Feral Jundi

Friday, July 29, 2011

Military News: Military Retirement Is More Generous And Expensive Compared To Private Sector

Hat tip to Thomas Ricks over at Foreign Policy for pointing this one out. Data like this seems to be missed when we discuss the costs of a standing government army, versus the private industry.  So stuff like this really points out the differences between public and private.

I have yet to work in a company that had any security contractor retirees. Hell, I would be lucky to have a retirement package offered, and most gigs these days seem to be all independent contractor stuff. That is the reality of today’s ‘disposable workforce’. So for me, I just assemble my own retirement plan and continue put into it from the various contracts I work.  Sometimes I was lucky enough to work a contract with a 401K plan, but those were few and far between.

The government seems to be the only industry left that actually has folks that work 20 years or 30 years, and has retirees under that system. It is actually a pretty good deal and many retirees collect pensions and go on to work other jobs.

In the security contracting industry, you see a lot of retired military folks who do exactly that.  They collect a nice pension after working 20 years in the military, and then go on to be a private contractor and make even more money.  So I could understand why the Pentagon and today’s cash strapped US government is taking a second look at this system. You could also guess the reaction of guys in the military that would construe this study as a threat to their good deal. The question to ask is will the government modify the current military retirement system to match that of the federal government, and get a few more years of service out of their soldiers? Or will they succumb to the politics of the matter, and realize that a ton of military retirees and current soldiers vote.

Who knows, but I do know that the US government is in the process of making some adjustments to the budget and spending. So they are looking at all and any options of cutting costs, and the military is no exception.

The other thing I wanted to mention is that I certainly hope these statistics are factored into future cost benefit analysis between government military forces and private military forces.  There are so many costs to consider when maintaining a standing army during times of peace and war.  Not to mention that all of these retirees in the military are also drawing healthcare benefits, and the legacy costs of that must be equally as high.  I mean if a guy retires at age 40 give or take, and the average life expectancy of a human these days is around 75, then that can add up to a lot of money that tax payers will be paying over the course of that individual’s life.

Here is the report that goes into more detail about military retirement and it’s costs. –Matt

Powered by WordPress