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Hagel alludes to pay increase cuts, retirement/Tricare changes

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http://www.military.com/daily-news/2013/11/05/hagel-says-cuts-to-pay-and-benefits-are-needed.html

Defense Secretary Chuck Hagel warned Tuesday that troops and their families will be asked to sacrifice on pay and benefits to preserve readiness in an era of tighter budgets.

Hagel listed politically-charged changes to compensation and personnel policy as one of his top six priorities in reforming the military following the wars in Iraq and Afghanistan as the department gears up to meet new challenges.

"This may be the most difficult" to achieve among his six priorities, Hagel said of proposals to trim pay increases, overhaul TRICARE and review retirement benefits while adapting to cuts in personnel.

...anyone have any info beyond these vague comments?

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The DoD doesn't even know where to start. Even something as simple as flat-lining pay increases for a year gets stomped by Congress. Restructuring TRICARE or our antiquated retirement system is needed, yet will be very difficult to achieve.

I found this to be a good summary: http://news.usni.org/2013/07/10/opinion-military-pay-and-benefits-unsustainable

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I've got some ideas that cost us nothing in benefits and readiness.

1. Stop forcing commanders to spend the entire budget every year. The DoD claims they want us to save money, but then they reward the opposite behavior. If you really want us to save money, give us some sort of incentive (as simple as "you can keep any money you don't use this year").

2. Some for the flying hour program. Untie base budgets from the flying hour program, then stop stigmatizing units that sell back flight hours. Even better, make the window for selling back flight hours larger so that units desperate for the hours can take them from units that are triple-turning their crews every day to burn through them. For example, the B-1 FTU usually has 8-12 students at any given time...that means we can fly every student with 4-6 lines a day. Yet we schedule 8 lines many days. Instructors need three flights a month to make RAP, they're flying 10+ times a month, and still expected to execute all their ground duties. We can probably afford to give some of those lines to another unit.

3. Stop deploying so many people. I think everyone who has been there can agree that there are far more people than required present at the Deid, and I'd hazard a guess the same is true of Dafra and Ali. Do I really need a 100+ person strong services squadron in a location where most of the services are provided by TCNs?

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DOD asked for 1% pay raise next year. Obama said 1%. Congress wants to continue at 1.8%.

As for the rest, the Military Compensation and Retirement Modernization Commission will take public comments again in a few months. See Obama's instructions to the commission here: http://assets.fiercemarkets.net/public/sites/govit/militarycompensation.pdf

Remember...all changes have to make it through Congress...who has a 60+ year track record of mostly not fucking with retirement/pay/benefits.

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DOD asked for 1% pay raise next year. Obama said 1%. Congress wants to continue at 1.8%.

As for the rest, the Military Compensation and Retirement Modernization Commission will take public comments again in a few months. See Obama's instructions to the commission here: http://assets.fiercemarkets.net/public/sites/govit/militarycompensation.pdf

Remember...all changes have to make it through Congress...who has a 60+ year track record of mostly not ######ing with retirement/pay/benefits.

This is absolutely true...

But...what concerns me is in a bout 5-15 years the current "popularity" of the common soldier is going to wane and we will get a new generation in congress that mostly forgets or ignores the sacrifices that most of us have made during the last decade. Then military pay, retirement and benefits will be an easy target vs. vote getting entitlements.

I would really like to see them start to reform the retirement and health care systems now before it truly is crunch time. I would bet that most people in the military who know enough to care would much rather have a better and cheaper 401k type retirement plan from their date of initial entry. I've got less than five years left at this point and they paycheck for life sounds great but I dont know if its sustainable. I would rather walk when I'm ready with MY money than a have lifetime guarantee from the gov't .

Edited by Catbox

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This is absolutely true...

But...what concerns me is in a bout 5-15 years the current "popularity" of the common soldier is going to wane and we will get a new generation in congress that mostly forgets or ignores the sacrifices that most of us have made during the last decade. Then military pay, retirement and benefits will be an easy target vs. vote getting entitlements.

I would really like to see them start to reform the retirement and health care systems now before it truly is crunch time. I would bet that most people in the military who know enough to care would much rather have a better and cheaper 401k type retirement plan from their date of initial entry. I've got less than five years left at this point and they paycheck for life sounds great but I dont know if its sustainable. I would rather walk when I'm ready with MY money than a have lifetime guarantee from the gov't .

