What about for PHS or other active duty agencies?
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We don't know. We have the question before OLC (Office of Legal Counsel) due to our Interagency Agreements, but we believe that the question will have to be dealt with by the PTT directly. My own personal guess (and it is a pure guess) is that I highly doubt there will be any changes to ones that are already on service contracts due to past OPM and MCJ rulings on changing service contracts midstream (it can happen, but it's really difficult and the government has the burden of proof on why it must be done which for money, that's not sufficient). I'm also counting on the Republicans resuming their usual behavior with respect to the DoD in terms of being ok with manpower expenditures considering the bureaucratic headache in changing the system.
Now, also remember, the Republicans have within the same group some people who are proposing (and passed their version of) reforms to the DoD retirement system to being more a contributory rather than a defined benefit plan. That's been on the books for awhile for action, and I have a feeling that they'll act on the panels recommendation this time which have implications for education as well.
http://militarypay.defense.gov/Port...ementSystemInfographic_12.9.15_FINAL3_508.pdf
Right now, the numbers work like this given a 4.5% annual return (which is the experience of most people in the TSP, our 401k):
1. If you are certain that you will NOT make a 20 year career, you should go under the new system immediately.
2. If you do intend to make it a 20 year career (or are unsure):
a. If you are enlisted and don't make it past E-5, you're still probably better off in the old system as the salary is too low to offset the contributions.
b. If you are enlisted and past E-5, the old system is still advantageous, but the new system may work if you are an aggressive investor.
c. If you are an officer and are on the staff track (which the target rank is O-5), you're better off in the old system.
d. If you make it to O-6, you will need to serve around 26-28 years to even out with the old system if you go into the new system. If you make it to O-7, and higher, the jury is out whether the old or the new works better as the length of service time and statutory maximums become a factor.
However, in ALL cases, a civil servant will do better than the DoD given equivalent service when the system is put into place in 2018 as the civil service starts higher and making SES is easier than promotion beyond O-6 and even with the 1.1% civilian vs. 2% military difference. Even if you stay a career 12 or 13 civil service, the usual salary progression is better than the military for retirement purposes (remember, those allowances don't count, just the statutory salary). That 0.5% difference is a HUGE deal as the military statutory pay is so low to begin with that the greedy think they can take advantage compared to civil service, but effectively, it's a tax on idiots in the end as no one will put away sufficiently at the junior ranks to make the compound interest worth it.
