Here’s a link to this article that summarizes the efforts to reform the Military Health System:
I’ve never seen this publication before, but it updates you on the latest uniform changes and clarifies a lot of NWU Type III questions:
In this edition:
- NAVADMIN 282/19
- Gold Star/Next of Kin Lapel Button
- Black Neck Gaiter Optional Wear
- Optional PRT Swimwear
- Acoustic Technician CWO Insignia
- Uniform Initiatives
- NWU Type III: Know Your Uniform
- Frequently Asked Questions
- ‘Tis the Season: Authorized Outerwear – Myth Busted: Navy-issued Safety Boots
- NWU Type III Fit Guide
- New Uniform Mandatory Wear Dates
Here are this week’s favorites:
Here are the rest of this week’s articles:
Throwback Thursday Classic Post – What is a “Don’t Pick Me” Promotion Board Letter? Why Would You Send One?
If you go to the Navy Active Duty Officer Promotions Page, you’ll find this at the bottom:
Removing the introductory portion, here is what the meat of this letter says:
1. Per reference (a), please remove my record from consideration by the FY-2X Active Duty (Grade) (Competitive Category) Selection Board.
That’s it. All it says to the promotion board is, “Don’t pick me.”
Why would or should a physician send a letter requesting NOT to be considered by a promotion board? Here are a few reasons:
- You are an O4 or O5, know that you are resigning, and that you will not be joining the Reserves – If you are just paying your time back and getting out, do your fellow officer a favor and remove yourself from consideration. It is hard enough to promote to O5 and O6 nowadays. Having one less person to compete with helps out those who are willing to stick around. Yes, if you are picked and get promoted soon enough you could get some extra pay for a little while before you resign, but I’d say the general karma of letting someone else get the promotion outweighs that small financial benefit.
- You are an O4 or O5 who is retiring but you know that if selected for promotion you won’t accept it – Why would someone not accept a promotion? Because a promotion to O5 or O6 obligates you for 3 more years if you intend to retire. And the Navy still isn’t letting anyone get out early. If you want to get out as fast as possible with a 20 year retirement, taking a promotion to O6 in year 18 means you must stick around until year 21 at least.
Why is a “Don’t Pick Me” letter not applicable if you’re an O3? Because for physicians the promotion opportunity is “all fully qualified” or 100% for O4. In other words, if everyone in zone was fully qualified they could promote every physician who is a LT to LCDR. They generally don’t, but they could. You taking a promotion doesn’t really hinder someone else’s promotion like it does for O5 and O6.
So…if #1 or #2 above are applicable, consider sending a “Don’t Pick Me” letter. And remember, they are now due 10 days before a board convenes (not 24 hours like before).
Now that the Blended Retirement System (BRS) is in full effect, it is time to start digging a little deeper on some of its features, like the lump sum payment. Here is a pocket card put out by the DoD Office of Financial Readiness to explain the lump sum feature of the BRS:
Reading through the card, I think it does the best job I’ve seen so far at explaining how the lump sum option works, especially for those who don’t understand what discounting is:
Discounting is the process of determining the present value of a payment or a stream of payments that is to be received in the future. Given the time value of money, a dollar is worth more today than it would be worth tomorrow. Discounting is the primary factor used in pricing a stream of tomorrow’s cash flows.
When discounting future cash flows to determine the present value, you have to use what is very much like a reverse interest rate, called the discount rate:
The discount rate also refers to the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.
The higher the discount rate, the lower the present value of your future cash flows and the smaller your lump sum would be. Some have criticized the DoD for setting the discount rate too high. While adjusted annually, it is 6.75% for 2020.
What I really found interesting about this pocket card I had found, and what caused me to write this blog post, was this part of it:
Note that the DoD Office of Financial Readiness is admitting, “For most Service members, a guaranteed stream of income for life is likely better than a lump sum.”
Yes! One of my biggest beefs against the BRS is that it gives you options like this and the chance to make a mistake. You can’t screw up the guaranteed stream of inflation-adjusted income that comes with the legacy retirement system.
You can screw up a lump sum, reduced by a high discount rate, by blowing it on an expensive car, too large of a house, a weekend in Vegas, or whatever else people like to waste money on. Yes, you could use it productively, perhaps to start a business, buy a franchise, or acquire high-paying skills with further education. But you could just as easily buy one of these:
Do yourself a favor. If you are in the BRS, when the time comes think long and hard before you reduce your future income streams and take a lump sum payment. As the DoD itself admits, “For most Service members, a guaranteed stream of income for life is likely better than a lump sum.”
Here is a screencast/podcast of this updated lecture as well as the PDF of the slides I used: