Battle of the Bilge

Please Note: MOAA has established a single landing page for the retirement proposal here: http://www.moaa.org/retirementcuts

Controversial Proposal

In July of 2011, the Defense Business Board presented a revamping of the military retirement structure, based in large part on the findings of the Quadrennial Review of Military Compensation of 2010. The proposal has been met with serious concern and strong opposition by MOAA and other organizations. In simple terms, the proposal would do away with the 20 year service pension plan currently in operation and replace it with a 401k style savings plan that would start at the beginning of a serviceman’s career. We believe that the proposed changes both significantly devalue core career incentives and would harm recruitment and retention efforts. Anyone familiar with the REDUX program, which was so detrimental that it was significantly altered in 2000 and now is offered as an alternative choice of retirement options, can see how this program would play out.

For a look at what the DBB proposed, click here.

MOAA’s Response

MOAA has written about the retirement overhaul proposal several times. From the July 29th Legislative Update:

“MOAA believes the QRMC plan would do grave damage to long-term retention and readiness. By dramatically reducing its financial commitments to servicemembers without any reduction in the enormous sacrifices demanded of career troops and families, it would destroy the sense of reciprocal commitment between member and service.”

From the August 12th Legislative Update:

“The new retirement reform proposals usually envision even more severe cutbacks of guaranteed retired pay amounts, relying more on a contributory Thrift Savings Plan (TSP) system under which services would contribute varying amounts each year depending on service needs for particular skills. Under that system, full retired pay wouldn’t start until age 57 and TSP withdrawals wouldn’t start until age 60.

Just as the Redux cut was applied prospectively (that is, only to people who entered service after the retirement law was changed), most who have endorsed major retirement changes envision applying the new rules only to new entrants.

But a recent retirement task force briefing to the Defense Business Board called that a “high-cost option.” It also highlighted a “lower-cost option” under which all current members would be converted to the new system as of a specific date — grandfathering only service already rendered as of that date.

It’s not clear exactly how that might work. A person with 20 years of service as of the conversion date might have future retired pay capped at 50% of high-three-year average basic pay, even if he or she served another 10 years, with subsequent service earning only some level of TSP deposits. A person with 10 years as of the conversion date who went on to complete a career might end up drawing retired pay capped at 25% of high-three-year average basic pay.

But this is only speculation, because no details or decisions have been offered yet.”

It is important to note that the DBB proposal is not the new law, and will only be one of the many possible options that DoD and Congress consider in the coming months and year. But with the debt talks that are ongoing and the requirements of automatic defense reductions that were written into the recently passed debt ceiling deal on the table, retirement benefits are in dangerous territory.

To help illuminate the dangers and inform the public of what is happening with the retirement discussions, MOAA’s Director of Government Relations, Col Steve Strobridge, USAF (Ret.), fielded questions in an interview with the Washington Post on August 11th, and produced the video that you can view below.

In Focus: Retirement Reform from MOAA on Vimeo.

You Can Help

What can you do?

1 – Send your elected officials a MOAA-suggested message urging them to ensure that ongoing budget-cutting efforts don’t undermine the core pillars that are essential to sustaining a high-quality all-volunteer force.

2 – Urge all of your friends and relatives to do the same.

Non Beneficial Mutation

During the life-cycle of a viral email, there are inevitably changes of various elements, both small and large. Usually these changes take place over long periods of time, spanning administrations and political changes. We gave an example of a current long period alteration recently with the Cindy Williams article being repackaged after 10 years to target President Obama. It is rare that changes are made after only a short time, as logic would imply that there would be some memory of the email that was just released and obvious differences would be clear. This is one of those cases. As we detailed in ‘Warning to Veterans Hoax’, there is a viral email posing as an official Department of Veterans Affairs Warning regarding a group called Veterans Affairs Services. While the original email pointed service members towards the VA Office of the General Counsel, the new mutation points people to the National Guard Bureau. The message also states that the warning originated from NGB this time, in place of the previous attribution of the Office of the Secretary of the Department of Veterans Affairs.

