Panetta suggests current service members may be spared from proposed pension cuts

Defense Secretary Leon Panetta speaks during an event at the National Defense University in Washington Aug. 16, 2011.

/ AP Photo

Defense Secretary Leon Panetta on Tuesday suggested that current service members might be spared some proposed deep cuts to the military's generous retirement plan .

CBS News reported Monday that the current military retirement system is a potential target for budget cutters and the Pentagon may begin offering a 401(k) style savings plan instead of the defined benefit plan now in place.

Asked about the report at a joint appearance with Secretary of State Hillary Clinton, Panetta said "no decisions have been made," but "you've got to look at everything on the table." Panetta was interrupted by applause from audience members at the National Defense University when he suggested current service members might be exempt from changes.

"You have to do it in a way that doesn't break faith...with our troops and with their families," he said, "if you're going to do something like this, you've got to think very seriously about grandfathering in order to protect the benefits that are there."

"So it wouldn't affect the people in this room," asked moderator Frank Sesno of George Washington University.

"Exactly..." answered Panetta who was then drowned out by applause.

"You know what they say about 'know your audience,'" quipped Sesno.

"I know my audience," answered Panetta.

Panetta said the Defense Business Board, which devised the military retirement proposal, would be issuing a more complete report later this month.

Any changes would ultimately require congressional approval.

[armywife2011]

There are so many other huge components of military affairs that would have the similar impact on the budget. Take stabilization: we have moved 6 times in the last 8 years, at $100,000 a pop....for one family. Giving military families 6 or even 5 years instead of 3 at a duty station would significantly cut PCS costs, allow soldiers to do their job better with higher personal satisfaction, provide much needed stability for inner family workings from education to spousal employment opportunities to marriage support. Thus reducing the need/cost of programs supporting pcs' from mental health to special military school counselors. Stabilization is just one example of a high cost program that would have a high positive impact on the military...as opposed to the high cost of retirement, in which removing it would have a HUGE negative impact on the service members.

[frekky3574]

This plan completely sacks senior leadership in the military. Who is going to do a military job for the long haul in return for civilian retirement? It is easy for the DBB to look at numbers and say "Oh this is unsustainable". But it's also pretty easy to look at the forces and capabilities of the Army, Navy, Air Force, and Marines and say "Oh your proposed plan is unsustainable as well". Especially with the global presence we have. Since the proposal solely targets the people who have sacrificed their lives and freedom to accomplish the mission as unsustainable then isn't it a perfectly logical conclusion that the US global presence is unsustainable? They aren't taking all the operating costs involved with DOD spending at all in this proposal which completely invalidates what is sustainable and what is not sustainable.

[AOCGUY]

Actually frekky this plan does no such thing. Senior leaders (Flag Officers) generally serve well beyond 35 years so they normally don't begin drawing retirement until they are in their 60's when they would be eligible to draw from a 401(k) anyway. Also since no one currently on active duty is or will be affected by this (and there is no guarantee this study will ever go beyond the study phase anyway), assuming it is enacted next year, it will be at least 20 years before anyone would retire under this plan. More importantly the average combat troop now rarely stays until retirement so under the current system 83% of those serving never see a dime. Under the study options, troops serving less than 20 would be able to take their contributions along with those matching contributions to their new employers 401(k) or their own IRA.

Another point, under the options in this study, if enacted, the DoD would save tremendous amounts of money, some of which could be used to increase the pay of those serving, which could in-turn be invested (pre-tax) in their 401(k).

Finally, the military already has a 401(k) like option called the Thrift Savings Plan (TSP)

[frekky3574]

To AOCGUY: I'm not necessarily talking about Flag Officers when I say senior leadership,,,,Plus it's just one facet of my argument. There is no doubt costs should be cut but not at the expense of current members pension(which this article alludes to). Current service members were baited by promises of the current pension to stay in hope of reaching 20 years. This in return for enlisting for several more years to fight our longest war in history. Most of them would have re-evaluated their career options had this not been the underlying incentive sold to them by all the "retention gurus" and pursued another career or used their GI Bill for college. Unlike the civilian world they are stuck in these contracts for years at time without being able to switch employment if there is better opportunity. Then when it's time to separate many aren't able to make a proper transition due to high OPTEMPO. The bottom line is they've been unfairly subjected to "Bait and Switch" tactics with these pensions to spur retention. If that doesn't constitute fraud against our current servicemembers I don't know what does.

[seenoland]

People in the military are the ONLY government workers that have EARNED their pensions. Leave those people alone, let's cut government union pensions instead.

[ALBrainTrust13]

I think it is OUTRAGEOUS and STUPID to AT THIS TIME OF WAR(S), propose to change retirement benefits.