Speak for yourself. I want the govt promise thank you very much. If I wanted a diluted retirement that I can't self fund after cost of living, I'd work for the airlines with a lot less bullshit.

Look, I know what you're saying. You want partial vesting because the proposition of staying to 20 is as secure as a baby fart during tornado season. But anybody who thinks you can get a 50 pct retirement in 30 years by doing a hands off contribution to some Miley mouse 401k on what they pay you these days is smoking glue. They'll never pay me wages to account for self funding, so fuck that concession. Now, you give me a B fund where the employer is te one who makes the contributions as a percentage of my pay grade, then hell yeah knock yourself out. But you're not touching my paycheck, otherwise that's a huge paycut and fuck I can do that at Olive Garden all by myself.

Besides. The proposition of recouping my active duty points on the civil service is not beneath me. I'd lick stamps with a smile at the post office for 5 years and get the whole god damn thing back. Never mind I can double dip at 60 on the reserve side. Where there's a will there's a way. Fuck 401ks

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FERS for law enforcement and Congress is 1.7% up to 20 years and 1% thereafter. That nets you 44% of your Top-3 at a 30 year retirement and 34% at 20.

Sounds worse (it is), but you also vest at 5 years and they match TSP up to 5%* during your entire career. That deal would work out far better for the 80% of veterans who will never retire and would IMHO still be enough to get you the high quality career officers the military needs. It's still a pension which good luck finding that in the private sector these days.

* - the calculation is a little more complicated, but if you contribute 5%, the gov matches 5%. Uncle Sam kicks in 1% regardless of what you do, so if you're worried about them "touching your paycheck" you still get something you're not getting right now.

Edited by nsplayr

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This is absolutely true...

But...what concerns me is in a bout 5-15 years the current "popularity" of the common soldier is going to wane and we will get a new generation in congress that mostly forgets or ignores the sacrifices that most of us have made during the last decade. Then military pay, retirement and benefits will be an easy target vs. vote getting entitlements.

This is why as veterans we need to be active in all the organizations such as the American Legion, VFW, etc. Noticing our generation is just getting into politics and running for Congress, need to start having vets up there instead of community organizers.

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I've got some ideas that cost us nothing in benefits and readiness.

1. Stop forcing commanders to spend the entire budget every year. The DoD claims they want us to save money, but then they reward the opposite behavior. If you really want us to save money, give us some sort of incentive (as simple as "you can keep any money you don't use this year").

2. Some for the flying hour program. Untie base budgets from the flying hour program, then stop stigmatizing units that sell back flight hours. Even better, make the window for selling back flight hours larger so that units desperate for the hours can take them from units that are triple-turning their crews every day to burn through them. For example, the B-1 FTU usually has 8-12 students at any given time...that means we can fly every student with 4-6 lines a day. Yet we schedule 8 lines many days. Instructors need three flights a month to make RAP, they're flying 10+ times a month, and still expected to execute all their ground duties. We can probably afford to give some of those lines to another unit.

3. Stop deploying so many people. I think everyone who has been there can agree that there are far more people than required present at the Deid, and I'd hazard a guess the same is true of Dafra and Ali. Do I really need a 100+ person strong services squadron in a location where most of the services are provided by TCNs?

1. You don't even need that incentive; just take away the threat that if you don't spend it this year you won't get it next year. "So your X budget was $100K this year and you have $30K left? Cool, here is $70K... you did a great job saving the taxpayer $30K!"

2. The flying hour program "zero out" policy is the epitome of inefficiency, but the fact that Liquid seemed surprised that this is even happening leads me to believe this won't be changing anytime soon.

3. Bite your tongue... for every TCN working at the Deid we obviously need 3 TCN escorts!!! Next thing you'll be saying we should create an organization that can control worldwide Tanker and Airlift assets from a centralized CONUS location at... I don't know, maybe Air Mobility Command headquarters!!! That would save hundreds of people from deploying to the CAOC every year, but is obviously pipe dream crazy talk to think we could ever have an organization like that!!!

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Looking to drop benefits for miitary retirees is nothing new. I think Hagel is just taking up the task desired by his boss who would rather you just share the pain of Obamacare.

https://www.ijreview.com/2012/06/9466-mugging-soldiers/

There have been something like 40 attempted reforms of military retirement...from 1949 to present. Only the change from Final Pay to High-36 took effect. Even REDUX was repealed before the first people retired under it.

