Apparently this is coming straight from the Pentagon. After reading through the article I wondered what the good members of this board thought of the proposal and whether they agree or disagree that the current system is unfair. That kind of struck me as odd, but I could at least see the point that was trying to be made by that statement.
Does the current TSP not work strictly like a 401k, if you leave before 20 years time in service are there any penalties regarding that account?
Links to the two articles:
http://www.military.com/news/article/no-more-retiring-at-20-years.html (quoted below)
http://www.airforcetimes.com/news/2...-calls-for-radical-retirement-overhaul-072511 (this article is a lot more in-depth)
Does the current TSP not work strictly like a 401k, if you leave before 20 years time in service are there any penalties regarding that account?
Links to the two articles:
http://www.military.com/news/article/no-more-retiring-at-20-years.html (quoted below)
http://www.airforcetimes.com/news/2...-calls-for-radical-retirement-overhaul-072511 (this article is a lot more in-depth)
July 26, 2011
Stars and Stripes
A sweeping new plan to overhaul the Pentagon’s retirement system would give some benefits to all troops and phase out the 20-year cliff vesting system that has defined military careers for generations, the Military Times newspapers reported.
The plan calls for a corporate-style benefits program that would contribute money to troops’ retirement savings account rather than the promise of a future monthly pension, according to a new proposal from an influential Pentagon advisory board.
The move would save the Pentagon money -- at a time when it's being asked to cut at least $400 billion -- and benefit troops who leave with less than 20 years of service.
The yearly contributions might amount to about 16.5 percent of a member’s annual pay and would be deposited into a mandatory version of the Thrift Savings Plan, the military’s existing 401(k)-style account that now does not include government matching contributions, according to the Times.
Proponents said the plan would allow more flexibility for servicemembers, who could decide how they want to invest their retirement savings, and for the military, which would be allowed to offer higher contributions to troops who deploy frequently or take hardship assignments.
The Military Times has more on the proposed overhaul, including a summary of how servicemembers would be affected, depending on their length of service.