compensation and Retirement Modernization Commission last year, as well as promises from President Obama and his defense secretaries, that any substantive changes to retirement would be “grandfathered,” impacting only future generations of members. Current retirees or serving members were to be protected.

The budget deal, said Hayden, “basically shoots the grandfather.”

“I have to think anyone who signed on to this doesn’t understand the full effect it will have on purchasing power of promised retired pay,” Hayden said. The message being sent to the current force and younger retirees is, he said, “they just changed the rules on the benefit you signed up for.”

To do so without the armed services committee holding a single hearing, and without any analysis conducted on the impact on force readiness, said Hayden, is “absolutely insane.”

“You have a group of lawmakers not affiliated with the military that completely backdoor these changes,” Hayden said.

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How is this acceptable? I am intimately familiar with operating within the shrinking budget, but we're talking about being faithful to a group of retirees (or soon to be) represented largely by those who served through a decade of war.

I don't think they realize the over all detrimental effect this will have on our armed forces ability to retain qualified senior grade officers. As it is now, many of the best and brightest don't stay past their initial service obligation.

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How is this acceptable? I am intimately familiar with operating within the shrinking budget, but we're talking about being faithful to a group of retirees (or soon to be) represented largely by those who served through a decade of war.

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It sucks but it is certainly within the authority of the civilian government to take such action. I can't say that I won't regret not having the higher COLAs in my retirement pay but frankly, I wasn't promised any specific formula for the calculation of COLAs 23 years ago when I embarked on what became a career in the military and neither was anyone else. I'd rather have the money but I can't get indignant and claim that the government is reneging on a promised benefit to me just because they changed the way the future COLA for retirees is calculated. Every Congress passes legislation to fund the military and each year they do it a bit differently.

From my first full year on active duty in 1991 through the 2013 pay charts, the base pay for a BGen (26yrs TiG) has increased 100%, a Maj (12 yrs TiG) has increased by 114%, and a the bae pay for a Sgt (8 yrs TiG) has increased by 119%. During the same period the inflation rate in the US was a cumulative 71.5%. Military pay has increased at a rate 60% faster than inflation over that period. That's just the base pay and other indirect compensation such as improved GI Bill and getting rid of Redux made it even better.

There is no pay gap that leaves the military short of what a similar education would bring in the private sector. Since at least 2006 non of the services have yet missed their enlistment and reenlistment quotas which is an indicator that the compensation is still enough to keep the ranks filled. Does the reduced retirement COLA formula cause some mid-career military to leave for the private sector because they want to vest in a matched 401k? We will see.

The shifting ratio of defense expenditures that tilts every year more away from current force readiness and capabilities and more toward Veterans compensation can't keep moving in that direction. I respect the contributions of Veterans and especially the combat disabled Veterans (who richly deserved the benefits of Concurrent Receipt that had been denied them from 1894-2007) but we have a Defense budget first and foremost for defense and the readiness of the current force has to take precedence. Feel free to remind me of that statement ten years hence when I'll be drawing my reduced pension and see if I become a hypocrite on the subject.

Just to put this in perspective, any of us who entered the military between the years of 1987 and 1998 got a huge and unpromised benny when Congress repealed the Redux (40% High-3) pension plan that was the law during those years. Redux sucked and especially so before the introduction of the military TSP. I doubt that I would have stayed till retirement eligibility if they had not repealed that. But...when retention and the rank pyramids became unstable the Congress took action and the pendulum swung the other way. When the time comes it will swing the other way again but because of the active duty force, not because of Veterans.

Those military personnel who decide not to continue on active duty or in the reserves because of the reduced retirement COLAs are part of the calculations at OSD P&R. We are in the midst of a continuing drawdown (I'll be pleasantly surprised if the Marine Corps is able to dig in its heels at 174.5k active duty strength). Leaving voluntarily because of dissatisfaction over reduced benefits is still better than being told to leave with no option to stay.

