Army "Right Sizing"

[Hotdogs]

A little late for a fix. If a new military retirement system were only applied to members who enlist today, the savings would not come soon enough to help ensure social security lasts more than 20 years.

Since I am well likely not to receive any Social Security payments, due to said insolvency why should I care? I'm already planning for it to not be a source of income when I retire.

Not generational warfare. I gave you the choice of reducing social security survivor benefits to a high school age child, and a recently retired E-6. And you are wrong that social security was never meant to be a living wage. But it is true that it was never expected to be the fiscal burden it is now. When SS was enacted 50% of men born didn't reach age 65. Of those that did they would only be collecting SS an average of 13 years. My point is that our society and demographics have changed and too many of our social welfare programs have not kept pace. That includes the military retirement system.

...and there lies a problem. Military retirement isn't a social welfare system. The mention of it as such is down right disrespectful. It's a defined benefit system, agreed upon when entering into the military. I have grandparents who saved for retirement and are in their mid to late 70s now. They had no problem investing into a 401K, plus what they got from social security, and an IRA, why should I feel pity on those who didn't? I haven't even gone into the issues that previous generations have made and my children's children will be paying for, long after they're dead.

You accuse me of pulling on heart strings, then you bring up war casualties. War casualties and military disability get disability payments. Different system. I am not in favor of adjusting them at all, nor are any in congress. My "sob story" was on point and meant to force a discussion about the hard choices to be made if we are to keep the country from going broke. Since no one is suggesting reductions in disability for casualties, your story is all about emotion and not relevant to this discussion in the very least.

I bring up war casualties because you expect me to make a choice between military vets and poor old grandma who didn't save outside of social security.

...and you'e wrong. Again.

The second measure would eliminate the act’s COLA reduction only for veterans who are medically retired, receiving Combat Related Special Compensation and/or Concurrent Retirement and Disability Payments.

https://veterans.house.gov/press-re...military-retirees-disabled-retirees-from-cola

Before the ink had dried on the Bipartisan Budget Act last month, co-architect Rep. Paul Ryan, R-Wis., indicated in an opinion piece in USA Today that the portion of the law pertaining to medically retired service members as well as those receiving survivors’ benefits likely would be repealed.

http://www.militarytimes.com/articl...ress-moves-restore-full-COLA-medical-retirees

Nothing personal Wink. The current budget crisis has little to do with compensation and everything to do with money and budget issues. You want to argue that military retirement is unfair and overcompensates veterans then fine, but don't give us a line about picking between entitlement programs and veterans who were used as political play cards for the last 12 years and expect us to be okay with it.

 

[wink]

Maybe junior service members shouldn't be the ones to pay for everyones bankrupt social security system? Maybe we should adjust the age to keep up with demographics? Recent suggestions to keep SS solvent were to raise the age for people under 50. I think that's pretty reasonable. ... All of the savings from cuts to military retirement are going to sequestration relief, not to a high school kid saving for college.

I don't think any military, junior or otherwise is responsible for saving SS. Any notion that money saved on a new retirement system is going to sequestration relief versus a SS beneficiary is a fantasy. There is no lock box no matter what Al Gore said. It is all coming from Uncle. Some bills just get paid before others. SS, medicare, federal retirements, military pensions (non-discretionary spending), all come before payments to Northrup, Electric Boat, or FBI Salaries. Every dollar not spent matters.

Since I am well likely not to receive any Social Security payments, due to said insolvency why should I care? I'm already planning for it to not be a source of income when I retire.

Smart. And yet you have relied on a military pension?

.... Military retirement isn't a social welfare system. The mention of it as such is down right disrespectful. It's a defined benefit system, agreed upon when entering into the military. I have grandparents who saved for retirement and are in their mid to late 70s now. They had no problem investing into a 401K, plus what they got from social security, and an IRA, why should I feel pity on those who didn't? I haven't even gone into the issues that previous generations have made and my children's children will be paying for, long after they're dead.

