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New Retirement Plans
- Thread starter wlawr005
- Start date
Did you mean something like this?
A few things jump out at me. First is the TSP...contribution? I can't call it a match because you don't even need to contribute to get it. After you're vested two years, the government starts putting deposits equal to 5% of your basic pay into your TSP account (actually, it's a separate account from your own, because you won't be able to touch this money until age 59.5), with absolutely no action required on your part. Pro: you don't need to put up a match, good luck finding anything like this on the civilian side. Con: you can't touch it until retirement. This won't make a difference to most, since if it were in your TSP, you probably wouldn't touch it anyway, but if you were civilian, you could roll it into a Roth IRA after employment, and then there would be a few ways to get that money with no taxes or penalties. The two main ways are disability and first-time home buyer.
They mention once or twice a cash retention bonus, some sort of lump sum around twelve years' service. But it's not clear whether you need to extend your commitment to get it. I imagine so, but I'm not sure how much. Further, I'd wonder if it was mutually exclusive to the ACCP, since they sound very similar and will happen around the same time in a pilot's career.
Then there's the changing multipliers, which probably had to be done. You can now no longer earn half your basic immediately after getting out at 20 and taking a job in the civilian sector. It'd be closer to 35% of the high-3 if you want it immediately. But when you reach retirement age, you take distributions from the TSP, which brings your annual income up, albeit not as high as it would be under the current system. And then they're kicking around some numbers for a partial benefit or something. A lot of layers to this onion.
A few things jump out at me. First is the TSP...contribution? I can't call it a match because you don't even need to contribute to get it. After you're vested two years, the government starts putting deposits equal to 5% of your basic pay into your TSP account (actually, it's a separate account from your own, because you won't be able to touch this money until age 59.5), with absolutely no action required on your part. Pro: you don't need to put up a match, good luck finding anything like this on the civilian side. Con: you can't touch it until retirement. This won't make a difference to most, since if it were in your TSP, you probably wouldn't touch it anyway, but if you were civilian, you could roll it into a Roth IRA after employment, and then there would be a few ways to get that money with no taxes or penalties. The two main ways are disability and first-time home buyer.
They mention once or twice a cash retention bonus, some sort of lump sum around twelve years' service. But it's not clear whether you need to extend your commitment to get it. I imagine so, but I'm not sure how much. Further, I'd wonder if it was mutually exclusive to the ACCP, since they sound very similar and will happen around the same time in a pilot's career.
Then there's the changing multipliers, which probably had to be done. You can now no longer earn half your basic immediately after getting out at 20 and taking a job in the civilian sector. It'd be closer to 35% of the high-3 if you want it immediately. But when you reach retirement age, you take distributions from the TSP, which brings your annual income up, albeit not as high as it would be under the current system. And then they're kicking around some numbers for a partial benefit or something. A lot of layers to this onion.
Some major airline B plans do this like Delta 12%, United 16%, FedEx 7%, UPS 12%...just to name a few.
??? My current employer, and many others I have looked at their benefits packages have direct contributions, varying from 3% up to 19% of pay, each have a variety of vesting timelines, some with none required. Maybe I misunderstood your post, but so far to my experience, there are quite a wide range of attractive options in the civilian sector.
Whoop, my bad. This is the first I'm hearing of anything like this. Are they currently being offered? I know a lot of airlines cut their matches during the recession.
But at any rate, looks like I was way off. I guess you actually WILL have good luck finding this on the civilian side.
But at any rate, looks like I was way off. I guess you actually WILL have good luck finding this on the civilian side.
LFCFan
*Insert nerd wings here*
I read elsewhere that there will be grandfathering.
I worked at a state university and had a 10% contribution (the equivalent of 10% of my salary) with no contribution required on my part. Went a long way toward making up for mediocre pay. IIRC, there was no vesting period required, either, though I wouldn't swear to that.
I recently took a survey for CNAF regarding retention and incentives. At the end the survey asked "what question didn't we ask that we should have?"
I answered with the following:
You need to find where the line is when people say "screw it, I'm staying anyway" when retirement plans for currently serving service-members are drastically changed. If I woke up tomorrow and found out that (at 14 years) that I would not be getting 50% at 20 years, I would immediately submit my resignation. At that point, every additional day I spend in uniform is a day I'm not earning more income on the outside.