In 1998 the DoD was in the sixth year of the post-Cold War "peace dividend" which meant (much as today) that money for training, O&M, and new systems was woefully short. Congress and the two Presidents who presided over the peace dividend drawdown should have never let it get as bad as it did in the 1996-1998 time frame. When the mistake could no longer be ignored (thanks to the JCS led by Gen Shelton who helped SecDef Cohen find his backbone and point him toward the White House) the President signed a reeal of Redux and grandfathered all of us who had started service under Redux to go back to the good old 50% High-3 formula. Two years later the federal government added access to the TSP to the package. Five years after that they revamped the crappy old MGIB into the very magnanimous Post 9-11 GI Bill replaced the MGIB. In that seven year period of the pendulum swinging back to largess the present value of my personal future government compensation increased by probably millions of dollars in future treasury outlays that I was never promised or contracted to receive.

No one who enters the military gets to choose where or when they will deploy to fight nor how Congress and POTUS will pay and provide health care and other benefits. Cutting the COLAs shows a lack of appreciation for Veterans relative to other priorities but I would not go as far as saying that faith has been broken.

I feel similar as U90. I think future cuts will be much worse and will come in the next 10-20 years.

There are plenty of areas that I would prefer to be cut first both inside DOD and other govt agencies. We are hugely inefficient, but with personnel costs eating up more of the overall budget each year it is going to be an area that will be ripe for future cuts.

I also don't like how they back-doored this thing without a discussion but that is politics for you.

[This message has been edited by GatorAg03 (edited 12/14/2013 8:28a).]

Also, keep in mind that nobody is guaranteed 20 years of service just by signing up.

I know folks who were Majors in the USAF that were forced out at 16 years of service because they didn't make LtCol.

The 20 or bust is another discussion entirely.

I knew going into this conversation that it would, rightfully so, turn to the realities of defense spending. I'm not going to argue against the ratios of readiness to everything else.

But this situation is wrong, and it is a breech of faith. It's a provision that was included in the budget in the most haphazard way possible, and further, the very nature of the cuts affects benefits based on time already served and in many cases, already being received.

The "Congress can do what it will with our pay etc" is a red herring. It's being the stoic and stalwart for the sake of... I don't know what.

This is about morality for me. It's about our civilian leadership doing a 180 from three, four years ago where it was rah rah military and their families. It's a small cut when you read the provision, but it's precedent for things being done the wrong way.

I understand the different pools of money, and that it pertains even more in the case of defense vs other aspects of government, but consider what's being done in defense as it compares to this.

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Also, keep in mind that nobody is guaranteed 20 years of service just by signing up.

I know folks who were Majors in the USAF that were forced out at 16 years of service because they didn't make LtCol.

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I have no doubt that one of the 'compromises' offered in the reform of military retirement is going to be a defined contribution retirement (the TSP) with matching funds that will vest everyone with some government contributed funding. The loss of COLAs is not even the tip of the iceberg. Defined benefits pensions are going away within a generation except for the service disabled. The future value calculation of ~$124k being removed over 20 years because of the 1% cut is going to be chump change compared to the cuts that will come at the reckoning. Even though the accrual of a defined contribution plan will be relatively small for those who don't stay for a full 20-30 years it has the advantage of being a privately owned account and not an IOU from the Treasury. It will be far easier for Congress and POTUS to cut COLAs and change eligibility retirements for a defined benefits plan than for a defined contribution plan owned by the beneficiary.

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It's a provision that was included in the budget in the most haphazard way possible, and further, the very nature of the cuts affects benefits based on time already served and in many cases, already being received.

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Having been oriented to the E-ring and Capitol Hill earlier this year I can say with confidence that statement applies to everything in the budget. Nothing is there because of a well considered and circumspect decision. It's there because of bunch of egotist 30 somthing ****ers who fancy themselves smart enough to write policy to govern the peons got their boss to back it. I haven't been present in the room with very many congressmen but the few that I have were disappointing to me in the topics that interested them and their poor grasp of facts.

Back to the cuts, if cuts do not affect benefits tied to time already served then they are ultimately meaningless in terms of reducing the debt and deficits. The elephant in the living room is that the lion's share of military retirees draw about twice as much in pension benefits than they salary earned during their active duty career. Add to that the cost of ~35 years of post retirement healthcare costs and that's where the estimate of the current national debt at ~$18 trillion balloons to ~$65 trillion fifty years from now.

