2016 Defense Authorization Act- Retirement Overhaul?

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Incis0r

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There's no shortage, and the trade off is a retirement plan of sorts for those who serve less than 20.

Very true. Plus, don't forget, the age at graduation from dental school (and start of service) is 26-28 years old. Meaning that you RETIRE (not only money but healthcare - forever) before the age of 50 and can start or join a lucrative practice as a civilian. Not a bad way to supplement an income until you are eligible for Social Security and draw off your other retirement investments.

http://www.defensenews.com/story/defense-news/2015/10/22/obama-poised-veto-2016-ndaa/74386314/
 
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This kinda boils down to when you start your contributions to TSP. While in HPSP you aren't authorized to contribute, so by default...
 
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True, true. But I feel like most people staying in to make O-6 and do their 20 do so mainly because of the pension. HPSP, Specialty training etc. keep them in for 10 years. After that, they probably say "hmm, only 10 years away for a full pension, let's just go for it!"

If that is being reduced, isn't it likely that the dental corps will lose dentists as soon as their initial ADSOs are complete? Or maybe after their specialty ADSOs are done?

This will lead to less O5/O6 dentists, less dentists in command of clinics and administration, etc. I think that the services will need to do something to retain these officers.

Edit: just looked up the bill. Incentives are already being put in: Section 612- Extends certain bonus and special pay authorities for health care professionals.

Most dentists get out after their initial ADSO already. I don't think it will have the huge impact you may be expecting.
 
What if you do BOLC or ODS right after you commission during a 45 day ADT? You can contribute then right?

If accepted for the HPSP, I'd commission in 2017, and I'd love it if I could be grandfathered in under the old plan.

This actually stumped me because on October 30, 2000, the Floyd D. Spence National Defense Authorization Act was signed; it extends "participation in the TSP to members of the uniformed services, including the Ready Reserve.". I went back and read the NDAA, and is does say that once a soldier is "moved" to an inactive status, their contributions stop. However, I can find no policy or regulation that would prevent someone from contributing while on ADT, so I asked the Military Pay Office.

Because of your student status, there is no mechanism for you be able to set up an allotment - which is basically how the TSP contribution works. They went on to explain that the contribution is based on a 365 day year. In the simplest terms, you tell the pay office you want 5% of your base pay withheld for retirement. The pay office keys that into the system and the system takes your base pay for the year, and figures out a per-day amount (based on the full year - not 45 days).

So, according to the pay office you have two strikes against you. No allotments (because the majority of the money is stipend and not pay), and there is no system to pro-rate the percentage for just 45 days/year.

Bottom line - HPSP students cannot contribute to TSP.
 
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Let's wait and see what happens in the next five years...
 
Do you not have MyPay access while in HPSP? Not even during ADT? You can manipulate your TSP contributions from MyPay, no need to deal with any pay offices.
You would not be making any contributions to TSP, but you are ENROLLED. The reason you are not contributing is because your pay is a stipend; TSP is usually a percentage of your base pay. You also have the option of having bonuses and special pays go to your TSP account.
Say I am selected for HPSP, what's to stop me from taking my $20K and contributing all of it into my TSP account?
Also, if you do stay in the whole 20, you STILL get a pension. The only difference is that it will be reduced to 40%. If you are smart with your investments and maximize government matching, it may not be the worst deal in the world.
 
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As someone currently serving on active duty with 9 years in as of next month, I can tell you the consensus among military members is that this retirement overhaul is a bad deal. Yes, they are sugar coating it with the fact that the matching contributions amounts to some benefit for those who serve less than 20...which makes it a bad deal for everyone else.

Think of it this way. The overhaul was required to be budget-neutral; so if they overhaul the retirement system to give benefits to those who serve less than 20, that money had to come from somewhere...the only place it could come from (since again, the overhaul had to be budget-neutral) was from those who DID serve the full 20. Hence the cut from 50% pay to 40% pay at 20 years of service.

Ergo--if you're someone planning a full career in the military, this retirement overhaul is a bad deal for you.

I'm just glad I'll be grandfathered in to the old system.

With that said, they tried a similar overhaul of the retirement system (google the redux retirement system) back in the 90s. If backfired so badly that they brought back the old system within just a few years. This might happen to this as well.
 
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