Blended Retiremant

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narcusprince

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Im curious what you all think about how the blended retirement system will effect physician retention in the military. I would surmise that it may decrease those that stay to 20. It becomes too costly to stay when you can earn 2-3x the money on the outside with 401k matching. The BRS softens the cushion of leaving before 20.

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If I'd joined under the blended system way back when, I would've gotten out when my ADSO was up.

It's not so much the value of the TSP you can walk away with. Let's be honest, the 4% federal match (of base pay) to TSP under the new system is a negligible sum. Even an officer who serves 10 years is only going to have on the order of $25-30K of matching contributions over that time. It's a whopping $2-3,000 per year.

The 20% reduction in the pension is a much bigger deal. If you assess the cash value of the pension by getting an approximately equal inflation indexed SPIA, it's a loss of $200-300,000.

Which of course is why the military is doing it. The new system is a good deal for the military, not servicemembers. No matter how they dress it up, its net effect is to dramatically reduce pension costs for lifers under the cover of tossing a couple bucks at short timers. They even try to hose the lifers one last time with the lump sum / reduced pension option at retirement.

Of course fewer people will stay until retirement ... whether medical corps or not. The BRS is clearly, objectively, a dramatically worse deal for lifers.

If you're 18 and joining for the GI Bill it's great, though. They'll get out as an E3 or E4 after 4 years or so, and have a couple thousand dollars in matching contributions. Assuming they opted into TSP contributions in the first place ... which most probably won't. Teenagers need beer money, er, I mean, non-alcoholic beverage money, not retirement savings. And so the military wins again - odds are that a majority of the people who'd benefit from the new program won't even opt into it in the first place.

As a cost saving strategy, the whole thing is brilliant.
 
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As someone who's going active in a month, would y'all recommend doing the blended retirement plan instead of legacy if the plan is to do my required six and get out? Seems like a better option then legacy which would yield nothing if I understand correctly.

Thanks for the input.
 
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As someone who's going active in a month, would y'all recommend doing the blended retirement plan instead of legacy if the plan is to do my required six and get out? Seems like a better option then legacy which would yield nothing if I understand correctly.

Thanks for the input.
If you don't plan on serving 20 years in the military you should 100% do the BRS.
 
This then begs the question, Is there any guarantee that any one will be doing 20+ years?
I would imagine no. Once the military gets rid of the legacy folks I doubt anyone will stay. Unless they have severe clinical deficiencies. Bad move for military medicine.
 
This then begs the question, Is there any guarantee that any one will be doing 20+ years?
Closest thing will be the USUHS + service academy / ROTC guys who exit residency still owing 10+ years.

Prior service guys are another group of obvious lifers, but for a while yet all of them will be retiring under the old system.
 
I would imagine no. Once the military gets rid of the legacy folks I doubt anyone will stay. Unless they have severe clinical deficiencies. Bad move for military medicine.
Well, it's not really a move by military medicine. This was driven by the ballooning pension costs and 99% of that is the line, not us.

As with so many other line-driven phenomena, the medical corps is just along for the ride with whatever system makes the most sense for the line. Even if that system is totally inappropriate or counterproductive to the medical corp's needs. Fitreps. Online training. PME. Fitness standards. And even the current/old retirement system is ill suited for the medical corps, because our pay is structured so very differently than the line.
 
Closest thing will be the USUHS + service academy / ROTC guys who exit residency still owing 10+ years.

Prior service guys are another group of obvious lifers, but for a while yet all of them will be retiring under the old system.
Yeah if someone goes rotc or the academy and then USUHS they will have anywhere from 14 to 18 years in toward retirement by the time they finish their obligation so I think you will probably find a lot of us sticking around to 20 still.
 
As someone who's going active in a month, would y'all recommend doing the blended retirement plan instead of legacy if the plan is to do my required six and get out? Seems like a better option then legacy which would yield nothing if I understand correctly.

If you don't plan on serving 20 years in the military you should 100% do the BRS.

your plan follows you if you transfer to the NG or reserves-- os if you do 6 and do 14 in the reserves you may want to initially take the legacy/cliff version.

@pgg 's post hits the nail on the head. there's real concern among some of the HRC people and in the AMEDD that the blended retirement will remove the impetus for the 12-14 year people (especially those in surgical and subspecialties) to stay in. there's a continuation pay they can hook you with at 12, but it's not a pension and still wouldn't make up for the difference pgg noted unless they bring out the blank checks.

this plus the new norm of "broadening" and operational assignments as BDE/WTU Surgeons and increased optempo is going to hit the MAJ/early LTC group especially hard.

--your friendly neighborhood cliff version and not giving it up caveman
 
I'm hoping my class will benefit from both sides. We are grandfathered into the old retirement, and the only way the medical corps are going to be able to meet retention goals are through huge bonuses in light of the new retirement system. No sane person would stay in past obligation for BRS.




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Seriously, read the healthcare portion of the 2017 NDAA. The end goal is to essentially eliminate AD physicians, save for a very small number in select specialties, and move to an almost exclusive civilian work force. Look around and you'll notice most MTFs and clinics are already staffed predominantly by civilians. Actions such as the BRS are mechanisms to get to this goal.


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Seriously, read the healthcare portion of the 2017 NDAA. The end goal is to essentially eliminate AD physicians, save for a very small number in select specialties, and move to an almost exclusive civilian work force. Look around and you'll notice most MTFs and clinics are already staffed predominantly by civilians. Actions such as the BRS are mechanisms to get to this goal.
While I agree that the BRS will further that goal, I don't think it's right to say it's a deliberate mechanism.

I am 1000% sure that medical corps staffing wasn't even the smallest piece of the deliberations held to save $ by changing the retirement system. It was the line, the line, and the line.
 
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Seriously, read the healthcare portion of the 2017 NDAA. The end goal is to essentially eliminate AD physicians, save for a very small number in select specialties, and move to an almost exclusive civilian work force. Look around and you'll notice most MTFs and clinics are already staffed predominantly by civilians. Actions such as the BRS are mechanisms to get to this goal.


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The changing retirement isn't at all necessary to bleed off docs, they could have just not promoted, "special pay"ed or recruited us...

This was about dropping all those line folks from a .25 multiplier
 
The changing retirement isn't at all necessary to bleed off docs, they could have just not promoted, "special pay"ed or recruited us...

This was about dropping all those line folks from a .25 multiplier

They have done some of this, though. Promotion rates after O4 are significantly lower than in past years, and the special pay restructuring actually causes you to lose money incrementally after a certain point. My total annual actually dropped $500 with the new system, and it slowly increases every couple of years.
 
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