The military pay and benefits are a miniscule problem compared to Medicare, Medicaid, and social Security unfunded liabilities but they are going to be dealt with first as the financial situation of the country worsens because the idiots in the Congress think that they can score points by 'fixing' military compensation before getting to the really politically dangerous programs. Reforming military retirement is mildly risky and MOAA is an annoyance to Congress but not a scary threat like getting AARP pissed off.

Ideally, they would be making meaningful cuts to avoid the looming insolvency of Social Security and Medicare simultaneously with reforming military pensions but regardless, the economy and the nation are headed for a trainwreck that probably is not avoidable without deep cuts to all pensions and government funded medical care. If I thought that a 1% COLA cut actually helped the situation I'd be tremendously relieved but worse is coming and we can only hope that when it does they are concurrently making similar cuts to Medicare, Medicaid, and Social Security. Otherwise they can pay our pensions in wheelbarrows full of cash but it will be as worthless as the Marks of the Wiemar Republic by the time I'm 75 years old.

[This message has been edited by Ulysses90 (edited 12/14/2013 9:50p).]

Extremely well said, but then that's pretty much par for the course for your posts!

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Defined benefits pensions are going away within a generation except for the service disabled.

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I work with a guy who was a warthog pilot. He shattered his shoulder in an accident and was medically retired with a 60% disability rating. He gets $700 per month.

I firmly believe that he was retired due to personnel numbers, but either way he got screwed.

U90 would be better off in Washington with the multitude of great ideas on reducing this countries debt. However, once again, we disagree with these being acceptable provisions for the military to have to stomach. Mainly because not a dime of these savings will go toward paying down the nations debts. The military is being forced to sacrifice so the nation can have their handouts a little while longer. Entitlement spending is still out of control and will still have to be addressed. I personally don't think it is fair to ask those who have worked hard for their benefits to sacrifice while those who don't get constant increases. But the military is full of people who won't complain much so it is politically safe.

I'm not saying reform shouldn't touch the military, it should just be part of larger government reform. I also don't subscribe to the notion of military members being servants who should just take what is given and shut up. It's fine for military members to feel that way like most of you are. However, politicians have no right to feel that way when they don't live by that example with their Cadillac retirement plans. Are they not public servants also?

social security + federal pension =/= cadillac

http://www.senate.gov/reference/common/faq/retirement_for_members.shtml

That actually looks equivalent to what military folks get. Obviously the highest three years of service will differ greatly.

I have no illusions that any of the $6.2B that they claim will be saved by CPI-1% COLA will go to pay down the debt (the UN must have heard about the savings because they asked for $6.5B to help the Syrian refugees). The military is going to take a lot of hits to personnel budget and this is just the beginning. I'm not advocating for it but if the Pentagon does not come up with some proposals of their own then they are all going to come from the other side of the Potomac.

FWIW, I received a robomail from M&RA with a link to complete the officers' retention survey. The survey consisted of about 30 short questions about satisfaction levels answered on a Likert scale and one question at the bottom concerning a proposed reform to the retirement system. The question was whether the proposed reform would influence me to stay on active duty or leave/retire. Just compare the magnitude of impact on pension of this proposed plan to the CPI-1% COLA.

In a nutshell the plan that they are polling is this. Cut the pension to 40% after 20 years of service. In exchange, the government would contribute an amount equal to 5% of a servicemember's base pay each year beginning at the end of the second year of service into the TSP in addition to the contributions of the individual makes into the TSP. Servicemembers would be vested (get to keep the govertment's portion of the contributions when they leave the service) after completing the 6th year of honorable service. That's it. In other words, they are proposing to take 10% of the amount that you would earn at the end of 20 years (which is 20% of the current pension) and replace it with 5% contributions each year with the majority being during the lower salary years of one's career instead of the "high-3" that the current pension is based on.

I have been contributing ~11-15% to the TSP (S&C funds) since the day it was opened to the military and after almost 12 years it is only appreciated to about three frugal years worth of retirement income.

