{"id":60305,"date":"2015-06-11T08:00:40","date_gmt":"2015-06-11T12:00:40","guid":{"rendered":"http:\/\/valorguardians.com\/blog\/?p=60305"},"modified":"2015-06-10T15:35:59","modified_gmt":"2015-06-10T19:35:59","slug":"dod-weighs-in-on-new-retirement-system","status":"publish","type":"post","link":"https:\/\/www.azuse.cloud\/?p=60305","title":{"rendered":"DoD weighs in on new retirement system"},"content":{"rendered":"

Chock Block sends us a link to the Marine Corps Times<\/a> which reports that the Department of Defense has written a six-page report on what they want the new retirement system for members of the military to look like. <\/p>\n

The Pentagon is officially backing a “blended” system that would shrink the size of the current pension by about 20 percent yet supplement that benefit by offering government contributions to individual retirement investment accounts.<\/p>\n

The proposed system would provide for the first time a modest retirement benefit for the vast majority of service members who leave the military before reaching 20 years of service to qualify for the traditional pension.<\/p>\n

The Defense Department’s recommendations are mostly similar to the legislation that is gaining steam on Capitol Hill and comes at a time when lawmakers are hammering out the details of their annual defense policy bill.<\/p><\/blockquote>\n

The Defense Department and members of Congress are being disingenuous about this thing. The “modest retirement benefit” for folks leaving before twenty years, isn’t helpful at all. It’s only the Thrift Savings Program, you know, that 401k thing that would trigger a penalty from the IRS if the money was used before the age of 59 1\/2, along with any tax due on the amount withdrawn. In total, it would cost about half of the amount in the account. It’s only a real benefit if the service member leaves the money alone until they reach retirement age. Odds are that wouldn’t happen among enlisted members, especially if there’s no education process involved.<\/p>\n

The DoD should look at the current participation rate among service members in the TSP. I suspect that it’s pretty low. I know my own son didn’t understand it until I sat him down and explained it to him.<\/p>\n

On top of that, the government wants to wait to start matching contribution (5%) until after four years of service. That’s cheating service members out of four years of growth of that money which could be significant over time.<\/p>\n

The Pentagon recommends a new retirement system taking effect in January 2018 and giving current troops at that time two years to decide whether to opt into the new system and begin accruing money in a TSP or to exercise the grandfather clause and remain under the current system.<\/p><\/blockquote>\n

Yeah, that will be the real test – if they explain the system to the troops, instead of sell it to them.<\/p>\n

Either way, I hope the DoD is as prepared to deal with the hit they’re going to take to retention and enlistment and I hope they’re as excited about that as they are about saving money on the backs of the troops.<\/p>\n","protected":false},"excerpt":{"rendered":"

Chock Block sends us a link to the Marine Corps Times which reports that the Department … DoD weighs in on new retirement system<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[237],"tags":[],"class_list":["post-60305","post","type-post","status-publish","format-standard","hentry","category-big-pentagon"],"_links":{"self":[{"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=\/wp\/v2\/posts\/60305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60305"}],"version-history":[{"count":0,"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=\/wp\/v2\/posts\/60305\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.azuse.cloud\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}