For the original language, see the link above to the article on the Warning to Veterans Hoax. Here is the new language that was inserted:

This scam continues to capture personal info and potential identity theft even though prior warnings have been sent throughout DoD. The following is an advisory sent out by the National Guard Bureau (NGB) in reference to a group called “Veterans Affairs Services”

VAS may be gaining access to military personnel through their close resemblance to the VA name and seal. NGB Legal Counsel has requested that the NGB Provost Marshal Office coordinate with DoD to inform military installations, particularly mobilization sites, of this group and their lack of affiliation or endorsement by VA to provide any services.

After receiving a number of inquiries to their office, a representative from the NGB was tasked by the NGB Chief Counsel to investigate how they were included in the warning and they reached out to us due to the previous hoax warning. After researching the change in the email, we found that the new verbiage first appeared on a public website on February 22nd, in two locations, here and here.

From there, the message was shared on Facebook and currently appears in this form on numerous blogs and message boards. What has made the problem more exacerbating is the fact that many people have received the warning from trusted sources, like the workplace or fellow service men.

Clearly, NGB did not put out this message, and just as the DVA did not put out the original, the primary source for the message is unclear. While the warning for military members both active and retired to be extremely careful when dealing with any financial institutions regarding disability pay ‘settlements’ or retired pay plans is important, the focus of both variations of this warning has been VAS. We’re growing increasingly suspicious that this is more of a financial trick by a competitor of VAS, which raises more concern than a falsely attributed warning.

We’ll keep an eye out for more changes or details, but please help out by spreading the word that the National Guard Bureau did not put out this warning, and they are not handling inquiries regarding VAS.

Discussion

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Spreading the Word

The article we ran back in December about the ‘Warning to Vets‘ email hoax has been picked up in part, with some further information given to the reporter, by Army.mil here. A short sampling of the article, including additional insight from VFW:

FORT SAM HOUSTON, Texas — An old e-mail lurking in the electronic cloud is making rounds again in a renewed attempt at phishing for veterans’ personal information.

“While the e-mail is not what it purports to be, the message lends itself to a much bigger issue of the exploitation of veterans using survivor benefits as a hook by financial services companies to get their business,” said Matthew Lofiego, Military Officers Association of America’s (MOAA) deputy director of the Member Service Center.

“There are so many organizations out there targeting veterans, offering them money and becoming the beneficiary of their benefits,” Lofiego said.

“Servicemembers and veterans need to be careful in this day in age,” said Jerry Manar, deputy director for Veterans of Foreign Wars, a non-profit service organization of combat veterans in the U.S.

“Many scams seem to offer something for very little money or for free. Once you’re involved with them they do a bait and switch and begin charging money for services,” Manar said, stressing residents of retirement and nursing homes are often targeted and particularly vulnerable.

“It is a growing problem, and one that MOAA is paying close attention to, especially the tactics being used,” Lofiego said.

Recently forwarded throughout the Army community and titled “Warning To Veterans,” the current version of the e-mail advises against using the services of an organization called Veterans Affairs Services and appears to come from Kevin Secor, Veterans Service Organizations liaison, Office of the Secretary of the Department of Veterans Affairs.

MOAA contacted the VA and VSO Liaison Kevin Secor to confirm. Lofiego said Secor stated that he never sent the message.

Representing MOAA

This morning, MOAA’s President, Vice Adm. Norb Ryan, Jr., USN (Ret), participated in a discussion on Fox News’ morning show “Fox & Friends” about military pay raises. Admiral Ryan carried the MOAA message of an increase in active duty pay from the 1.4% proposed amount to 1.9%.

The best quote, in response to a question regarding why there is resistance to this modest pay increase:

“This is a recommendation from the Pentagon and I happen to believe that the bean counters have taken over and they’ve forgotten Leadership 101 principles. Like I said, you have to have enough money for the weapons systems, but you have to have enough money for the only weapon system that has never let this country down: it’s people.”

View the full video here:



Take action and send your representatives in Congress a message via MOAA’s Action Center by clicking here and filling out the message.

Introduction

In a change of pace from the usual insidious messages that are forwarded around the internet, the email in question does not necessarily provide bad information, but it did not, as stated, originate from the Department of Veterans Affairs. MOAA contacted the VA and VSO Liaison Kevin Secor to confirm and he stated that he never sent the message. Other sources, including the Better Business Bureau, have confirmed that Michael Dougherty is a current staff attorney for DVA, but did not write this email and that the VA did not issue this warning. However, there is some wisdom to be gleaned from the apparently fake message.

