On Wednesday, March 9, 2016, CNA Resource Analysis hosted a roundtable on "A Department of Defense Financial Education Strategy" in Arlington, VA. This all-day event was very successful and brought together stakeholders from government, academia, and private financial institutions to discuss and share research regarding a range of best practices for both reaching and educating service members. There were close to 50 people in attendance.
The event focused on the recent Military Compensation and Retirement Modernization Commission (MCRMC) recommended changes to the current defined-benefit retirement system that is furnished to service members with 20 or more years of service. The modernized retirement system offers a mix of defined contribution and defined benefit, and vests benefits for servicemembers with as few as two years of service through their Thrift Savings Plan (TSP) accounts. Unlike the defined benefit retirement, TSP investment growth is subject to fluctuations in the stock market and the economy. Riskier investment options could leave some sailors with far less or far more savings than their peers when they retire. For this reason, the 2016 National Defense Authorization Act (NDAA) requires the Department of Defense (DOD) to provide additional financial education on these changes to servicemembers.
DOD’s new blended retirement benefit is currently scheduled to begin in 2018. There must be in place an education strategy to ensure that servicemembers and their families are aware of their compensation and benefits, including any changes made to the military retirement system, and are prepared to make the timely decisions necessary to ensure their personal financial readiness.
To download the conference paper, Improving Financial Literacy: Recommendations from CNA’s Roundtable on Developing a DOD Financial Education Strategy, click here.
- "Using Behavioral Science Insights to Better Serve the American People" by William J. Congdon, Ph.D. and Will Tucker, MPA
- "Financial Readiness" by Sean Grindall, Vice President, Enterprise Advice Group
- "Retirement Choice: Lessons for Future Financial Readiness Training" by Anita Hattiangadi and Robert Shuford, CNA
- "Measurements and Effectiveness of Financial Literacy and Education" by Annamaria Lusardi, Academic Director, Global Financial Literacy Excellence Center, The George Washington School of Business
- "MCRMC Recommendations Overview"