Lack of matching funds for the military

[Griffin]

Reserve Retirement

Here's a link to calculate a reserve retirement. The key is points - you get 1 point for every day on active duty plus approximately 78 points a year for non-deployed years. You can use this as a ball park to compare this to an active duty retirement. A 20 year letter is still required in the reserve. The reserve components are not subject to the move up or move out issues that the active duty is, so it is possible to walk with 30 years or more if you want. Reserve retirements don't pay until age 60 though (all though there is a large political campaign to push this down to 55 - which would go a long way towards reducing the attrition rate).

https://www.hrc.army.mil/site/reserve/soldierservices/retirement/retirementcalc.asp

I'll take the opportunity to make a plug to all you active duty debating about leaving the military for good. Do yourself a favor and calculate a reserve retirement. 1 year active duty = 365 points....it may change your mind. I expect my reserve pension to about equal my full time FERS pension.

Also, 1 weekend = 4 days pay, (it's my mad money and it keeps me sane).

Oh, by the way, If you had any doubts, we need you.

 

[James]

Here's a link to calculate a reserve retirement.

The selectable birthyear stops at 1973 and has no years more recent.

 

[Greg]

In Effort to Recruit, Military to Begin Offering Matching Contributions to TSP Participants

By Stephen Barr
Wednesday, January 11, 2006; B02

Three years ago, Congress opened the Thrift Savings Plan, the 401(k)-type retirement program for civil service and postal employees, to the military.

Military participation in the TSP has grown slowly but steadily since. As of October, more than 480,000 active-duty and military reserve personnel were investing a portion of their pay, including some types of bonuses, in the TSP.

But military personnel, unlike many of their civil service colleagues, have not received matching contributions from their employer, the Defense Department, limiting the benefits of their before-tax savings and tax-deferred earnings on contributions.

Although the original rules permitted matching contributions for military personnel holding critical skills, the Pentagon has generally viewed bonuses as more popular among the troops as a recruitment and retention incentive, according to congressional aides.

Congress, in an effort to provide more flexibility in this area, recently gave a green light to the military services to use matching contributions as a perk that can be offered first-time recruits who agree to serve longer than two years.

Congress also directed the Army to set up a pilot program to study whether TSP matching contributions give a boost to recruiting efforts. The pilot program also will try to steer soldiers, during their initial enlistment, toward "habits of financial responsibility," according to the fiscal 2006 defense bill that authorized the pilot.

The department will report back to the House and Senate Armed Services committees in February 2007 and provide data on the number of participants in the pilot program and the level of contributions they made.

The report will include the views of officers, senior enlisted personnel and field recruiters on whether matching contributions enhanced recruiting, according to the legislation.

A recent survey of government workers, conducted by the Office of Personnel Management, showed that the TSP is one of the most popular benefits provided through federal employment.

In the armed forces, the Navy has the highest participation rate, with nearly 44 percent of active-duty personnel enrolled, according to the October snapshot. In another sign of the military's interest in the TSP, officials noted last year that there are more members of the uniformed services participating in the TSP than employees covered by the old Civil Service Retirement System.

TSP participants covered by the retirement system do not receive matching contributions from their agencies, in part because they receive a more generous pension than federal workers and retirees covered by the Federal Employees Retirement System.

Civil service employees hired after 1983 are covered by FERS and, according to a recent OPM report, will rely on the TSP for a significant, and perhaps the largest, portion of their retirement benefits.

More than 1.5 million FERS-covered employees receive matching contributions from their agencies. For the FERS participants, agencies match the first 5 percent of pay that employees contribute each pay period. The match is dollar for dollar for the first 3 percent of pay and 50 cents on the dollar for the next 2 percent of pay.

© 2006 The Washington Post Company

 

[ChuckBecker]

I was active duty USN 1971-77. Got out, walked away, no reserve, no nothing and went civil service mariner. I'm on the "old" plan, CSRS. We don't get matching funds either.

The logic is simple. Have your cake or eat it, but not both. I have a defined benefit plan, just like military. So I don't get matching funds. Newer civil service employees get FERS, a hybrid defined benefit/contribution system. They get 1% per year of service (vs my 2% and military 2.5%), but they get matching funds. And they don't get a 20 year retirement, minimum age for them is something like 55yrs 8mos. And goes up the younger they are, so a teenager starting civil service under FERS today is going to have to work 'till he/she is like 68 years old.

Hummm, Hummmm, have your cake ... or eat it.

 

[James]

Those service members who don't stay in for 20 years (most don't) get no cake to begin with. They don't even get a cookie.