House passes major Military Retirement overhaul

[James48843]

House Passes Major Bill Overhauling Military Retirement



The House on Friday passed a major bill that would allow non-career military service members to boost their retirement nest eggs.

The fiscal 2016 National Defense Authorization Act would automatically enroll new troops into the Thrift Savings Plan at 3 percent of their pay with a 1 percent government match, similar to the way it works now for federal civilian employees. Military members currently can contribute to the TSP, but are not enrolled automatically and do not receive a matching contribution from the government. Under the provision, the government match could go as high as 5 percent, if the service member contributed that amount.

More:
House Passes Major Bill Overhauling Military Retirement - Defense - GovExec.com


(So military will only get a 1% match on TSP, unlike civilian employees who get a 5% match. )

 

[alevin]

House Passes Major Bill Overhauling Military Retirement



The House on Friday passed a major bill that would allow non-career military service members to boost their retirement nest eggs.

The fiscal 2016 National Defense Authorization Act would automatically enroll new troops into the Thrift Savings Plan at 3 percent of their pay with a 1 percent government match, similar to the way it works now for federal civilian employees. Military members currently can contribute to the TSP, but are not enrolled automatically and do not receive a matching contribution from the government. Under the provision, the government match could go as high as 5 percent, if the service member contributed that amount.

More:
House Passes Major Bill Overhauling Military Retirement - Defense - GovExec.com


(So military will only get a 1% match on TSP, unlike civilian employees who get a 5% match. )

Civilians get 5% only if they put in 5% themselves. Your quote on the article says "the gov match could go as high as 5%, if the service member puts in that much" So the same potential match % as civilian. Civilian doesn't get 5% match unless they also put in 5% themselves voluntarily. Gov default contrib for civilians is 1% even if a civilian tsp'er isn't putting their own contributions in voluntarily.

Reading the fine print in the bill here, the main difference in this bill is that if the servicemember goes for a year without voluntarily contributing a portion of their pay, the gov will, the following year, start doing it for them, 3% of their pay with 1% gov match. If the service member doesn't like that the gov is making that decision for them, then they can voluntarily sign up and the gov will match whatever they voluntarily contribute, up to 5%. kinda like the civilian side, except nobody's forcing us to contribute if we don't want to. We get 1% from gov either way, just like the service member.

 

[Maricar19]

If I read it correctly, there will be reduction in their annuity calculation?
Is the matching TSP worth the reduction in the [FONT=Verdana, Arial, Tahoma, Calibri, Geneva, sans-serif]calculation for their annuity?[/FONT]

 

[FireWeatherMet]

If I read it correctly, there will be reduction in their annuity calculation?
Is the matching TSP worth the reduction in the calculation for their annuity?

Ahhh-hahhh.......that's the rub...if the House is going thru the trouble of changing gov't retirement, its definitely not for the better interest of the retiree.

 

[PessOptimist]

If I read it correctly, there will be reduction in their annuity calculation?
Is the matching TSP worth the reduction in the calculation for their annuity?

Ahhh-hahhh.......that's the rub...if the House is going thru the trouble of changing gov't retirement, its definitely not for the better interest of the retiree.

Maricar19 that is what the article in GovExec says while not saying how much. You would have to actually read the entire bill to find out what the reduction proposed is. Try Bill Text - 114th Congress - THOMAS (Library of Congress):: and enjoy. I think it might be somewhere in Subtitle C. Or not. I think it reduces the multiplier from 2.5% to 2%.

The idea behind this “modernization” is that right now if you don’t do 20 years or more service, you get no annuity. The article states that 83% of the people serving do not complete 20 years of service. Right now military TSP enrollees get no matching funds from the military. The idea as I see it is to give those who serve less than 20 years something more for their service.

FWM I think you may be wrong from the point of view of the “less than 20 year” veteran and possibly right from the point of view of the “lifer”. That 20 plus year veteran will have a reduced annuity but will have the opportunity to receive matching funds on contributions to their TSP. There is “grandfather” language in the bill.

I know nothing of all this as there was no TSP for active duty military in my time and no options beyond 20+ years gets 2.5% times years served as retirement pay.

PO

 

[Maricar19]

I am assuming that the matching will be based on military base pay, which is almost squat.
BAQs, hazardous pay, dependent's pay, etc. are what make military pay at par with civilian pay.

i guess, it's better than nothing.

 

[Maricar19]

From the TSP page, "...If you are a FERS employee and you were hired after July 31, 2010, your agency has automatically enrolled you in the TSP, and 3% of your basic pay is deducted from your paycheck each pay period and deposited in the traditional balance of your TSP account, unless you have made an election to change or stop your contributions..."

New employees are now automatically enrolled in the TSP with 3% deduction.

 

[alevin]

Yes.

 

[The_General]

UPRO price?
I_T, why is the price of UPRO this morning approx half of what it was yesterday?


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