Retirement Debacle Illustrates Why No One Trusts Government

Everyone expects to be fleeced by profit-grubbing businesses. Deceit and wallet-baiting by grimy grifters engaged in the capitalist game are embedded in the American way, for better and worse.

But one does not, and should not, expect such treatment from the government, even and especially when that government is also serving as employer.

Which brings us to the Blended Retirement System (BRS) Opt-In fiasco that has been unfolding in the new year. Up to the same bureaucratic dirty tricks that have long since exposed it as an institution without honor, the Department of Defense (DoD) managed to devise an ornate scam that has tricked servicemembers into unwittingly choosing a retirement plan likely to net them a huge loss of pension income.

BRS is the brainchild of the Defense Business Board, a teeming cabal of incubi and succubi employed as proxies by the defense establishment to wage a perpetual war against personnel costs in the DoD and service budgets. The more cash they can manage to drain out of the budget through a rolling series of jumped up conferences, faux studies, and false facades, the more will be available to fund weapons systems that help to sustain the profits of weapon manufacturers and other assorted defense contractors. These are people with lobbying budgets and political influence. Servicemembers, meanwhile, lack such powerful backers.

BRS replaces the legacy system — which gave retirees a defined benefit for life at 2.5% of base pay times the number of years they served — with a revised system that substantially reduces the defined benefit by reducing the multiplier to 2.0% per year.  This equates to a 20% loss of retirement income at the 20-year mark.

Though this will be offset to an extent with matched contributions to the DoD’s Thrift Savings Plan, the deal is a net loser for the rank-and-file. An E-7 retiring at 20 years of service will get $450 less per month than under the legacy system, or about $250,000 less over the life of the pension.

This is, of course, why the DoD loves it so much. It will save the department an estimated $600M annually in personnel retirement costs and roughly $3B over the five years of the DoD’s budget outlook. This is a level of money for which the department has proven it will go to budgetary war. It was only four years ago Congress — in league with DoD suits — slipped a nasty provision into the federal budget that retroactively altered the terms of traditional retirement to remove cost of living adjustments (COLA), heisting $80-120k from each and every retiree. The provision was eventually repealed.

Engage Your Government. Sometimes, it Works.

But with BRS, the DoD got some of what it had been looking for all along. To steer clear of the “broken promise” argument that defeated the COLA grab, DoD grandfathered active duty servicemembers into legacy retirement. But it gave some members the ability to Opt In to BRS at any point in 2018. This is where the underhanded tactics come in.

Rather than conduct the Opt In process in a clear and transparent manner, DoD put a link at the top of the MyPay website where servicemembers go to check the earnings. The link is situated where they were accustomed to clicking to see their monthly statements. If a person accidentally clicks on the Opt In link, the following screen asks them if they have received training on the Opt In process. Problematic is that there is no clean way to say “no.” A person either clicks yes or clicks on an option to go take the training online. It’s not clear how to back out of the screen.

If at this point an individual is confused and selects “yes,” they are taken to a confirmation screen. If they then confirm BRS Opt In, they have changed retirement plans. According to DoD, this is final and irrevocable.

Now, some of you reading this are going to respond by saying if someone is fool enough to make this mistake, they deserve what they get. This is the standard form of petulant and self-obsessed Blue Falconry these days, especially on social media. Go ahead and get it out of your system, but understand how fundamentally you’re missing the point.

Opting In should not be possible online.

Opting In should only be possible with a human verification that the individual has been given training on the ramifications of Opting In — training which was made mandatory in the law containing BRS.

Opting In should not under any circumstance be irrevocable, which smacks of administrative convenience. There should be a “cooling off period” for a transaction of this magnitude, during which an individual can change his mind.

Without doubt, DoD constructed this slapdash mechanism in Persian bazaar fashion knowing full well it would trip up a small percentage of servicemembers. With each mistake worth a quarter million in personnel costs, not many people have to fumble this process for the winnings to start piling up.

This is why no one trusts government. You expect to be charged 300 percent markup on soda at the movie theater. You expect the phone company to pack hidden charges into your bill and charge you outrageous termination fees.

You don’t expect your employer to trick you into unknowingly stumbling through a one-way door … making a decision that will cost you and your family hundreds of thousands of dollars.

This kind of cynicism breeds distrust and distance between employer and employee. Distrust and distance are the arch enemies of discretionary effort, without which DoD cannot hope to successfully field a force capable of winning the nation’s wars. It’s certainly not worth what amounts to a massive amount of money for a modest and middle-class American military family … while barely constituting dust on the cover of the F-35 budget.

Things were going to be different with Mattis. Right up until they weren’t.

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