I'll admit that my reference to a military pension as a social welfare program sounds bad. I could have chosen other words, but in the end that is what it is. A military pension is Uncle looking after the welfare of military retirees. Not saying you need to feel pity for folks that didn't plan to augment SS like your grandparents. BTW, I include them as those that shouldn't have their benefit cut as well, grandfathered. Some people have not earned enough to build a nest egg over the years. Some have lost their nest egg in bankruptcies. Some are disabled. It doesn't matter if they planned or not. I am just arguing that those folks, already in the system or near to it, have a claim over a junior officer on active duty with plenty of time to make adjustments or tell Uncle to pack sand and start over in the real world. If going on deployment or humping a pack in the Hindu Kush makes the promise Uncle made more inviolate, then lets just have different retirement systems for half the USAF, MSC Optometrists, and every other guy in a circumstance where he doesn't get a raw deal from the military.

I bring up war casualties because you expect me to make a choice between military vets and poor old grandma who didn't save outside of social security.

...and you'e wrong. Again.



https://veterans.house.gov/press-re...military-retirees-disabled-retirees-from-cola



http://www.militarytimes.com/article/20140107/NEWS05/301070023/Congress-moves-restore-full-COLA-medical-retirees

No I am not. The articles point out there is no interest in cutting benefits for military disabled. More important, I never set up the choice you state above. Go back and check. I have said, I believe it is not an undue burden, for junior active members to accept a change in the current system to save current benefits for all those IN the system whether military disabled, SS beneficiary, military retiree etc. I could have proffered the choice between junior military member keeping his 20 year pension so he can start a new career at 40 as an educated able bodied vet or accepting change and helping insure benefits to his OCS buddy that lost a leg. But I thought that was unduly inflammatory. When money starts to run out other people we don't respect will be making the decisions about who gets what. Lets make sure we are part of a solution and not standing in the doorway while they come in through the window with something no one likes.

Nothing personal Wink. The current budget crisis has little to do with compensation and everything to do with money and budget issues. You want to argue that military retirement is unfair and overcompensates veterans then fine, but don't give us a line about picking between entitlement programs and veterans who were used as political play cards for the last 12 years and expect us to be okay with it.

I don't think you mean to be personal, but if you continue to misrepresent my position I might have to think so. I don't think current compensation is unfair. Never said so. I don't think the current retirement system is unfair, just unsustainable given the nation's debt and budget trajectory. The same people you claim used the military as pawns the last 12 years will rape the current system if we don't get ahead of the changes.

 

[lowflier03]

Guess where that COLA money went? Senate just voted to spend $6.4 billion to extend unemployment benefits.

 

[Hotdogs]

I don't think you mean to be personal, but if you continue to misrepresent my position I might have to think so. I don't think current compensation is unfair. Never said so. I don't think the current retirement system is unfair, just unsustainable given the nation's debt and budget trajectory. The same people you claim used the military as pawns the last 12 years will rape the current system if we don't get ahead of the changes.

Fair enough. I just disagree with your position. It's a statical fact (trumpeted by MOAA and other vet organizations) that the current "unsustainable" trajectory is a complete lie.

 

[Flash]

Fair enough. I just disagree with your position. It's a statical fact (trumpeted by MOAA and other vet organizations) that the current "unsustainable" trajectory is a complete lie.

The DoD puts more into retirement pay (for current and future retirees) now than active duty, $82 billion vs $60 billion as of 2010, and the delta between the two is growing at a rapid rate. That is a bit bass ackwards from how it should be, no matter what MOAA's latest news release says.

 

[Hotdogs]

The DoD puts more into retirement pay (for current and future retirees) now than active duty, $82 billion vs $60 billion as of 2010, and the delta between the two is growing at a rapid rate. That is a bit bass ackwards from how it should be, no matter what MOAA's latest news release says.

Where'd those numbers come from? The CBO?

You could also similarly notice that most if not all recent quoted personnel costs are some how only tracked starting in 2000. Not from the period 1980-1990 or 1990-2000. Only citing an increase in personnel costs, not overall budget increases. In addition as a percentage of the entire budget, personnel costs have remained the same and dropped from it's high during the early 1990s. The procurement, operational & maintnence and other portions of the budget have grown considerably as well... but everyone gets melodramatic about military pensions like a bunch of drunk sorority chicks. That my friend is also a bit bass backwards from how it should be.

 

[Spekkio]

Maybe junior service members shouldn't be the ones to pay for everyones bankrupt social security system? Maybe we should adjust the age to keep up with demographics? Recent suggestions to keep SS solvent were to raise the age for people under 50. I think that's pretty reasonable. Our opinion on that should really be the one that matters. We're the ones paying for social security and we're the ones who are going to be affected by a change like that. AND military retirement and SS are not intertwined. All of the savings from cuts to military retirement are going to sequestration relief, not to a high school kid saving for college.

