Radical overhaul of military retirement eyed

(CBS News) 

WASHINGTON - The military retirement system has long been considered untouchable - along with Social Security and Medicare. But in these days of soaring deficits, it seems everything is a potential target for budget cutters. A Pentagon-sponsored study says military pensions are no longer untouchable - they're unaffordable.

CBS News investigative correspondent Sharyl Attkisson reports high-level, closely-held meetings are taking place at the Pentagon regarding a radical proposal to overhaul retirement for the nation's 1.4 million service members - a bedrock guarantee of military service.

The proposal comes from an influential panel of military advisors called the Defense Business Board. Their plan, laid out in a 24-page presentation "Modernizing the Military Retirement System," would eliminate the familiar system under which anyone who serves 20 years is eligible for retirement at half their salary. Instead, they'd get a 401k-style plan with government contributions.

They'd have to wait until normal retirement age. It would save $250 billion dollars over 20 years.

Douglas Holtz-Eakin, former director of the Congressional Budget Office says it's very important that the military attack its retirement issues. "We're talking about an underfunding that starts to look like hundreds of billions of dollars in the next 20 years. And if you want to maintain the core mission which is to defend the nation and have the strategic capabilities we need, we can't have all their money tied up in retirement programs."

Advocates say the new system would not only save money -- but would also be fairer. It would give benefits to those who serve less than 20 years. Right now, they walk away with nothing. And it would give more money to those in combat or high risk situations.

The proposal leaves a lot of blanks to be filled in, including whether to exempt current service members so their plans won't change.

CBS News spoke to some active duty troops who agreed costs must be cut - but worry the number of experienced soldiers will dwindle with no incentive to stay enlisted for 20 years.

The proposal is in early stages and would require Congressional approval. But it's clear that military retirement is no longer untouchable. A Pentagon spokesman said the military retirement system "is a fair subject of review" but no changes will be made "without careful consideration."

[Retired--USA2003]

Lets not mince words; this is not about cutting military benefits and entitlements because congress and DOD are very good at these things. This is about maintaining a 100% voluntary military. Cut too many benefits and you remove the lure for a volunteer force. The one thing our country hates more then having its money taken to fight wars is to have its children taken (conscripted) to fight wars.

[alan_jones]

A change in the current military retirement, without more in-depth analysis, will cause significant turmoil in our military force. The poor financial state we currently face in our country is real and needs to be faced head on, but our country's challenge will not be solved with one dimensional, short-sided ideas. The fallacy of the Defense Business Board's (DBB) analysis is that it fails to address the impact that the current retirement system has on the current culture of our force.
The DBB proposes that retirees draw a pension ~23 years after a Service Member removes their uniform for the last time. Although this proposed delay in payment would undoubtedly save money in the short-term, the mid to long-term effects would far exceed the upfront savings. Service Members retire from the service ~42 years of age. This stage in life, for all Americans, is the most expensive (e.g. mortgages, car payments, college aged children, aging parents). A proposal to the current military retirement system would disincentive Service Members from remaining in the service. Service Members would be placed in a position to choose country or family. The result would be a force depleted of its mid-management in its Non-Commissioned Officer, Warrant Officer, and Officer Corps.
Well, can't Service Members stay in, get a new job, or make better financial decisions? The Military Service is a young person's force. The requirements of the profession take a significant toll physically (similar to professional sports) and with the exception of senior leaders (four-star admirals/generals), that option is not available. What about a new job? Our great country does a good job of compensating our Service Members, and the truth is, "How marketable are ~42 old Service Members in a field with pay that is consistent with what they make in the last years of their service?" The attributes of a twenty-year veteran are immense, but does a strong work ethic and courage under fire without specific skills and experience still demand an $80K salary? Do Service Members invest? Service members made financial/investment decisions, based on their service contract, which stated that they would receive a pension upon twenty years of honorable faithful service.
Our Service Members deserve more than a one-dimensional, short-sided idea.
Respectfully,
Major Alan Jones
US Army

