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First Command Reports: Career Servicemembers Divided Over Retirement Reform

The First Command Financial Behaviors Index® reveals majority of middle-class military families are in favor of proposed changes to military retirement but prefer to stay under current system

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FORT WORTH, Texas — America’s career servicemembers are responding positively to a proposed overhaul of military retirement. Just don’t ask them to give up their current benefit.

The latest results of the First Command Financial Behaviors Index® reveal that 66 percent of middle-class military families (commissioned officers and senior NCOs in pay grades E-6 and above with household incomes of at least $50,000) are in favor of the Military Compensation and Retirement Modernization Commission’s proposal to restructure the traditional 20-year retirement system as a blended program that includes a reduced pension in exchange for a lump sum bonus and a new 401(k)-type plan. Just 13 percent are unfavorable to the plan.

But this high level of support does not mean that servicemembers want the new proposal for themselves. Seventy percent of respondents who say they are likely to serve to full retirement prefer to be grandfathered in under the current system.

“These survey results suggest that career servicemembers are divided over retirement reform,” said Scott Spiker, CEO of First Command Financial Services, Inc. “They are relatively open minded about retirement reform in general, but they are understandably wary about giving up a significant financial benefit that has been a key part of our nation’s lifetime commitment to generations of men and women in uniform.”

In related findings, servicemembers also expressed support for the Commission’s recommendations for:

  • Programs to improve financial literacy (58 percent),
  • A new Survivor Benefit plan option (58 percent) and
  • A new military healthcare system (52 percent)

The Commission’s recommendations are of high interest to career military families. September survey results reveal 69 percent of middle-class military families are aware of the Commission’s proposed changes to military pay and benefits. Out of that group, 65 percent are in favor of the proposed changes. In contrast, just 12 percent of civilian families are aware of the proposed changes. Thirty-seven percent are in favor of them.

“Looking ahead, we expect to see an increasing awareness of the Commission’s recommendations in general and a more detailed and informed understanding of what these proposals could mean for America’s career military and their long-term financial security,” Spiker said. “Caution is well justified, particularly in regards to retirement reform.”

About First Command Financial Behaviors Index®

Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. Financial Behaviors Index

About Sentient Decision Science, Inc.

Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.

About First Command

First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.


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