I'm not saying it won't change in the future...as we drastically need some sort of change to the system...unless the DOD budget is allowed to grow with inflation.

As it stands, the 2013 Commission is charged with reforming pay and benefits...and is required by POTUS to grandfather existing military members.

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1. You don't even need that incentive; just take away the threat that if you don't spend it this year you won't get it next year. "So your X budget was $100K this year and you have $30K left? Cool, here is $70K... you did a great job saving the taxpayer $30K!"

2. The flying hour program "zero out" policy is the epitome of inefficiency, but the fact that Liquid seemed surprised that this is even happening leads me to believe this won't be changing anytime soon.

3. Bite your tongue... for every TCN working at the Deid we obviously need 3 TCN escorts!!! Next thing you'll be saying we should create an organization that can control worldwide Tanker and Airlift assets from a centralized CONUS location at... I don't know, maybe Air Mobility Command headquarters!!! That would save hundreds of people from deploying to the CAOC every year, but is obviously pipe dream crazy talk to think we could ever have an organization like that!!!

All great thoughts... we should decidedly work to find (not so hard to hide) efficiencies in the current year operations budget.

Benefits, pay, and retirement still need a hard look, however... as some of those things will turn into must-pays for future years. I don't remember the numbers precisely, but we have something like a 3% troop strength increase from 1995, but personnel budget has ballooned by 50%. I think most of that is in health care costs (hence the call for increased TRICARE payments), but some is in pay as well. So should we trim the operations budget to make the personnel side be ever larger?

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Well, that won't hurt retention at all. Take away the 20 year retirement and there goes the last of your experience between years 11-19.

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I'm not a finance expert at all, but happened to have previously worked for the Deputy of DoD Agency in which the Director sat on the Military Retirement Fund's board, and I'd see firsthand the minutes of the meetings before they went to my boss. From what I remember, the military retirement fund was actually in very good shape and there were no problems with it at all. I was always impressed that it was managed so well. So, when I saw what this USN O-4 wrote, I had to do some searching. I happened to see the 2012 USD (Comptroller) report on the Military Retirment Fund. While there is a part of it that's considered an unfunded liability, it's actually been accounted for and there is an amortization to see how it's going to be paid down. Also, the amount he's quoting (from the Defense Business Board) and what's in the 2012 MRF Report are signifcantly different. Overall the fund is in good shape and expects to meet all of its obligations over the next 20 years, so I'm not sure where the Defense Business Board got it's numbers from (assuming the LCDR quoted them correctly).

Read it for yourself here: http://comptroller.defense.gov/cfs/fy2012/13_Military_Retirement_Fund/Fiscal_Year_2012_Military_Retirement_Fund_Financial_Statements_and_Notes.pdf

I agree that there's certainly a need for revision, particularly with TRICARE/healthcare. However, it seems to me that the author is using skewed data to bolster his argument, and considering he references the Center for American Progress, there's even more reason to question the data and argument he makes.

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Well, that won't hurt retention at all. Take away the 20 year retirement and there goes the last of your experience between years 11-19.

The counter to that, we add in a healthy bonus to keep those we need, while allowing those we don't need to leave with a vested 401K.

So, essentially, we use market forces to retain key skills. Crazy.

Edited by Dupe

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The counter to that, we add in a healthy bonus to keep those we need, while allowing those we don't need to leave with a vested 401K.

So, essentially, we use market forces to retain key skills. Crazy.

401K is all well and good for those that are relatively new to the AF (<4 years), what are you going to do with the O-4/5 with two to three years left till the check for life club and now you want to make it a 401K? Compounding interest doesn't work overnight (or over 2-3 years).

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You'd obviously have to grandfather people in. Maybe even allow people currently serving to elect which plan to take. Had I been offered a matching 401K type thing when I joined, I would have taken that over the 20 year option because that would have given me options. With that possibility, if I decide to leave at 15 years, I have more than a logbook and resume to show for it. The plus side to Uncle Sam is that all payments would be in today's money, not with unknown inflation and without committing to future payments. The downside is that I think it would be a lot tougher to retain the rated force. I haven't seen any numbers, but most of the pilots I know who have gotten out get out right at the commitment. Most who stay even a few years past see the light at the end of the retirement tunnel and stay to 20. Take away that light and you take away a major reason to stick it out even when it isn't fun anymore.