[Matthew_Koehler]

The Defense Business Board's (DBB) analysis concerning the military's current retirement system is fundamentally flawed for two major reasons. First, the DBB incorrectly uses private sector retirement programs as comparison models to illustrate what are termed as unfair aspects of the US military's current retirement system. Second, the DBB fails to adequately address the long-term effects of changing the current retirement system on retention.
The DBB completely disregards the inherent differences between the military and the private sector. For the purposes of their analysis and their conclusions, the DBB makes the underlying assumption that the two are adequate for comparison. This then begs the question; can you even compare the two? The DBB frames their argument by comparing the roles of military personnel directly with their civilian counterparts. Given that the roles, missions and most importantly, sacrifices of the two, are completely different, the DBB's use of the private sector as a comparison model is not adequate for the purpose of their analysis. Essentially, they are comparing apples and oranges. It may have been more accurate for the DBB to choose military retirement programs from developed nations with professional/non-conscript armed forces as a basis of comparison.
For the past thirty years plus years, the U.S. military has prided itself on being a professional, all-volunteer force. The DBB's final report reinforces this by stating, "the all volunteer force has proven to be an outstanding success". Central to the success of this all-volunteer force has been the retention of quality commissioned and non-commissioned officers (NCOs). This is illustrated in the DBB statistic that between 15 and 20 years service that only 7% of military personnel leave the service. Arguably, this population decides to stay in the military largely for the benefits associated with the military's current retirement system.
The DBB's analysis fails to address how changing the current system will affect that high retention rate. It could be argued that by removing the current "twenty-year, all or nothing" retirement plan, there would no longer be any incentive to remain in the military for the long-term. Officer and NCO's careers would likely culminate after five to ten years, once their initial service obligations were complete and they had collected sufficient skills and experience to transfer to civilian careers. This issue is further exacerbated by the demands placed on our military given current service obligations. Officers and NCOs are often unwilling to stay in longer then their initial service obligations due to the stressors that exist within our high-tempo, combat deployed force.
The state of our nation's economy certainly warrants a tough evaluation of all U.S. programs. The military should be no exception. Caution should be taken though in using the findings of the Defense Business board as proof for change. The DBB incorrectly uses private sector retirement plans as a basis of comparison, and fails to address the enormous secondary effects that removing the current plan would have on long-term retention of commissioned officers and NCOs. Additional research and analysis must be conducted to rectify the shortfalls of the DBB's analysis prior to any decision-making. The military will lead the way with regard to entitlement reform, if required, but we ask for a fair and honest evaluation.

Respectfully,
MAJ Matthew D. Koehler, USA
Operations Research Analyst

[gateskm]

When I first heard about this I truly thought there is no way the government would do this to me and my career. I joined with the notion to serve 20yrs and retire. In the midst of it I've been deployed to AFG twice fighting a war to keep America a safer place. I've visited many JROTC schools speaking on how I take great pride in serving my country and I used the retirement plan and benefits the military provided to influence many to sign up. I know longer can say I would be a spokesman for the military. Two days after I visited a JROTC it was publicized on the news that the military was in jeopardy of getting paid, I really stuck my foot in my mouth with those kids. I'm currently in AFG and I honestly feel betrayed by my government...my president...my military family but with my integrity and pride I will continue to serve for the American people b/c if we don't serve who will and now with no incentives not many will even consider. Deploying is not easy on the individual or families we follow orders in faith that those making the decisions are doing it with integrity and honor. Many families will be devastated if they loose the current retirement plan, and those are military families who are loosing loved ones every day. What I can't figure out is when the government decided to cut costs they looked at us first, why not those who sit in cushion seats in congress that get a pay check plus a car, house and incentives as well. If you look at the statistics the military members are still under paid to the inflation every year it costs to survive and stay equal to everyday living. It's not glorious to be in the military and those of us that stay in do it for honor, but it hurts deep inside to have that honor thrown in your face by our government. If the current retirement plan goes away the government will loose the trust of the people..people of America, just because I serve don't mean I'm no longer considered one of those people. If they want to cut costs there are many other areas the country can do that in. One day this war will end and another will start but where will the military volunteers come from. Trying to make a quick fix will hurt us in the long run. I never lost trust in my government but here lately....I have! Oh and I've been serving for 15yrs in the AF and deployed numerous times but I guess that doesn't matter anymore.

