Analyzing the "lies, damned lies & statistics" by those trying to radically revise the military retirement system
How many different "shades of lying" can appear in a single document?Recently a friend asked me to comment on the Modernizing the Military Retirement System presentation developed by the Defense Business Board. In reviewing that presentation, my first thought was the phrase "Lies, damned lies, and statistics" coined by Mark Twain (Wikipedia reference). After first responding to him via email, I decided to take that same email - without any significant modifications - and share it as a blog post. This is too important of an issue to just "let it happen" to us. Please review the presentation and my comments below. If you have any responses - either agreeing or disagreeing with my remarks - let me hear them.Bob###Slide 3 - The Interviews If those high level officials involved did not interview the following groups, then they did not capture the most important demographic information: -- Recent retirees
-- Pending retirees
-- Officers, with prior enlisted service, at the 10-12 years of service point
-- Others at the 10-12 years of service pointThat 10-12 year point is pivotal in the current system. For me that was the mid-90s, I had just finished my initial junior officer assignment. I received my Masters in Computer Resources & Information Management, and was already looking towards my 2nd career. I, along with many of my peers, would have "punched out" at that point if not for the retirement plan available at the 20-year point. Slide 4 - Where We Are TodayThat side paints a much too rosy picture. It highlights places where equivalent pays are higher, but it fails to include any of the negatives. Things like:-- Tours of 12-18 months away from your family
-- Working nearly 24/7 for weeks and months at a time
-- Working 18-20 hour days with no overtime and no additional compensation
-- Possibility of death, disability, PTSD, etc.Their stat of "enlisted pay ranks in the top quartile of that of high school graduates" is complete bullshit. The only way to make that a legitimate comparison would be to take a union worker that is putting in 12-14 hour shifts, 7 days a week, and then put into account all the overtime pay.In the attached file (Pay Example), I used a labor rate of $29/hour and 12 hour days, 7 days a week. Keeping in mind that MANY (if not most) of our deployed Soldiers would be ecstatic if they only had to to work 12 hour days. The other attached file shows the enlisted pay rates - those are monthly amounts.NOTE: The files originally attached to the email are included as inline images below. Slide 6 - FindingsI agree that 20 year payout makes retention more difficult, but that is the way they designed the "up or out" system. While agreeing that removing the 20 year payout would alter the "retention issue" at the 20 year point, they've failed to rigorously analyze whether they'd even have anyone to retain at that point. Also, the point about "76% leave between years 20 and 25" is very misleading. Again, that is the nature of the hierarchical rank organization.By the 20-25 year point you are either "going to be a Commanding Officer" or a "Senior Enlisted Leader", or you're not. Also, the stat about 75% of annual pay per year is ONLY after 30 years of service, it's only 50% at 20 years. And, that's not 50% of total pay, just basic pay.Take myself for example. I made well over $100K per year my last few years of active duty, but my monthly retirement is about $2700, times 12 that is $32,400; less than 30% of my total annual pay my last year of active duty. I only mention this because they are fudging the numbers. They are using "total compensation" numbers on slide 5 to demonstrate how well the military are paid compared to civilian counterparts, then they fail to be completely transparent about how the retirement pay is calculated.
Slides 7-11Calling those slides disingenuous would be overly kind. Several years ago the military implemented the Thrift Savings Plan (401K equivalent) to address these same issues.Saying that "Personnel with fewer than 20 years of service earn no retirement" is damn near a blatant lie. They all have access to Thrift Savings Plan. Many receive large re-enlistment bonuses, bonuses earned in a combat zone are tax free.
