I was talking to some junior NCOs last week about their take on the new retirement system... each one said, without exception, that without a pension, there's no reason to stay in... pay and benefits for contractors are muy bueno.

Get trained in the military, bail for the private sector, get paid.

It's so bad, all around, that it almost makes you wonder if it's intentional.

 

Shack.



Of course it is, the DOD already can't afford the impending retirement bubble they already owe. Plus by turning over people more often you keep the average age/rank/longevity down... thus reducing your average pay per person. This is obviously incredibly short sighted for reasons we all understand, and will likely blow up in their faces.

 

Did these NCOs not read about the system? You get matching funds, plus if you make it to 20 you get 2x number of years served avg high 3 pay.


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The only thing that makes it an attractive option to outsiders is the dream of flying pointy-nosed aircraft past 1.0 mach. For insiders, or FGO's to be more specific, it usually takes a major recession and/or a war to persuade them to stay in when the airline industry is in the pooper. Unfortunately for the military, most airlines have raised their first year payscales 100-150% over the last 10 years, which makes the transition for us a lot more attractive.

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In what universe is a retirement contribution you have to fund from your own paycheck beat an A fund? Thats some common core math right there.

Im a 10 year o4 who falls under the middle group who can choose to convert or remain, and i will unequivocably be opting to remain under the old system. That .5 multiplier difference becomes a 10% pension payable immediately. Thats money saved from my own check i can use for a higher lifestyle in working age. Its beyond insulting they even made my year group eligible for that garbage in the first place, as i wouldnt even have the maturity date to take advantage of the supoosed compound interest.

It would be one thing if we were talking about an airline A fund. THAT promise is not worth the paper is written on. But we re talking about a DOD A fund. I can come up with plenty yellow ribbons and political ads to justify that payment until my death. To each their own.

To be clear, the B fund portion of this hybrid system is only 1%, the rest is mickey mouse 401k. You know what 1% of e5 money is? Happy meal money once a year.

The real truth here is that the Dod is not saving that much money on a 10% A fund shave. They did this to give math illiterate one termers the illusion that theres a real retirement benefit to not making it to 20, while preserving the kind of regional airline style occupational turnover the military is institutionally known for. They dont want early millennials like me who can count with their fingers and figure out our daddys retirement was in fact better, and im gonna get mine too. In the words of good fellas: Eff you pay me. Boomers are not gonna bend me over twice in life i can assure you of that. If i was a post 2018 new entrant (when the hybrid becomes the only option) no way in hell i stay for a full 20, the airline b fund is way ahead at that point.

To repeat myself: IF IT COMES OUT OF MY PAYCHECK, IT'S NOT A BENEFIT, YO.

 

It doesn't "old fart". Yeah you contribute 5% and the DOD will match that 5%. Still leaves you with 5% in your pocket that you would not otherwise get if you don't make it to 20.

And guess what, nobody is guaranteed 20. So I'm gonna take my 5% and shut up now.

"A bird in the hand is worth two in the bush"


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As a member, I am embarrassed that the General is going to go to the airlines for answers. How about you listen to your people! This is exactly why there is a retention problem.

More so, they created the retention problem. Circa 2006 we saw two rounds of voluntary separations which paid $100k to Captains and Majors to leave. Before that we saw involuntary separations for LTs and Junior captains. Guess what rank those people would be today and who would be eligible for pay bonuses?

If I were active duty I'd be worried sick about a potential stop loss. We've seen stop losses announced for smaller issues.

I'm so glad I dropped retirement paperwork. See ya chair force.

 

Did someone say stop loss?

Stop-Loss an Option for Air Force to Keep Departing Pilots

 

If they really did this , how long can they really stop loss people? Seems it would just be another nail in the coffin in the long run

 

You beat me to it. I was just going to post this. They have to realize that just the threat of a future stop loss will accelerate departures short term. I know it made me retire immediately back in the late 90s instead of taking the 6 month extension I had already been approved for. Anyone sitting on the fence right now is almost sure to punch now.