Plan to cut retirement outrages service members - Military Retirement - Navy Times

Plan to cut retirement outrages service members

Like thousands of other troops, Air Force 1st Lt. Daniel Worden said he was stunned and offended by a recent proposal to overhaul the military retirement system in a way that would directly and deeply affect today’s troops.

“The nation has been at war for almost a decade and the average citizen has not been asked to sacrifice anything. Taxes haven’t been raised. Food hasn’t been rationed. Nobody has been drafted. The only ones who have sacrificed over the last decade of war have been the military and their families,” Worden, who is deployed in Baghdad, told Military Times.

The proposal unveiled by the Defense Business Board, a Pentagon advisory group, aims to save more than $300 billion over 10 years by transforming the traditional 20-year pension into a corporate-style 401(k) savings account. Under that plan, the military would contribute cash to individual troops’ accounts, possibly about 16 percent of basic pay per year.

The plan would dramatically shift money from the roughly 19 percent of the force that serves 20 years or more to earn an immediate lifetime pension and give much of it to the 81 percent of mostly enlisted troops who leave after four, six or eight years with no retirement benefits. Critics said the plan would devastate retention and jeopardize the quality of the nation’s all-volunteer force.

“Congress put these conflicts on the credit card and now that we are finally winding them down, the plan to pay for them is to cut the benefits of the only people who sacrificed in the first place? Really?” Worden said. “Of all the places the government can cut spending, they are going to come after military benefits — after 10 years of war?

“This proposal is a total affront to the men and women of today’s armed forces,” said Worden, a Michigan native who left his wife and three children behind at Grand Forks Air Force Base, N.D., while on his second deployment in the Middle East.

Opposition rising

The proposal would require approval from Congress, and the groundswell of opposition rising in recent weeks makes that seem increasingly unlikely. However, military retirement is widely expected to get swept up in the budget battles in Washington this fall, so major changes to the force’s most fundamental benefit are on the table.

Perhaps the most controversial part of the plan would be its impact on today’s troops, who would be partially grandfathered and on track to earn a hybrid of old and new benefits. That would reduce the value of their lifetime pension payments, along with the incentive to stay for 20 years.

Anxiety about the proposal has spread across the force, to the extent that Defense Secretary Leon Panetta recently tried to reassure troops that the nation’s leaders won’t “break faith” with them, and any changes to retirement benefits would affect only future recruits.

But the real decisions will be made on Capitol Hill.

The DBB’s plan is the latest — and most far-reaching — military retirement reform proposal floated in Washington lately, and insiders say lawmakers seeking re-election have virtually no interest in alienating the military community.

“It’s dead on arrival, it’s a nonstarter,” said one Capitol Hill staffer of the DBB plan. But the staffer, who spoke to Military Times on condition of anonymity, said other potentially significant changes to military retirement are a very real possibility.

All eyes are on the so-called “super committee” appointed in August to hammer out a historic budget-cutting agreement this fall. The group of 12 lawmakers is expected to present a sweeping new plan that may include further defense spending cuts and fundamental changes to Social Security and Medicare.

And many expect military retirement to be thrown into the mix. “There is going to be immense pressure on the panel to have a solution that will include retirement reform in the military,” the Hill staffer said.

Military advocacy groups are mobilizing to influence that debate. The Military Coalition, an umbrella group of more than 30 military associations, plans to update members and discuss the retirement proposal at its upcoming September meeting.

“We’re monitoring this very closely,” said Joseph Barnes, the Fleet Reserve Association’s national executive director, co-chairman of the Military Coalition and a retired master chief. “There is increasing anxiety about this and other plans for pay, health care and benefits.”

Other proposals to reform military retirement include one from last year’s debt reduction committee that would force all troops to wait until age 57 before drawing retirement checks.

‘Blood, guts and dead bodies’

Many troops echoed Army Spc. James Abada-O’Malley, 33, who rejected any comparison between military service and civilian careers as a basis for moving the military to corporate-style 401(k) accounts for retirement purposes.

He said spending more than three of the past seven years deployed has contributed to his pending divorce.

“I’ve seen blood, guts and dead bodies. I’ve said goodbye to comrades and rolled out the wire the same day. It has not been an easy seven years and I wouldn’t expect the next 13 to be easy either,” Abada-O’Malley said.

For those kinds of sacrifices, troops deserve a unique retirement package, he said.

“I knew that I would face a tough and intense 20-plus years — but there was a reward at the end from a nation grateful for my sacrifices,” he said.

Just discussing the plan underscores the shifting culture at the Pentagon, said Air Force Tech. Sgt. Eric Jenkins. “It shows how the Defense Department is … becoming a corporation [more] than an institution to protect the United States and guarantee its freedoms,” Jenkins said.

Added Lt. Greg Sharp, a Navy pilot: “This violation of trust by our nation’s leaders is appalling.”

Many troops worry about the reliability of the corporate-style benefits called for in this plan.

“Tying military retirement to a 401(k)-type plan/stock market is ludicrous,” said Army Sgt. 1st Class Joseph Brauchle. “Many retirees are having to return to work in their 60s and 70s because of the devaluation of their retirement accounts.”

But despite visceral opposition from many troops, the idea of giving some retirement benefits to young troops who leave before 20 years was appealing to others.

“I think it’s a good idea,” said Army Sgt. Henry Lanius, who said he has no plans to leave the Army any time soon but does not expect to stay for 20 years.

“It’s a good way, honestly, to save money in the long run. … Basically it puts your retirement in your own hands,” said Lanius, who has been in for five years and has deployed to Afghanistan.

Ripple effects

Critics of the plan said it will create major retention problems as troops find less motivation to stay in uniform for 20 years. That’s one of many ripple effects the Pentagon could face if any massive change to the retirement program becomes law.

“We need to understand the outliers, the third- and fourth-order effects,” said Mike McCalip, a retired fleet master chief.

For example, suspending access to retirement money until age 57 or older will force all troops — and the services’ leadership — to be far more focused on potential second careers for those who serve, McCalip said.

That may mean more focus on the services offering professional training, development and licensing credentials to help ease their ultimate transition into the private sector, he said.

“How do you take someone who is going to step up and serve for 20 years and give their family some comfort that they are not going to end up a statistic of veterans’ unemployment?” he said.

The situation may have troops tracking the political wrangling in Washington more closely than ever over the next few months.

“It’s still the fear of the unknown,” said retired Air Force Col. Mike Hayden, the Military Officers Association of America’s deputy director for government relations. “The super committee still has a lot of work ahead … and we have no idea of just how far they will go.”

A Marine staff sergeant who is in the Corps’ Enlisted Commissioning Program said the DBB proposal would have catastrophic effects on morale.

The Marine, who asked that his name not be used, said that if defense cuts must be made, they “should come at the expense of exorbitant acquisition projects, not pay or retirement. I would advocate raising taxes or tweaking retirement health care premiums prior to taking this last resort.

“Or how about this: End the wars.”

Staff writers Cid Standifer, Michelle Tan and Andrew deGrandpré contributed to this story.