On November 15, 2015, in a move that was largely unnoticed by the general public, the National Defense Authorization Act for fiscal year 2016 was signed. Among the hundreds of pages of facts and figures, pork barrel spending, and rhetoric was one alteration to how we pay our troops that will alter our military readiness for years to come.
In a move that was touted as “bi-partisan” and “in line with the private sector”, the federal government has done away with the military’s current 20-year retirement system.
The new “blended retirement plan” gives members of the military who join after January 1, 2018 an automatic contribution equal to 1 percent of their annual pay. The military will also match up to 5 percent of a soldier’s pre-tax contributions in exchange for not accessing that money until the soldier is 59.5. Pensions will still be available for those who go to 20-years, but rather than collecting 50% of their base salary for life, the soldier will only collect 30%.
In order to understand why this singular move just weakened the military’s readiness as a whole, it is important to understand the rhetoric behind it.
Rhetoric: Under the current system, only 1 in 5 soldiers will access the military’s retirement benefits after 20 years. The rest leave the military with nothing.
Truth: Since 2000, members of the military have been able to contribute a pre-tax percentage of their base pay to the federal government’s 401k plan – the Thrift Savings Plan. Like any other 401k, it can be rolled over to a civilian 401k upon leaving the military. Additionally, to say that those who leave the military leave with nothing is patently false. Education benefits, veteran’s status, and veteran’s health care continue with the soldier throughout his or her life, in many cases making the difference between whether that soldier has a college education or not.
Rhetoric: The new military retirement system will give top performers incentive to remain with the military beyond 20 years.
Truth: This is actually correct. But what the government is not considering are the second and third order affects of this decision. If more high ranking members of the military are staying until they can collect their TSP money at 59.9, fewer soldiers are being promoted through the ranks. Currently, officers who are passed over for promotion twice are forced out of the military, regardless of the reason.
If a 50-year-old colonel is sitting in a position of responsibility for nearly 10 years, until he either retires or is promoted, the lieutenant colonel behind him is not being promoted. Neither is the major behind him, or the captain behind him, or the lieutenant behind him. The log-jam that results is an impossible promotion system that is completely counter to what is currently in place.
If a lack of promotion doesn’t negatively affect morale (which it will), the leadership that sits in those positions will. Under the current system, if a high ranking military official performs an illegal act, such as charging his hotel where he is having an affair with his mistress to his government credit card, a congressional act is the only thing that can remove him or her from command. Since the current congressional environment is not conducive to action of any kind, the promise of a change of command due to retirement under the 20-year system is the only thing that keeps high performing enlisted soldiers or junior officers with toxic units. If the federal government wants to retain high performers beyond 20 years, they also have to have a bipartisan, functional, efficient way to eliminate poor performers.
Rhetoric: The new retirement system will only affect those who are entering the military after Jan 1, 2016.
Truth: It will also have a profound effect on military readiness in the future.
Unlike civilian organizations, promotion is the only monetary way to reward top performers in the military. The fundamental idea of the current rank structure is that leaders at every level will be identified, developed, and rewarded with additional rank in a timely manner, creating a young cadre of leaders who are as ready to fight as they are to lead. By eliminating the 20-year retirement program, the average age of leadership at all levels will increase as soldiers wait to retire until they are closer to the 59.5 year mark. This singular trend will turn the young, strong, idealist military we have now into a middle-aged, soft, group of average soldiers that no one can fire.
America deserves better than that. Those who selflessly fight for the freedoms of this country deserve better than that.