I've thought about this quite a bit lately, mostly because my wife's dad retired in part thanks to his body deteriorating. He's in his early 60s. While we've figured out how to make people live longer through medical procedures and medications, we haven't figured out how to postpone the adverse health effects of aging, like arthritis, loss of vision, slower reaction times, and whatever organs decide to start acting up.

@wink
Whatever cuts you think need to be made to military retirement to 'save' Uncle Sam money, realize that there's at least a dozen non-DoD organizations you can phase out of the government entirely over the next 10 years and save even more. If military retirement 'costs' $82 billion a year, it's not hard to find that money elsewhere in a $3.6 trillion federal budget. It's a matter of priorities, and I think that retired servicemembers should have a higher priority than the myriad of departments of do nothing that comprise over $600 billion in other discretionary spending.

 

[Renegade One]

The DoD puts more into retirement pay (for current and future retirees) now than active duty, $82 billion vs $60 billion as of 2010, and the delta between the two is growing at a rapid rate. That is a bit bass ackwards from how it should be, no matter what MOAA's latest news release says.

So…what…? We should die faster? I guess that's a vote against Tricare? Which is a pretty good deal…speaking for myself, if course...

I have no idea what MOAA's latest news release says…

Are myself and my spouse (former Navy Nurse during the Vietnam era) an unwelcome burden on those currently serving? Sorry if we're on the ugly "back slope" of "bass ackwards"

 

[roflsaurus]

Ive seen those numbers in articles too, but they dont make sense to me. According to financial reports, in FY 2013 the Military Retirement Fund paid out $54.7 Billion to military retirees and survivors, while the money appropriated to active duty was $110 Billion.

http://comptroller.defense.gov/cfs/...ement_Fund_Financial_Statements_and_Notes.pdf

http://comptroller.defense.gov/defbudget/fy2013/fy2013_m1.pdf

Those are the most accurate numbers I can find. Don't those numbers make more sense, though? I mean, if only 17% of military service members retire, and they only make roughly 34% of their regular military compensation (also cited in the MRF financial report)... Even if they're getting paid 2x as long in retirement, how can we be paying them 133% of what we pay active duty....?

 

[Flash]

Where'd those numbers come from? The CBO?

You could also similarly notice that most if not all recent quoted personnel costs are some how only tracked starting in 2000. Not from the period 1980-1990 or 1990-2000.

The source is the military budget, by way of this article. The chart that depicts active duty payroll and payments for retirement goes all the way back to 1985.

Only citing an increase in personnel costs, not overall budget increases. In addition as a percentage of the entire budget, personnel costs have remained the same and dropped from it's high during the early 1990s. The procurement, operational & maintnence and other portions of the budget have grown considerably as well... but everyone gets melodramatic about military pensions like a bunch of drunk sorority chicks. That my friend is also a bit bass backwards from how it should be.

As I said in an earlier post addressing the percentage argument:

And while some have pointed out that personnel and costs have stayed steady the past ten years or so as a percentage of the [military] budget that doesn't take into account the massive increase in military spending (is OCO funding included?) we have had since 9/11 and the fact that pensions and medical care are obligated funds that will continue to increase even if cut.

The massive increases in the defense budget since 9/11, especially when including the OCO funding that came on top of the 'regular' DoD budget, is rapidly coming to an end. While retiree pay and medical care are growing at a pretty fast clip and are 'obligated' funding that can't be cut very easily as has been amply demonstrated by this latest brouhaha, the same can't be said of procurement and O&M. O&M was cut really hard with sequestration, it was the easiest to cut on such short notice. Expect more of the same further down the road with procurement as well if retiree and medical costs aren't controlled better.

Ive seen those numbers in articles too, but they dont make sense to me. According to financial reports, in FY 2013 the Military Retirement Fund paid out $54.7 Billion to military retirees and survivors, while the money appropriated to active duty was $110 Billion.

http://comptroller.defense.gov/cfs/...ement_Fund_Financial_Statements_and_Notes.pdf

http://comptroller.defense.gov/defbudget/fy2013/fy2013_m1.pdf

Those are the most accurate numbers I can find. Don't those numbers make more sense, though? I mean, if only 17% of military service members retire, and they only make roughly 34% of their regular military compensation (also cited in the MRF financial report)... Even if they're getting paid 2x as long in retirement, how can we be paying them 133% of what we pay active duty....?

