How is this even relevant? Is Ireland responsible for maintaining global security and their soldiers facing repeated deployments? If the servicemembers in these nations are not asked to do the same amount work, deployments, strain on the body, etc. of a US servicemember this is a irrelevant comparison. The country that comes the closest to the US military that she points out is the UK military which we will discuss later.
Notice how these civilian writers looking to cut military retirement always throw in the phrase that servicemembers can retire as early as 37. They make it sound like all these 37 year olds are chilling at the beach with scantily clad waitresses/waiters serving them mai tais. What they never mention is how much a military retiree is making. The vast majority of retirees are in the E6 – E7 range. An E6 at 20 years is making $3,724 a month before taxes and other deductions. Yes military pay has deductions for things such health care and family dental plans. So people retiring at these ranks at 20 years are not the millionaires getting ready to chill out on the beach that Tergesen is alluding her readers to believe. In fact using the military retirement calculator an E6 retiring in 2015 at 20 years of service with a high 3 would make $1,640 after taxes. Yes retirement pay is taxed and also this number does not include deductions for health care. Yes health care is not free for military retirees unlike what most people think. For those that retire higher in rank they will have a larger monthly benefit. Due to the up and out system few people are able to stay in long enough and achieve the higher ranks where the military retirement is quite good. Most people retire with enough extra money coming in every month to pay the mortgage while they find a job to make money to live on. So military retirees are not all out on the beach at age 37 getting back rubs and drinking mai tais.
Note that when you hear the word modernize that is a code word for cuts not beneficial to servicemembers.
Turner and Klein’s report is full of detail about how the U.S. compares to many of its NATO allies. On average, the report says, “the eligibility age for U.S. military pensions is lower by 15 years compared with the United Kingdom, and by 20 years compared with some other NATO countries.” Moreover, it adds, the eligibility age has not been changed in nearly 70 years — a period during which life expectancy has increased dramatically.
Once again other countries military retirement is irrelevant unless they are asked to conduct the same workload as the US military under the same conditions. For example the Dutch military has their own labor union. Could you imagine if the US military had a union and could go on strike? As far as the UK military Tergesen just flat out lies. The UK military which is the closest to the US military in regards to the demands of the force receives retirement benefits at age 40 if you have served at least 18 years. So if you someone joins at age 18 they have to serve 22 years which is two years higher compared to the US military. However, if someone joined the UK military at age 22 they would only have to serve 18 years to receive a pension which is 2 years less than what is required for US military retirement. Heck the UK military get not just one lump sum payment, but two as part of their retirement! It is funny how Tergesen doesn’t mention that. It isn’t like it is hard to find, the UK military’s pension system is just posted on the homepage of their website:
Every month, the Army pays into a pension fund on your behalf. And when you retire, you will receive a monthly payment based on your final salary.
- When you join the Armed Forces, you will automatically be enrolled into the scheme – and you won’t be asked to pay a penny
- After two years of Regular service you’ll have earned an Army pension that will be paid when you get to the age of 65
- Anybody aged over 40 who has served for at least 18 years gets the right to claim an immediate pension linked to their final salary, a tax-free lump sum on leaving the Army and a second lump sum when they turn 65
- The pension scheme will change on 1 April 2015 and from this date Reserve Forces will also be automatically enrolled
So this an obvious lie or she is utterly incompetent. Either way not good for Tergesen.
The upshot? “With current life expectancies, U.S. military personnel on average can expect to receive a pension for more than twice as many years as they served in the military.” In 2012, the U.S. spent $52.9 billion on military retirement benefits, versus $57.5 billion on pay for active military personnel, Turner and Klein say. The unfunded liability for military pensions: $934 billion in 2012.
I always looked at military retirement as the half the pay the military owes me from my service. Glad to see the numbers actually validate that belief. Next Tergesen was not happy mentioning this phrase once, but she had to include it twice in the same article:
According to current rules, enlisted men and women who join the military at the youngest age possible, 17, can begin collecting benefits as young as 37. For officers, who are required to have a college degree, the earliest age to collect benefits is typically 41 or 42, the report notes.
Then she throws this line in the article with no analysis explaining why this is the way it is:
The longer you serve, the more generous the benefit: Someone who serves for 40 years will receive 100% of final pay.
So few people serve 40 years that this fact is pretty much irrelevant. Those that do serve 40 years are usually four-star generals who would be the equivalent of a CEO of a Fortune 500 company, but makes no where near the same amount of money. The retirement they are given is seen as a way to retain them in service so they do not go seeking opportunities with those same Fortune 500 companies.
In contrast, other nations have reduced the costs of their military pensions. In recent years, the U.K. has raised its eligibility age for a military pension to 55; Poland has raised its age to 55, Ireland to 50, Portugal to 60, and Sweden to 61. In contrast, the U.S. last changed its age of military pension eligibility in 1947.
She can’t seem to get enough about passing off lies about the UK military. Let me explain what her claim really means; the UK has an option where a servicemember can serve to and retire at age 55 to receive a larger pension. A servicemember can still leave service before age 55 and if the servicemember has over 18 years of service they get a lower fixed pension that begins immediately with not one, but two lump sum bonuses. Once again you can read the different retirement options on this British military website. If anything it is arguable that the British military’s retirement is even better than the US military’s retirement system.
Unbelievably Tergesen goes on to not once, not twice, but now three times bring up this same talking point!:
Rules “that permit collection of pension benefits for people in their late 30s and early 40s need to change,” Turner and Klein argue.
Here is more lies pushed by Tergesen:
Such a recommendation would impact officers far more than enlisted men and women. The reason: Fewer than 17% of enlisted personnel meet the 20-year vesting requirement to receive a pension. But among officers, 49% collect a pension. Overall, more than 60% of those who are eligible for benefits take them at the earliest possible time. As a result, the average age for first drawing benefits is 42, Turner and Klein report.
Here is what the military compensation commission said about the number of servicemembers who retire:
Commissioners said about 75 percent of troops could get some retirement pay under the proposal. Currently 83 percent of servicemembers separate before the 20-year threshold without any pension. [Stars & Stripes]
That means 17% of servicemembers overall reach the 20 year retirement age. I have no idea where she got the 49% of officers number from. Any officer who reaches 20 years can look back and see that no where near half their officer basic class is remaining. Just the up and out system ensures this happens much less the people who leave on their own or get removed from service for various reasons. Less than 20% is far more accurate. So where did Tergesen get this number from? Thin air?
The Military Compensation and Retirement Modernization Commission did make one significant recommendation governing retirement benefits. Its proposal: To automatically enroll military personnel in the federal Thrift Savings Plan, a 401(k)-like retirement plan—and have Uncle Sam kick in up to 6% of pay annually as an employer contribution. In a 401(k)-style plan, military personnel could build up some retirement savings even if they served less than 20 years, as many do.
In return, the government would reduce some of the benefits in the defined benefit pension plan.
So Tergesen’s answer is turn over military retirement to Wall Street. I recommend everyone watch this PBS Frontline report on how well the 401k system is working. Military retirees will not benefit from this plan, but Wall Street will if the system turns into a 401k. So is Tergesen basically a propagandist for the Wall Street firms that would get their hands on the huge amount of military retirement money? Considering the lies in this article this is arguable. Either that or she is just incompetent and jealous of military retirees because her own 401k plan sucks so bad. I’ll let readers choose which one it is.
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