‘Bonus’ forfeits retirement dollars

By Tom Philpott: CNJ columnist

Thousands of military members entering their 15th year of service continue to be enticed by a wily government offer: a $30,000 bonus if they agree to take a deep and permanent cut in future retirement benefits.

The offer, called a Career Status Bonus, takes advantage of service people who are in financial distress, or easily lured by cash-in-hand, or who fail to grasp the amount of retirement dollars forfeited over their lifetime.

“This is an extremely bad choice for virtually all service members unless they believe they will not live long after they retire,” says Dr. Aline Quester, a manpower analyst with CNA, a government think tank.

“There must be a better way for people to get money other than to assume this reduction in retirement,” nearly $350,000 for some enlisted.

Quester, acting vice president at CNA who was team leader on Marine Corps manpower studies, has been urging careerists for years not to accept the bonus which is tied to a reduced retirement plan called Redux. She had done so through an annual report that describes the amount of retired pay they will forfeit, and through slide presentations to groups of career Marines.

While the bonus has been frozen at $30,000 since it was introduced in 2001, individuals who take it today forfeit, on average, nearly $100,000 more in lifetime retired pay than bonus takers did seven years ago, Quester said.