Take a closer look at some of those numbers, included in the $110 billion you cite is 'Retired Pay Accural' and is not paid to servicemembers now, I believe it is money that DoD budgets for current servicemember's future retirement payments (part of the $82 billion I cited earlier). As I have noted before the $82 billion figure I cited includes current retirement payouts and DoD budgeting for future retirees, money put in the DoD retirement account today for the approximately 17% of people on active duty now that will retire. Comparing the chart in this article with those numbers it appears that only basic pay was counted ("payroll") in the article and not BAH and other allowances. Even when BAH and allowances are included the amount the DoD puts into its retirement accounts would even overtake that sometime in the near future.

So…what…? We should die faster?

Hey, you said it and not me.

 

[zippy]

The 20 year pension as we know it may be going away, but a new arrangement may not be as big a hit as it would seem. RLSO mentioned the new Boeing package. OK for them, but not for the military? Lots of research out there about various pension transition plans and in many cases the employee does better in terms of retirement income. That is why I say we have to get ahead of this and make the very best of it. Yes the government wastes billions and one can argue priorities are mess up. But it isn't going to get your 20 year pensions off the table forever. The longer we wait to buy into a major overhaul the more painful it will be. To date the only material change has been a decrease in the automatic amount a retiree's pension goes up annually, by just one percent. And then, only to age 60, when it is presumed the retiree will be depending on his pension more. Sorry, all the angst is chicken shit. In the last budget debate on the Hill I bet 90% of us was decrying the wailing and gnashing of teeth over a reduction in the expected increased to the federal budget. One percent reduction in cola until age 60 is absolutely survivable. It isn't the money. It isn't the broken "promise." It is the camel's nose. Kick the camel out of the tent and put a halter on it. The current system will not survive. We have to be a part of the change.

The government rehabbed the CSRS retirement system in the 80s and replaced it with FERS. In that case, the new Pension system (which forced Govt civilian employees to contribute to Social Security, and reduced their overall pension % as well as COLA adjustment and supplimented that with TSP matching funds) took effect for employees hired AFTER the date enacted, not those mid career or in retirement already.

For those currently Active Duty, we're talking about upto a 22% decrease in purchasing power before age 60, and most 20 year military pensions certainly aren't lavish, especially for those junior enlisted who are being medically retired or are disabled.

 

[zippy]

The equivalent for the reserve side of the house would be Congress adding into a spending bill that to further decrease DoD personnel cost, that effective immediately reserve pensions shall not be collected by retired members until they reach full retirement age, as defined by the social security administration (aka 65-67 depending on when you were born) and response being that that's a bit of a hit, but as long as a reservist planned accordingly (aka plan to wait an additional 5 years before they receive any pension) they shouldn't be affected by it too badly. It's not going to reduce their lifetime earnings by much and overall its a good thing for DoD because personnel cost are unsustainable.

 

[wink]

The equivalent for the reserve side of the house would be Congress adding into a spending bill that to further decrease DoD personnel cost, that effective immediately reserve pensions shall not be collected by retired members until they reach full retirement age, as defined by the social security administration (aka 65-67 depending on when you were born) and response being that that's a bit of a hit, but as long as a reservist planned accordingly (aka plan to wait an additional 5 years before they receive any pension) they shouldn't be affected by it too badly. It's not going to reduce their lifetime earnings by much and overall its a good thing for DoD because personnel cost are unsustainable.

Was this meant to be a hypothetical or analogy? As a hypothetical, if it were to effect junior folks, say reservists under the 10 year point, and of course new recruits (which is all I have advocated), I'd say fine. I have never advocated the active duty equivalent of telling a grey area retired reservist at 58 years old the goal post has been moved.

 

[Hotdogs]

The massive increases in the defense budget since 9/11, especially when including the OCO funding that came on top of the 'regular' DoD budget, is rapidly coming to an end. While retiree pay and medical care are growing at a pretty fast clip and are 'obligated' funding that can't be cut very easily as has been amply demonstrated by this latest brouhaha, the same can't be said of procurement and O&M. O&M was cut really hard with sequestration, it was the easiest to cut on such short notice. Expect more of the same further down the road with procurement as well if retiree and medical costs aren't controlled better.

