I think the issue is, many of the individuals who are "more lucrative / less lazy or scared to leave the military", now have a nice little nest egg to help make their decision to leave. I don't think it will remove the guys who hit 10 years and sit until 20, their incentives really haven't changed much, nor has their ability to find a job on the outside.
I don't follow this line of reasoning. Do you not think that getting $18,600 a year to attend college + BAH + tuition assistance (because none of that actually counts as income) is enough of an incentive to leave after a single enlistment? If a Sailor is smart he won't blow all his paycheck on hooker and booze and will save at least $10-12k a year, giving him a nice liquid nest egg of about $30k by the time he is about to leave the service. Along those lines, I don't understand the logic that the
retirement system should give more benefits on top of this to a member who plans to do a 4-and-out enlistment.
It's more that if a Sailor reenlists past that point, there's an incentive for him to stay that outweighs getting his free or drastically reduced college education and follow-on civilian career, whether that something is reenlistment bonuses, transferring the GI bill to children, healthcare/retirement benefits or *gasp* actually enjoying the job.
PS: The report on retirement reform said that the military won't match contributions during the first year or two of a member's service...you know, because they still have to learn to manage their money and matching that early wouldn't be conducive to it.
/BT
Ran the numbers with the average enlisted promotion timeline (retire at E-8). The new plan will cost that guy about $132,000. A typical E-7 retiree would lose about $114,000. I also realized I fat-fingered a number and the officer loses $210,000, not $380,000, over a 40 year retirement. So pretty much regardless of promotion structure it results in about a 10% loss in retirement if they live to see 80 years old with just contributing the 6% + 5% match, and the sooner a person passes away the more of a cut to retirement benefits they experience (about 15-17% if he passes away before 70, 20% obviously before 60).
This delta from the 70-80 years old range can be reduced to around 6% at the 70-80 year range if you withdraw the fund at a rate that it is depleted by 80, with the plan to just take the 20% hit after that.