Slide 13They lost me at "60 to 65" and I suspect they will lose MANY others. Military service can't be compared to private sector jobs. The potential of a retirement income when launching a second career is a HUGE recruiting incentive.###The above response was an "off the cuff" email based upon my own personal experiences. Upon deciding to share the email as a blog post, I sought out a few additional references on this topic. Those references are posted below for anyone interested in reading more. Additional ReferencesOp-Ed by An Attorney
http://www.kloblawfirm.com/en/blog/8-military-law/61-department-of-defense-board-recommends-radical-overhaul-of-military-retirement-system Military Forums Discussion
http://forums.military.com/eve/forums/a/tpc/f/415197802/m/8400035271001/p/5
(download)
-- Pending retirees
-- Officers, with prior enlisted service, at the 10-12 years of service point
-- Others at the 10-12 years of service pointThat 10-12 year point is pivotal in the current system. For me that was the mid-90s, I had just finished my initial junior officer assignment. I received my Masters in Computer Resources & Information Management, and was already looking towards my 2nd career. I, along with many of my peers, would have "punched out" at that point if not for the retirement plan available at the 20-year point. Slide 4 - Where We Are TodayThat side paints a much too rosy picture. It highlights places where equivalent pays are higher, but it fails to include any of the negatives. Things like:-- Tours of 12-18 months away from your family
-- Working nearly 24/7 for weeks and months at a time
-- Working 18-20 hour days with no overtime and no additional compensation
-- Possibility of death, disability, PTSD, etc.Their stat of "enlisted pay ranks in the top quartile of that of high school graduates" is complete bullshit. The only way to make that a legitimate comparison would be to take a union worker that is putting in 12-14 hour shifts, 7 days a week, and then put into account all the overtime pay.In the attached file (Pay Example), I used a labor rate of $29/hour and 12 hour days, 7 days a week. Keeping in mind that MANY (if not most) of our deployed Soldiers would be ecstatic if they only had to to work 12 hour days. The other attached file shows the enlisted pay rates - those are monthly amounts.NOTE: The files originally attached to the email are included as inline images below. Slide 6 - FindingsI agree that 20 year payout makes retention more difficult, but that is the way they designed the "up or out" system. While agreeing that removing the 20 year payout would alter the "retention issue" at the 20 year point, they've failed to rigorously analyze whether they'd even have anyone to retain at that point. Also, the point about "76% leave between years 20 and 25" is very misleading. Again, that is the nature of the hierarchical rank organization.By the 20-25 year point you are either "going to be a Commanding Officer" or a "Senior Enlisted Leader", or you're not. Also, the stat about 75% of annual pay per year is ONLY after 30 years of service, it's only 50% at 20 years. And, that's not 50% of total pay, just basic pay.Take myself for example. I made well over $100K per year my last few years of active duty, but my monthly retirement is about $2700, times 12 that is $32,400; less than 30% of my total annual pay my last year of active duty. I only mention this because they are fudging the numbers. They are using "total compensation" numbers on slide 5 to demonstrate how well the military are paid compared to civilian counterparts, then they fail to be completely transparent about how the retirement pay is calculated.
Slides 7-11Calling those slides disingenuous would be overly kind. Several years ago the military implemented the Thrift Savings Plan (401K equivalent) to address these same issues.Saying that "Personnel with fewer than 20 years of service earn no retirement" is damn near a blatant lie. They all have access to Thrift Savings Plan. Many receive large re-enlistment bonuses, bonuses earned in a combat zone are tax free.
Slide 13They lost me at "60 to 65" and I suspect they will lose MANY others. Military service can't be compared to private sector jobs. The potential of a retirement income when launching a second career is a HUGE recruiting incentive.###The above response was an "off the cuff" email based upon my own personal experiences. Upon deciding to share the email as a blog post, I sought out a few additional references on this topic. Those references are posted below for anyone interested in reading more. Additional ReferencesOp-Ed by An Attorney
http://www.kloblawfirm.com/en/blog/8-military-law/61-department-of-defense-board-recommends-radical-overhaul-of-military-retirement-system Military Forums Discussion
http://forums.military.com/eve/forums/a/tpc/f/415197802/m/8400035271001/p/5