Again, you quoted an article calling military retirement a "social welfare" program - The NY Crimes no less. I did not see any credible sources.

CBO has projected DoD’s health care costs through 2022. CBO based its projections of costs in part on aver- age growth rates within the military health care system between 2006 and 2011, which, in most categories, have been significantly higher than the corresponding rates in the national economy. For example, DoD’s spending per user for purchased care and for direct care at MTFs increased at real rates of 4.2 percent and 3.2 percent per year, respectively, compared with a national average of 1.3 percent per year for a comparable composite category

http://www.cbo.gov/sites/default/files/cbofiles/attachments/11-14-12-MilitaryComp_0.pdf

http://comptroller.defense.gov/cfs/...ement_Fund_Financial_Statements_and_Notes.pdf

We all know what was going on in 2006-2011 to potentially cause an increase in military health. Projecting rates out to 2022 to sustain that same rate is downright criminal and would get any civilian corporate accountant fired. These are the same numbers that are now being included in overall military personnel costs. You also throw in the fact that pay raises are going to be flat until 2017, we're drawdown the force, and it makes me wonder what numbers (It's not clear....and I don't trust the NYT) are correct. I personally think the 1 trillion in unfunded liabilities for future retirees needs clarification (can't find one as of yet....weird), which will result in the total amortization of yearly payments (around $67B FY13) from the Treasury department, into the MRF. (See CBO MRF article) In addition to the fact that the fund itself accrues pretty significant interest (Could change based on US credit) and currently has around a $500B balance. It's been awhile since I've done financial accounting in college, nor am I am an expert on how the comptroller moves money around but it smells funny, especially after how they calculated future military health costs.

Although CBO has not developed a list of specific changes to DoD’s procurement programs that could achieve those savings

Other budget options included in the CBO DoD budget article basically only entailed cutting the entirety of the F-35 (don't care...another rabbit hole) and nothing else with real thought, such as delaying, not purchasing, parts or some of acquisitions projects. Look at what the Air Force spends on just missiles and space each year and tell me there isn't room for savings. Not even getting into the other parts of the Federal budgets with regards to entitlements, and I've already beat that horse. The SecDef has already came out and stated current service members will be protected (Well see how far that goes) from any changes or removal from the current pension plan, so I'm not overly concerned about it, but it is jacked up, considering what the last decade has done to some service members.

 

[Flash]

Again, you quoted an article calling military retirement a "social welfare" program - The NY Crimes no less. I did not see any credible sources.....

The sources you seek are on this very thread, you just have to actually do a little digging for them. How about we take a look at the links roflsaurus so helpfully posted earlier? The first number we can figure out is the 'payroll' using this link:

http://comptroller.defense.gov/defbudget/fy2013/fy2013_m1.pdf

If you bother to open it up and look at page 15 you will see basic pay to active duty military servicemembers totaled $56.4 billion in FY11 and reservists were paid $2.8 billion (excluding the National Guard who were paid $3.1 billion, not sure if they were counted since they are 'state' personnel unless federalized) for a grand total of $59.2 billion. I know it might be shocking but any total of the three figures is awfully close to the $60 billion for 2010 that is quoted in the article.

As for the $82 million for retirement refenced in the article the second link provided by roflsaurus again gives some pretty good data:

http://comptroller.defense.gov/cfs/...ement_Fund_Financial_Statements_and_Notes.pdf

On page 17 it lays out how much they anticipate paying retirees in 2014, $55.3 billion, while putting a total of $27.4 billion in the Military Retirement Fund (MRF) for future retirement obligations for a total of....wait for it.....$82.7 billion. Not that far off of the 2010 figure in the article. As a bonus the chart also has the payroll figure projections from 2014 onwards as well with the payroll in 2014 expected to be $65 billion, again not that far off from the 2010 figure of $60 billion in the article.

Just because you don't like the news doesn't make it inaccurate. Reputable news sources from across the political spectrum to include the New York Times, Wall Street Journal and The Economist all play it pretty straight with the numbers they use and cite, their credibility and in the long term their very survival is at stake if they don't. In the article I cited the numbers are pretty much dead on, especially when compared to the table in the second link that provides both figures in a pretty easy to read table......even for a jarhead .