The Email (one version)

WARNING TO VETERANS

Forwarded by Kevin Secor, VSO Liaison, Office of the Secretary of the Department of Veterans Affairs.

An organization called Veterans Affairs Services (VAS) is providing benefit and general information on VA and gathering personal information on veterans. This organization is not affiliated with VA in any way.

VAS may be gaining access to military personnel through their close resemblance to the VA name and seal. Our Legal Counsel has requested that we coordinate with DoD to inform military installations, particularly mobilization sites, of this group and their lack of affiliation or endorsement by VA to provide any services.

In addition, GC requests that if you have any examples of VAS acts that violate chapter 59 of Title 38 United States Code, such as VAS employees assisting veterans in the preparation and presentation of claims for benefits, please pass any additional information to Mr.Daugherty at the address below.

Michael G. Daugherty
Staff Attorney
Department of Veterans Affairs
Office of General Counsel (022G2)
810 Vermont Avenue, NW
Washington, DC 20420

Reality

As stated above, the message is not an official DVA release. As reported by the Better Business Bureau:

“Someone pretending to be an attorney with the U.S. Department of Veterans Affairs (VA) is sending an email to military veterans “warning” them against using the services of a group called Veterans Affairs Services. BBB Military Line, a complaint resource specialized for the military and their families, has received several inquiries about the email.”
…
“The BBB advises anyone who receives this email to not click on the link. You should never click on links in emails that are from unknown sources as they may contain viruses. Such viruses are typically designed to steal private information from your computer. Also, the VA advises veterans seeking the assistance of a VA-recognized service organization for purposes of submitting a claim for VA benefits to search at the General Counsel’s accreditation search page.”

Author’s Note: The Link referred to by the BBB has been omitted from this article and the only link in the example email is to the home page of VAS.

VAS describes themselves as a ‘non-profit veterans service organization’ but they are not recognized as a chartered or non-chartered VSO. Check the full list of VSOs here. They are, however, registered as a charitable 501(c)(3) organization. MOAA has not had any formal dealings with VAS so we can not comment on their dealings with veterans or their legitimacy. The VAS shield can conceivably be seen as a ‘close resemblance’ of the VA’s, so the email is on base with that statement, as you can see here:

Compared to the seal of the VA:

However, the VAS site does contain the following language in their web wrapper:


While the email is not what it purports to be, the message lends itself to a much bigger issue of the exploitation of veterans using survivor benefits as a hook by financial services companies to get their business. It is a growing problem, and one that MOAA is paying close attention to, especially the tactics being used. Speaking with Lt Col. Shane Ostrom, USAF (Ret.), MOAA’s Deputy Director of Benefits Information, he stated:

“This marketing plan by financial firms is only getting worse and will continue. I had one MOAA member state they wanted him to start trusts where assets could be hidden appearing to be poor in order to qualify for VA benefits based on financial need. He said the plan was to move his assets into the trust and replace his current assets in the trust with annuities. There would be no reason for this except to generate high commissions for the financial firm.”

Another member of the MOAA benefits team, Mr. Phil Dyer, a CFP, also stressed the dangers of financial firms soliciting via VA survivor programs:

“At a time when major budgetary pressures are coming, these companies – while not advocating outright fraud (mostly) are trying to shoe-horn people into a benefit they might not otherwise qualify for while enriching them in the process and (potentially, depending on the state) dis-inheriting children/grandchildren depending on the annuity beneficiary requirements.”

In other words, be careful who you put your trust in when it comes to financial matters and veterans benefits. This email may be bogus, and VAS has not been implicated in any wrongdoing that we are aware of, but many companies out there have been trying to fleece the veterans community, or at least take advantage of it. The true warning to veterans that should be ringing through the web is the fragility of their earned benefits, from TRICARE and Tricare for Life, to retirement pay and continuing attacks on personnel costs by deficit hawks that have a way of disregarding the concepts of sacrifice and honoring promises. There is a war ahead of us, and we’ll need all hands on deck this next year and beyond to avoid the deep cuts that are being floated by the deficit commissions and congressional members.

Further Reading

MOAA’s Financial Frontlines blog recently ran a story about financial companies exploiting VA survivor benefits and using phone marketing to get their foot in the door. Read the entire story here.

Discussion

Posts are not held for moderation so your comment will appear immediately, but may be modified if it violates our Community Standards.