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As well as those mentioned above:

Shutter the following:

Thunderbirds

Blue Angles

Service Bands

...shit, all demo teams. If you do not contribute directly to day-to-day operations, you're gone.

Quit forcing people to PCS every 10 minutes.

Dismantle the Reserves and create a larger Air Guard force. They have a more expansive mission (state).

Give all helo's to the Army. They are better at operating them.

Contract nearly all services (pay, lodging, personnel, ect). If your job typically involves you NOT deploying, let a contractor do it.

Quit changing uniforms every other year. Shit is getting old.

No more leather couches when members are required to pay for thier own boots. (yeah, it happened)

Spin ups do not require you to buy 150K worth of shit you will never use. If you cannot walk of the door with what you have, you're doing it wrong.

Do not retire the A-10, but get rid of the F-22. Scale back the F-35 buy.

Bring back warrants in the AF and let them fly.

Close the AF academy. Let them track from West Point like in the olden days.

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FERS for law enforcement and Congress is 1.7% up to 20 years and 1% thereafter. That nets you 44% of your Top-3 at a 30 year retirement and 34% at 20.

Sounds worse (it is), but you also vest at 5 years and they match TSP up to 5%* during your entire career. That deal would work out far better for the 80% of veterans who will never retire and would IMHO still be enough to get you the high quality career officers the military needs. It's still a pension which good luck finding that in the private sector these days.

* - the calculation is a little more complicated, but if you contribute 5%, the gov matches 5%. Uncle Sam kicks in 1% regardless of what you do, so if you're worried about them "touching your paycheck" you still get something you're not getting right now.

Posted this exact plan 2 years ago

Great plan that uses an existing structure that is acceptable. Gives the beneficiary both the pension and the 401k. The other workable part of this is the Tricare for life issue. Considerable cost to the government that can probably be remedied by a modified TAMP program of 3 years benefit, followed by subsidized access to a Tricare Reserve Select type plan.

ALCON,

Send these good suggestions up through your congressional reps and senators and prevent bad solutions by presenting acceptable ones. Go back and read the defense business board report if you think they won't completely ruin the military retirement system without touching the civil service system already in place for ATC, firefighters, law enforcement... and congress.

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words

Completely agree. The most recent criteria was updated in 2003, but the majority has been the same since the 80's. A bitter pill must be swallowed, by the legislators to re-structure the law, and the doctors to enforce the standards.

Edited by deaddebate
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FERS for law enforcement and Congress is 1.7% up to 20 years and 1% thereafter. That nets you 44% of your Top-3 at a 30 year retirement and 34% at 20.

Sounds worse (it is), but you also vest at 5 years and they match TSP up to 5%* during your entire career. That deal would work out far better for the 80% of veterans who will never retire and would IMHO still be enough to get you the high quality career officers the military needs. It's still a pension which good luck finding that in the private sector these days.

* - the calculation is a little more complicated, but if you contribute 5%, the gov matches 5%. Uncle Sam kicks in 1% regardless of what you do, so if you're worried about them "touching your paycheck" you still get something you're not getting right now.

Sounds like a good idea, but here a few things to consider...

For one thing, current laws allow us to collect our Law Enforcement retirement at age 50, after completing 20 years of covered service. If one does 25 years, then the retirement can be collected at any age. If this were to apply to the military, there would be, in essence, no retirement benefit unless one completes 25 years of service, or at a minimum 20 years and can wait until age 50 to collect. So really, all it would do is make everyone serve 25 years for retirement, as there's really no incentive to get out before that. Should we leave (I'm a reservist who works as a fed leo full time) before our retirement, we can apply for a deferred retirement at either age 62 or our min retiremten age, however there are no health insurance benefits with this type of retirement (and the requirement to do the 5 years to vest). TSP also follows us. Should we transfer to a non-leo position, we lose those "covered years" (i.e. they revert to only being worth 1% instead of 1.7%), despite the fact we paid 1.3% of our base salary (non-covered positions only require 1% contributions from employees).

Another thing is that with the 6c/12d retirement, there's a social security supplement for us to hold us over until we get to the age where we can collect social security (b/c of the mandatory retirement age). That's another item that would need to be addressed - would that apply to the military also?

