Military Compensation Commission report

[James48843]

In case anyone is interested, today the Military Compensation Committee is releasing it's formal recommendations for changes to the military retirement and benefits of future service members.

Here is the link. They just posted the final report, and the legislative recommendations, including terminating the military 20-year retirement, and replacing it with TSP matching funds.

I am reading the report now- haven't had a chance to go into detail yet.

Here is the link:

http://mldc.whs.mil/index.php/reports#final

 

[James48843]

Yep- here are the actual legislative proposals, which include:

1. Changing the retirement system to a TSP 5% matching, similar to federal employees.

2. reducing the retirement from 50% of retirement at 20 years, to a 40% at 20 years.

3. Reducing the MAX retirement from 75% of pay at 30 years, to 60% at 30 years.

4. A BUNCH of other cost saving measures, including cutting tuition assitantance for active duty people, to limit it to only those college courses directly related to their current military job specialty.


More:
http://mldc.whs.mil/public/docs/report/MCRMC-Legislative-Proposals-FINAL-LO.pdf

 

[rothnroll]

interesting.
Do you think that the proposed changes (I know they still have to be enacted) will apply to current military members?
I have over 20 in and would drop those papers before they enacted the 50/40 rule.

 

[jpcavin]

interesting.
Do you think that the proposed changes (I know they still have to be enacted) will apply to current military members?
I have over 20 in and would drop those papers before they enacted the 50/40 rule.

You'll probably be grandfathered.

 

[Cactus]

Here's another article about it. It says this only affects future members of the military, not those currently serving:

http://www.fedsmith.com/2015/01/29/proposal-expanding-tsp-and-fehb-to-wider-audience/

 

[Frixxxx]

Here's another article about it. It says this only affects future members of the military, not those currently serving:

http://www.fedsmith.com/2015/01/29/proposal-expanding-tsp-and-fehb-to-wider-audience/

Well, that's just dandy......I wish I could get 8 years of "back investments" for my time! Maybe they'll "refund" my buy in for my FERS annuity, since I wasn't offered any TSP in the '90s/

 

[James48843]

The report says they want to offer a deal to currently serving folks- but no one currently serving would be FORCED to go to the lower retirement.

It would be a package deal- if you want TSP matching funds and you are currently serving, you would have to agree to take the lower retirement.

Future enlistees would HAVE to do the TSP and matching funds, and would only get the lower retirement.

 

[James48843]

Sounds a lot like what they did with the CSRS crowd back in the 1980's-

They said "Take FERS instead of CSRS, and you'll get matching funds and make a lot more money".


You see how that worked out.....

 

[RealMoneyIssues]

Anyone remember the REDUX retirement they attempted in 1986? It was "repealed" sorta, you could opt for it but you weren't forced into it. It was a disaster and is still a blight on the military's retirement.
CSB/REDUX

This sounds like REDUX, part duex

We better be grandfathered...

 

[law87]

damn, what do you think guys? currently I'm 9 years in, currently an E6, got 11 more to do, that matching sounds pretty awesome.

 

[uscfanhawaii]

Sounds a lot like what they did with the CSRS crowd back in the 1980's-

They said "Take FERS instead of CSRS, and you'll get matching funds and make a lot more money".


You see how that worked out.....

Agree, it sounds like a similar deal. I was one of only a few nationwide that switched back then. But I don't have any real regrets...the matches (incl growth) is almost $300K now, with a few years left to go!

 

[OBGibby]

Yep- here are the actual legislative proposals, which include:

1. Changing the retirement system to a TSP 5% matching, similar to federal employees.

2. reducing the retirement from 50% of retirement at 20 years, to a 40% at 20 years.

3. Reducing the MAX retirement from 75% of pay at 30 years, to 60% at 30 years.

4. A BUNCH of other cost saving measures, including cutting tuition assitantance for active duty people, to limit it to only those college courses directly related to their current military job specialty.


More:
http://mldc.whs.mil/public/docs/report/MCRMC-Legislative-Proposals-FINAL-LO.pdf

Haven't read the report or delved into the finer details, but it sounds good to me.

 

[RealMoneyIssues]

Oh, and this would make an effective 5% pay cut to military pay...

 

[Maricar19]

My 2 cents worth...if I were given a choice when I was hired in 85, I would have chosen CSRS. Easy math, no 3 legged retirement, no worrying about how the market will be, or whether I will outlive my TSP or when to collect Social Security, etc.

If I were CSRS, I would be retired by now. I still would have contributed to TSP even without matching. TSP would have been the soy sauce on my adobo.

On a bigger scale, no regrets...others have no pension to look forward to other than Social Security..

 

[WorkFE]

This is good news for those who only spend 1 or 2 hitches.
For those who make the Military a career this is REDUX 2.0. A bit better than the original.

 

[nasa1974]

Yep- here are the actual legislative proposals, which include:

1. Changing the retirement system to a TSP 5% matching, similar to federal employees.

2. reducing the retirement from 50% of retirement at 20 years, to a 40% at 20 years.

3. Reducing the MAX retirement from 75% of pay at 30 years, to 60% at 30 years.

4. A BUNCH of other cost saving measures, including cutting tuition assitantance for active duty people, to limit it to only those college courses directly related to their current military job specialty.


More:
http://mldc.whs.mil/public/docs/report/MCRMC-Legislative-Proposals-FINAL-LO.pdf

The reduction is part due to the matching funds for the TSP account. If and it's a big IF you are able to maximize your TSP along with the matching funds you could be better off under the new retirement system. Notice I said could. Govexec.com has an article that talks about the panel recommendation. The article also states that only about 17% of the military actually get to 20 years.