An overwhelming number of military spouses will be involved in deciding which military pension system to be part of, according to the First Command Financial Behaviors Index released Thursday.
Eight-two percent of spouses in middle-class military families, which is defined as those with at least $50,000 in income, will be extremely or very involved in the decision making process, said First Command Financial Services Inc., a financial services organization for military personnel.
Starting at the beginning of 2018, military personnel with 12 years of service or less have a choice of remaining in the traditional guaranteed military pension system or switching to a new plan that includes some choices and additional risk. New enlistees are automatically part of the new pension system.
Twenty percent of the husbands and wives of military personnel feel they should be the primary decision makers, and an additional 39 percent of the spouses think they should have a voice in the choice, First Command said.
“Wives and husbands receive limited access to government education or training and have no voice in decisions involving the new program. That’s a troubling oversight [because] the Blended Retirement System decision is clearly one of the most important financial choices facing our nation’s career military families," said Scott Spiker, chairman and CEO of First Command Financial Services.
The new pension system is the first major overhaul of the military pension in modern history. It includes a 20 percent cut in the traditional pension, and a defined contribution plan that includes matching funds through the Thrift Savings Plan.
Almost all of the spouses in the survey said they would find education and training to be a valuable tool in helping them understand the blended retirement system opt-in decision, said First Command. The survey included 530 military personnel.