They need to find out where the "I'm staying anyway" line is.
Additionally, how many of you were surveyed for the poll that concluded we would all prefer more up front cash to deferred in-kind benefits? I suspect this was a result driven survey where the respondents were selected based on the likelihood they would provide the DESIRED response... If it needs spelling out - how many of the PO3s in your command are going to say "No, I don't want more cash now - keep it and give it to me later."? I'd be very interested to see the demographics of those who were asked to participate - specifically, how many of them had more than 8 years of service.
I answered with the following:
You need to find where the line is when people say "screw it, I'm staying anyway" when retirement plans for currently serving service-members are drastically changed. If I woke up tomorrow and found out that (at 14 years) that I would not be getting 50% at 20 years, I would immediately submit my resignation. At that point, every additional day I spend in uniform is a day I'm not earning more income on the outside.
They need to find out where the "I'm staying anyway" line is.
Additionally, how many of you were surveyed for the poll that concluded we would all prefer more up front cash to deferred in-kind benefits? I suspect this was a result driven survey where the respondents were selected based on the likelihood they would provide the DESIRED response... If it needs spelling out - how many of the PO3s in your command are going to say "No, I don't want more cash now - keep it and give it to me later."? I'd be very interested to see the demographics of those who were asked to participate - specifically, how many of them had more than 8 years of service.
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Maybe I am misunderstanding your post but, why find the "I'm staying anyway" line, instead of just honoring the system that individuals believed they would be able to get, when they joined/reenlisted? I don't see the reason of violating ANY volunteers trust, by changing lifetime benefits to save a quick SHORT TERM buck.
I believe it was that article (or maybe another one...) that proposed that active people would be grandfathered in, however, would have the option to switch over, I think that is more than fair to those that are in as well as giving a much needed overhaul to the retirement system, that is frankly, much more "fair" to those who don't make the military a career.
They did this with Post 9-11 when it came out, so I am hoping it will be similar for the retirement system by the time I am ready to punch out.
Agreed. Existing members SHOULD be grandfathered in. I suggest the above question be used to drive the point home to decision makers just how dire their retention problem will be (or how much worse it will get) if they decide to dick around and not grandfather-in existing members.
As far as post 9/11 GI Bill. I wouldn't hold my breath on that remaining transferrable much longer. I also wonder how much longer it will remain available in its current format for new accessions. I can see a much stingier form of Montgomery GI Bill coming back.
Seeing how people had to obliserv in order to transfer to their kin, I would imagine (maybe I should say hope) that if they changed it, it wouldn't be a "too bad for you" situation. Besides, I think it's harder to take away "Education Benefits" than it is "Retirement Benefits", when politicians are looking at being re-elected. I think "outsiders" see it as "something that makes you better and you have to continue to work for" instead of "something you get because you are still breathing", otherwise our spousal education benefits would have went like the dodo bird already (this is not implying they wont be
).
Concur. As I've said before, I really wonder if the decision makers have any clue what servicemembers really want, or if they have even an inkling of the morale situation.
As for the survey being biased, I have started responding to all surveys I'm given complaining about the BS/vague wording, etc. Here is a snip from the only response I've gotten so far, and I think it tells volumes about the real intent behind these surveys. "Part of the problem is that we have to word the questions in such a way to get IRB approval and please "sponsors" etc."
What everyone has to keep in mind when they read all these stories of DoD "proposals" is that DoD has about 20 different options that they're ultimately going to turn over to a special commission to study possible ways of implementing ANY change. None of the 20 methods is a DoD proposal and DoD isn't recommending any of them either. So, when you read a Navy Times article about "DoD proposing this or that," take it with a grain of salt.
BL: DoD has a mandate to get certain costs under control. It will probably involve some change to the retirement system and other means of compensation. Exactly how that will be implemented is unknowable for the time being. Whatever the special commission eventually recommends will then have to survive the congressional gauntlet.
BL: DoD has a mandate to get certain costs under control. It will probably involve some change to the retirement system and other means of compensation. Exactly how that will be implemented is unknowable for the time being. Whatever the special commission eventually recommends will then have to survive the congressional gauntlet.