There is a reason why our VOLUNTEER MILITARY works so well.

As soon as ALL Federal employees (CONGRESS INCLUDED) goes on a 401K plan, THEN you can start talking about military pensions.

[slatep]

No one who has been deployed to a foreign country multiple times to fight never-ending wars should have their pensions cut.

If you want to cut somebody's pension, start with the President, our self-serving Congress who to date have done nothing but damage to the United States, don't give multi-million dollar a year pensions to business and banking executives who robbbed taxpayers blind and then were bailed out, cut union pensions, etc.

BUT; don't you dare cut the pensions of those who devote their lives to keeping the ***** of the above safe.

Ask the President and Congress to explain why it is always threatening to cut military pensions, Social Security and Medicare FIRST.

These people have contributed all their lives to their pensions, Social Security and Medicare.

It's the thieves and corrupt officials we call Congress, big businesss, the Federal Reserve, Wall Street (responsible once again for investors losing their IRA's, etc) and the banks that are reposessing people's homes (who knew full well these people were going to be unable to pay their mortgages)who should have their pensions reduced.

To Obama, Congress and Panetta: You should hang your heads in disgrace for even considering cutting the pensions of our military.

These brave souls have given their lives, their limbs, their sight, their once healthy minds to defend the United States only to be threatened they might not get their paychecks because Congress has decided to play games with each other for purely political reasons.

When our troops come home maimed , wounded and scarred physically and mentally they have to file reams of red tape to get benefits they should have started to get the minute they set foot on American soil.

Many wait months for benefits, many commit suicide because they have been deployed so many times they have had all they can stand, medical treatment is shoddy, psychiatric help is even worse, some have lost their homes while deployed, many have no jobs to come home to AND YOU WANT TO CUT THEIR PENSION WHICH YOU HAVE THE GALL TO REFER TO AS "GENEROUS".

I DON'T THINK SO.!!

[trybeingshotat]

Thank you thank you thank you...to compare this to ANY civilian job, even police and firefighters, is just wrong wrong wrong wrong It is much more difficult

[imnho]

If you want to have an all volunteer army with resonable turnover then this plan will not work

[ludvig1-2009]

Take away the pension and no one will join the military. You'll have the Army, the Navy, the Marines and the Coast Guard fighting over 50 recruits for the entire country. People aren't stupid. They won't enlist. Forest Gump won't even enlist.

[mommabearofboys]

My problem with cutting the pension of the military is that once again those with the smallest piece are the first to get cut. I suggest that the cuts start with the generous benefits that our Congressional members, and make them have to start contributing to their retirements and healthcare benefits just like the majority of the US working force. Let them see how to live like the people that they are "representing". Leave the military alone - they are the front line and final defense for the entire country and the hardships they endure to serve and protect are taken as a honor. Please give the men and women who serve and protect the right to a fair retirement.

[wtthfk]

Amen.

[FreeSpeechandPress]

mommabearofboys .... well said!

IMO Politicians and unionized gov't jobs have played a part in getting us into this mess, they should be a part of the solution as well.

In order for most businesses to remain competitive, they have to make 'adjustments' along the way, such as employee salary's, benefits etc. .... the gov't on the other hand, usually passes the rising costs on to the taxpayers, as they don't need to remain competitive with anyone.

Of course, there are business exceptions to this as well, where the gov't stepped in with taxpayer dollars to help bail them out.

[venusvegasvada]

It used to be Defense contractors only provided technical assistance. The military did EVERYTHING. Then slowly the bean counters thought we can replace these military folks and those with contractors. Because contractors are throw away labor. No long term benefits and costs and even if you do keep them for the long term you just give the contract to another company every 5 or 10 years and reset every bodies wages. They along came Iraq and the military had to increase their size. Oh! Can't do that without going to the public so they slipped in even more contractors but with a twist. They gave some guns which really shouldn't have happened. Now contractors were shooters which the entire system was never really setup for (UCMJ vs Constitution, etc). Contractors deaths don't get reported either. No recognition, a pure throw away solution to the problem. Now they are eyeballing the military and it appears they want to blend some of their disposable contractor tricks with the military. Where will it lead? Will we even have a military in 30 years or will it all be contractors with military leadership?

[wtthfk]

Amen.

[FreeSpeechandPress]

Maybe they should 'consider' firing ALL gov't employee's EXCEPT vital personnel, military, police, fire etc and then immediately hire those fired folks back at a reduced rate and benefit/pension structure that city's, county's, states and federal gov't can actually afford? .... I'm pretty sure the union's and probably others would jump up and down, complain loudly and probably sue.

It appears our gov't is "obese" financially and should consider going on a diet .... it has to consider which diet would be best for the majority of the american people.