So, these are the types of 'reforms' that are being considered. It makes the CPI-1% COLA look generous by comparison. It's going to get a lot worse while Congress remains in denial about Medicaid, Medicare, Social Security, QE XXI, etc.

[This message has been edited by ulysses90 (edited 12/19/2013 2:28p).]

Gator, name another public sector job that you can be vested in 5 years and draw average retirement wages of over 50k? Not to mention their medical benefits. I'm not saying they shouldn't make more than an average military member, I'm saying they shouldn't reform military retirement until they reform their own.

U90, I appreciate your viewpoint and the special view you have of these matters. I think we agree on a lot of things but you have just accepted the reality of the situation while I remain in denial that getting my unearned government handouts is more important to the average American over military pensions and military benefits.

If the average American only sacrificed 1/4 (on a per person basis) of what is being talked about for military members losing, a huge dent could be made in spending cuts. I'm personally gonna spend probably 1k or more this year than last because of military retirement benefit reduction (and it's probably just the beginning). I'm willing to do that because even with the reduction it is still in line with what most people have if not better (health insurance). However, it is tough to stomach when most of this country refuses to give a cent to reduce our deficits. Military cuts are the democrats playground. I don't know how any current or former military member could ever vote democrat. You might call it me being a single issue voter, but it is what it is.

[This message has been edited by Mission Velveta (edited 12/19/2013 3:18p).]

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I remain in denial that getting my unearned government handouts is more important to the average American over military pensions and military benefits.

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I'm sure we do agree on where the priorities ought to be. I wish I shared your optimism. My faith in the electorate to do anything other than vote themselves a bigger welfare check and an Obamaphone was wiped out in the 2012 election.

I just don't see the 47% voting for legislators that will honor the commitment to the ~12% of the population that are Veterans. The military is an afterthought to most voters and it will take a catastrophe before they realize that the hollowing out of the force has consequences e.g. something akin to the rout of Task Force Smith. That's only what it would take to change the public perception of funding the active forces. Veterans are currently running behind Dream Act babies and the perpetually unemployed who have friends in Congress that are sponsoring bills for unemployment benefits without end because 99 months was just not enough.

That's a discussion more appropriate to the politics board. I don't think it will get as bad as post WW I when there were 15% across the board pay cuts leading to the occupation of Lafayette Park but we are in for very lean times.

[This message has been edited by Ulysses90 (edited 12/19/2013 8:46p).]

Couldn't come at a worst time. I have 21 years in service and will be forced to retire for medical reasons. It stresses me a lot and I hate that what we were promised is now being changed. For those who say we were not promised this they need to go back and listen to Obama himself. He said that we would be grandfathered if a change were to occur. I have wounds and made sacrifices that this Country will never be able to heal. I did it for the love of my Country and would do it again in a heartbeat. I hope to have a son flying in the Air Force in the next 4 years! I am just sad that my time is coming to an end and we have no union to fight for our behalf. We have to trust our leadership to take care of us and it seems that even the CINC won't do that for us. Sad sad. Man I miss President Reagan! We will get through this but I pray others will back the veterans up and let their congressmen know they are not happy with the changes.

I don't care about military pay being similar--it is--to civilian pay for those with similar education. Education may be one measure but it's just that--one measure. A better measure of pay-comparison is the job that they perform. How do we compare with accuracy? As I've said on anther thread, cutting future COLAs of mil retirees is deplorable. So what if private companies-for-profit change retirement plans? For those who want want to compare government efficiency to that of free enterprise companies, then go look at the bigger pictures. The shocker to me is that pols claim that it will save $6 billion "over 10 years." That's about twice the amount of the idiotic cash-for-clunkers. And what about Medicare/Medicare fraud that totals in the billions each year? And what about bloated congressional staffs, O's czars, and the list goes on and on. And don't forget the billion or so that went down the drain on foolish loans to O-crony companies such as Solandra. Based on today's U.S. population, $6 billion is about $20 per person spread over ten years. Twenty bucks! Sure, there is waste in milspending--billions in procurement costs as pork-payoffs to politicians. I do not that COLA cuts will stand.

