military retirement benefits

There exists in our military a system which provides a constant pension for anyone who is willing to put themselves through 20+ years of active service to the country.  It gives the individual 50% of the salary they are used to (the average of the last three years of their duty).  Currently, the average retired (20+) colonel can receive a pension salary of $50k.  FY11 pay charts   For each year after 30, you get an additional 2.5% added on up to 75%.  This is only for base pay.  Retired members receive no partial allowances (BAS, BAH, FSA, combat pay, etc.  google them).  There is a whole separate thing under the VA for healthcare benefits.

Well, the government wants to change it all.  Here's their (really fucking horrible editing job) presentation
They want to pay us all an extra 16.5% of our base pay, but put it directly into the Thrift Savings Plan.

I want to do some math here. I'm going to put it into excel and run it as if I were a brand new Second Lieutenant as of June 2011.  It's going to be exactly 20 years of service.  And expecting the pay charts to increase 3% annually to make up for inflation (the same amount they have historically increased military pay for the past several years.  they do the same thing for Congress, by the way).  Standard promotion for O2 (first lieutenant) is at 2 years.  From there it gets complicated but we'll say they get promoted to O3 at 5 years, O4 at 9 years, O5 at 13 years and O6 at 18 years. To make the math work, if O2 is made at 2 years, then O2 pay starts with year 3, or on the pay charts it is >2.  This would give the retired colonel an annual salary of $77,787.12.  And this amount also rises to match inflation.  And it lasts until the person dies.
The new plan would have paid the member an extra $311,587.70 by the time they had reached their retirement.  Assuming none of this money was taken out to pay for a house or education, they still wouldn't be able to touch it until they reached Social Security age.  (if SS is around by the time they reach that age, more on that in another blog).  Assume our 2LT was 22 at the time of commissioning, they would be 42 at the time of retirement.  Over the next 23 years (let's say SS age is 65 in the future), that money would have grown to (assuming it has always been growing at 7% interest annually) $10,382,149.33.  This amount is in future dollars, which have not been valued for inflation (because I don't want to do that math).
My question is, what is a 65 year old going to do with $10M? Do you know what 3% interest on $10M is?  It's $300K.  I would love to live on $300K a year.  I don't know what I'd do with it all.  I'd probably just keep investing it.  I would still have 4% growth on the $10M if I only took out $300K.
This makes it sound like a great plan.  I could have all of this money in the future.
Now, let's say our service-member contribute $5,000 to a Roth every year, which I do.  Over their 20 years in the military, my accounts should have $204,977.46.  By the time they can take that out, they should have $5,044,495.33.  That's assuming no other contributions have been made since retirement.

This has been a big exercise in math for the sake of saying that the government is essentially making us pay into our own privatized social security, instead of paying a proper retirement.
Ummm, why don't we just do this with everyone's money? Heck, my parents would actually have money saved up for retirement.
The reason we don't do things like this is because nobody wants to put away money for the future.  Everyone just wants to spend money.
The old system was in place because there is little incentive to remain in the military for a full career, other than a sense of duty.  A sense of duty will only get you so far in a community so shat upon by congress and the president, not to mention other members of that community.  Plus, you're volunteering to put your life on the line for your country.  You are also volunteering to have a below-nominal family life of being gone whenever the government wants you and not being compensated for that.
A  retired colonel in the Army will have spent about 5 years of his career deployed overseas.  He will also have spent 1-2 years of his career away from his family at training or some other temporary duty assignment.  That is about 7 years total where you are away from your family, spread out over the course of 20 years.  It can get worse if you're a sergeant at 20 years.  
There is huge discussion about a mass exit from the military if the plan changes.  People are shooting for a full career of 20+ years.  With the way the system works now, only about 20% of the people who try to, will make it to the 20 year mark.  There are a lot of things that you can't control.  And a lot of people don't even try to get to the 20 year point.  For many service-members, the military is only a small part of their life.  I think it would be great to give everyone a better incentive for being in the military.  But I don't think it's very wise to remove the best incentive for career officers.  I would love to be a 44 year-old colonel with a whole lot of career opportunities before me.  That would be awesome.  Will I try if they change the policy? Probably not.