[toriebean1986]

Im so horrified by this!!!!!! You want to make budget cuts? ok start with the congress and there pay checks.
WE should be supporting our troops not hurting them and there loved ones... YOU say you spend to much money on hurt soliders and retirement on them... ARE YOU KIDDDING ME!! They are dying for YOU! They leave there families for YOU!!... They miss the chldren being born, first steps and first words... They support you ever single day and all they ask is for YOU to support them back. When there over seas they need to focus on there mission not... how can I help my family since the military wont help them if Im gone.
I read something that it would save 250 Billion over 20 years. That is rediculous!! That is not even close to what we need to fix the budget. Its chump change! So all that for what? A few extra dolllars?! They need to fix the corporate tax incentives and get that 600 billion A YEAR! That would help. Not something that will add up to 250 billion in 20 years!
Stop hurting and taking away from the SOLDIERS who are the reason you get to sit home in your warm bed every night. They fight and give there life to keep you safe yet you treat them this way? You should be ASHAMED of yourself!!!

[marinesmom]

I fully agree!!! lets see all of congress take a 15% pay cut, give them no more benifits than our troops are getting, Let's see how many BILLIONS of dollars that would save this country. Our troops are working 24/7 to keep our country safe, they aren't going on extravigant excursions, their families spend countless hours worried every time that troop leaves home. many miltary families suffer in more ways than congress will ever know.or even understand. Lets support our troops, not take away from them and their families!

[JAJNCE]

I agree, Congress, the President, and all government employees should undergo the same changes to their pensions. Is the President planning on reinstituting the draft? That is what it will take. Current experienced servicemen are preparing their papers to leave the service in droves. They have been told this will happen, they will lose 85% of their pensions.

[benth164]

The BILLIONS he is speaking of, is a drop in the bucket, LITERALLY !!
To slit the throats of the very people who supposedly keep our nation safe will create a military force of psychopaths who follow orders and kill indiscriminately for the fun of it, because having retirement money is not their primary motivation.
We are just beginning to see just what happens to the mentality of our military forces when the "DRAFT" was voted out, and it became an all volentary force. There were warnings of the psychological changes that would take place when brains were taken out of the equasion. We need college educated men and women to ballance the psychopathic tendancies of those looking to play war games with their lives.
The morons who thought up this ridiculous overhaul have an agenda to promote, which has nothing to do with clear thinking and everything to do with substantiating their job positions. This is like our government wanting to cut a measily few billions of spending when we are TRILLIONS in debt.
IT IS LUDICROUS !!!

[T-Prop]

Dear DC:
Try applying your hare-brained plan and see what happens to your all-volunteer force.

[gcnes82]

http://www.facebook.com/pages/Sailors-and-Soldiers-For-Continuing-20-year-pension-plan/221908761194494
Hello, could you please like this page and pass it on. Thanks for your support. Nick and Jill Sawka

[Mark_Alan]

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government.
Thomas Jefferson

A man who is good enough to shed his blood for his country is good enough to be given a squre deal afterwards.
Theodore Roosevelt

[USAFMIL]

I agree with 1969Vet. 250 plus deployed days a year since 9/11, OSW/ONW/OAF/PS prior to 9/11, 2 major fronts, numerous other operations, and sacrifices made in a 24/7 environment means we EARN a retirement for our service to our country.