The reason that military retirements are considered fair-game for reform when far larger sums are pissed away on programs such as Cash for Clunkers and deliberate loopholes that allow illegal aliens to claim refundable child tax credits is because politicians view the ROI on the expenditure of every dollar in terms of how many votes does it buy me? Military retirees are a small and electorally insignificant constituency compared to the potential votes from illegal aliens and people who actually traded in a clunker for taxpayer money. Our government has degenerated to the point of operating how the spoils of elected power can be distributed to ensure reelection. They only care about reelection. Military pensions are just collateral damage as they seek "better uses" for that money that will buy more votes through patronage.

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Also, keep in mind that nobody is guaranteed 20 years of service just by signing up.

I know folks who were Majors in the USAF that were forced out at 16 years of service because they didn't make LtCol.

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Absolutely true. My BIL was only a few weeks away from being fully invested in the retirement system when he was forced out. He was, fortunately, able to recover part of what he had lost by taking a civil service position.

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Gator, name another public sector job that you can be vested in 5 years and draw average retirement wages of over 50k? Not to mention their medical benefits. I'm not saying they shouldn't make more than an average military member, I'm saying they shouldn't reform military retirement until they reform their own.

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Nobody joins congress out of highschool because they can't afford college. You're comparing apples and oranges.

The other public sector jobs meeting your criteria would be POTUS and SCOTUS. These are the three highest levels of public service jobs that exist and are rarely taken by folks who haven't put in nearly a full career already working towards the position. That's why the vesting period is so short.

Full disclosure: SCOTUS retirement vesting is 10 years for lifetime FULL salary.

Very interesting conversation.
Being a Viet Nam era veteran and retiree some of this latter day discussion is interesting.
What upsets me most is that "before all volunteer", we were told that if we re-enlisted, or continued on active duty, or applied for "regular" officer, etc., that we would have benefits - primarily medical "FREE for life"...
Our pay was no where near the civilian par and in fact an E-1 during Viet Nam made less than $100 per month and $137.50 if married with dependents. Officer pay at the time for time in service was about double E-5 pay. But, still did not approach civilian counterpart income.
The pay that has really ballooned IS the officer pay until now, I marvel at what I could be retiring at today at the same rank I retired in 1988.
The enlisted guys, however, still remain far behind their civilian counterparts and young enlisted are nearly all elegible for food stamps, etc.
In addition, first CHAMPUS, then TRICARE and associated out of pocket costs started eroding the amounts really that are taken home versus when it was truly "all free".
Granted, the TRICARE medical payments are far less than the civilian equivalent - but, it still isn't the promised "free" that we were all told IF we would remain on active duty.
So, when the Congress starts "cutting", and doctors start either retiring or refusing TRICARE, MEDICARE, and now OBAMACARE (except young docs starting practice, or foreign born docs who are new U.S. citizens) we lose any continuity and any semblance of choosing our healthcare provider - in fact, have to hunt to find someone to take us.
It is NOT right...
Not for Military retirees,
Not for Medicare eligible retirees,
and not for Social Security recipients who worked and paid into their "retirement" for their (our) entire lifetime - only to have some bureaucrat decide it's too much and decide to reduce the amount already earned...
And tax it on top of that!
When these young turks who never served a day and who get lifetime benefits for a single tour of elected service find that their freedoms are no longer being protected...
Typically, they have no idea the heartache of TDY and PCS separation for extended periods into areas of conflict and not knowing whether they will come back in one piece - or at all alive.
Families suffer and endure all sorts of separations and inability to invest in home equity and "roots" for kids in the community THEY choose to live in...
All for country and patriotism.
Soon, we will have nothing but mercenary armys and navys and air forces that are made up of robots and people who cannot get jobs elsewhere - it really is a shame to be following the path of destruction that we are...

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It is NOT right...
Not for Military retirees,
Not for Medicare eligible retirees,
and not for Social Security recipients who worked and paid into their "retirement" for their (our) entire lifetime - only to have some bureaucrat decide it's too much and decide to reduce the amount already earned...

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I agree with this statement, but the onus is on the voters that keep electing politicians that waste the money. I think this can all be traced back to the farce that is the SS "trust fund." Its going to take cuts across the board to fix the mess we're in.