The First Command Financial Behaviors Index® reveals most career
service members want to stick with current system
FORT WORTH, Texas–(BUSINESS WIRE)–Service members who expect to make a career out of the military prefer
to stick with a traditional pension rather than opt for the
newly-approved retirement reforms in the 2016 National Defense
Authorization Act, reinforcing the value of guarantees in ensuring
lifetime financial security.
The latest results of the First Command Financial Behaviors Index®
reveal that 73 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) who say they are likely to serve to full
retirement want to be grandfathered into the current retirement system.
These findings are consistent with monthly survey data collected since
the Military Compensation and Retirement Modernization Commission
announced its proposal last year 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.
“Our career service members are understandably wary of giving up their
traditional pension in favor of matching funds and other elements of
defined contribution plans,” said Scott Spiker, CEO of First Command
Financial Services, Inc. “Defined contribution plans have not worked for
middle-class Americans in building a suitable income for retirement.
There is no reason to believe they will work for our middle-class
military force either.”
At the same time, many career military members have supported the idea
of retirement reform for their non-career colleagues (that is, the
people who would otherwise leave service without any
government-sponsored retirement savings). In the September survey, 66
percent of respondents said they were in favor of the blended retirement
system. When asked to explain why, those in favor of the new system said
it will increase “the amount of people who would be eligible for
benefits” and “provide more financial benefits” for service members.
“The traditional 20-year retirement system has been an important part of
our nation’s commitment to ensuring lifetime retirement security for
generations of our men and women in uniform,” Spiker said. “Service
member families are sympathetic to the notion of offering new benefits
to those who do not serve long enough to earn the traditional lifetime
pension, even as they oppose changes that would reduce the size of their
About the 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. http://www.firstcommand.com/fbi/
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
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.
First Command Financial Services, Inc., is the parent of First
Command Financial Planning, Inc. (Member SIPC,
First Command Advisory Services, Inc., First Command Insurance Services,
Inc. and First Command Bank. Financial planning services and investment
products, including securities, are offered by First Command Financial
Planning, Inc. , a broker-dealer. Financial planning and investment
advisory services are offered by First Command Advisory Services, Inc.,
an investment adviser. Insurance products and services are offered
by First Command Insurance Services, Inc., in all states except Montana,
where as required by law, insurance products and services are offered by
First Command Financial Services, Inc. (a separate Montana domestic
corporation). Banking products and services are offered by First Command
Bank. In certain states, as required by law, First Command Insurance
Services, Inc. does business as a separate domestic corporation.
Securities products are not FDIC insured, have no bank guarantee and may
lose value. A financial plan, by itself, cannot assure that retirement
or other financial goals will be met. First Command Financial
Services, Inc. and its related entities are not affiliated with,
authorized to sell or represent on behalf of or otherwise endorsed by
any federal employee benefits programs referenced, by the U.S.
government, or the U.S. armed forces.
First Command Financial Services, Inc.
Mark Leach, 817-569-2419