At 25 years, one can expect to collect 39% of their average high 3 salary under FERS LEO retirement. That's a huge difference from the current 60% a service member would receive for the same number of years. Who in their right mind would stay for that? Also, the military retirement fund isn't the problem -- it's mainly our healthcare. Also, I'm home every single night from my LEO job (although there is forced OT but we receive compensation for that either through LEAP or AUO depending on your agency). I can say no to being sent overseas - I do have to go on a stateside tdys if required, but they're few and far between. I work my share of holidays and weekends, and crappy hours, but even then I still make it home for part of the holiday/b-day party/bbq/ little league game/etc. Not putting down what I do, but the commitment to the military is much greater than that of my civilain LEO position -- there's a need for a unique retirement for the military. I do both and I can say there's no comparing the two -- I miss alot more of life and make more sacrifices in the reserves than I do for my agency.

In my opinion, watering down the retirement will cause the better people to leave and those that stay will be the ones who can't do anything else - exactly what we don't want to further encourage.

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"Bring warrants to the AF"? Be careful what you ask for. You do realize they still have to promote or they are booted after a two time non select? AND, promotion rates for W3 (in the 50%'s if I remember correctly) were lower than for W4 last year. The Navy had a test program years back where they brought in 10 in a program where they could fly everything but fighters (cause they are special). I don't know what the results were but they did not pick up the program after that. If the AF gives the Army all RW, does that mean we have to give all FW to the AF? That didn't work out well last time we did that.

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"Bring warrants to the AF"? Be careful what you ask for. You do realize they still have to promote or they are booted after a two time non select? AND, promotion rates for W3 (in the 50%'s if I remember correctly) were lower than for W4 last year. The Navy had a test program years back where they brought in 10 in a program where they could fly everything but fighters (cause they are special). I don't know what the results were but they did not pick up the program after that. If the AF gives the Army all RW, does that mean we have to give all FW to the AF? That didn't work out well last time we did that.

Yes, give the Army the RW. 90% of the AF does not realize we even have them...and that includes leadership. As for FW, the C-26 should have never been given to the AF...they totally pooched that one up. They should have gone to the Army..instead, they are taking them to the bone yard.

The AF seems to think a college degree is required to fly an airplane. I am fully aware of the warrant system..and if you are not promotable, there is usually a reason. I do not see why that would be a show stopper for the program.

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Yes, give the Army the RW. 90% of the AF does not realize we even have them...and that includes leadership. As for FW, the C-26 should have never been given to the AF...they totally pooched that one up. They should have gone to the Army..instead, they are taking them to the bone yard.

The AF seems to think a college degree is required to fly an airplane. I am fully aware of the warrant system..and if you are not promotable, there is usually a reason. I do not see why that would be a show stopper for the program.

I'll bite. Why, other than your perceived notion that 90% of the AF doesn't know about us, should we get rid of all helos? How long do you think the Army will maintain a dedicated CSAR/PR airframe? After five minutes they'll say, "oh yeah, we'll do that if we have time, or we aren't doing other things already," but they'll always have other things to do. Or, are you of the ilk that we don't need a dedicated CSAR force because of ten years in OEF? I see you're a forward thinker.

Other than that, I don't care about all helos going to the Army. I just happen to believe CSAR/PR necessitates a dedicated force. Oh yeah, QOL sucks, so that would be a downside...

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First off, I spent 5 years in the CSAR community, on the -60. While no expert, I learned plenty and appreciate the efforts of the CSAR community. I have also seen the other branches work PR, and they all do it. I have seen the Army work "PR" in theater, and while there are differences, they have been no less effective and in most of the cases I have seen personally, the Army was there a lot quicker and with a whole lot more supporting firepower.

I agree there should be a dedicated cadre to perform PR, but the AF does not have to be that entitiy. Helo's in the AF are like cops, no one likes them until they need them. The AF simply does not know what to do with them, does not support them, and has no real plan to support them. If they were so important to leadership (made up of mostly fighter dudes who most benefit from the concept), then why are they not supported?

So..now, who is the forward thinker?



I'll bite. Why, other than your perceived notion that 90% of the AF doesn't know about us, should we get rid of all helos? How long do you think the Army will maintain a dedicated CSAR/PR airframe? After five minutes they'll say, "oh yeah, we'll do that if we have time, or we aren't doing other things already," but they'll always have other things to do. Or, are you of the ilk that we don't need a dedicated CSAR force because of ten years in OEF? I see you're a forward thinker.

Other than that, I don't care about all helos going to the Army. I just happen to believe CSAR/PR necessitates a dedicated force. Oh yeah, QOL sucks, so that would be a downside...


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