A letter for Gen Sinclair

A possible fictional letter for Brigadier General Jeffery Sinclair, USAR

Date: 21 March 2014

To: Brig Gen Jeffery Sinclair, USAR

From: LT. Gen Howard B. Bromberg USAR, DCS G-1

Subject: Request for Retirement

It is my duty to inform you that at the present time there are no slots available in the USAR for an individual with your grade and qualifications, additionally there currently are no slots available at the next lower grade for and individual with your qualification. Slots might be available within United States Army Reserves and or elements of the Army National Guard, you would have to make inquires to the respective services G-1 element. Based on the current situation this office has no choice but to direct Military Personnel Management Directorate to change your Mandatory Retirement Date to 30 March 2014.

This office expects that you should submit your request for Retirement by no later than close of business 25 March 2014. Your request for Retirement should be forward to this office, rather than Military Personnel Management Directorate. This office expects that your official date of retirement will be 30 April 2014. Based on this expected official retirement date this office anticipates that your terminal leave will commence on or about 1 April 2014.

Outstanding issues at this time concern your final retirement Rank/Grade. Given the results of the Article 32, Article 39, and the results of the subsequent General Courts-Martial proceeding, it is the recommendation of this office to the Chief of Staff USAR, Secretary of the Army, and Secretary of Defense that you be retired at the Rank of Colonel (O-6) with all of the rights and privileges commensurate with that grade and your nearly 29 years of service.

Basically Thank You for Service, now will you just leave quietly and as one old general said "Just Fade Away"

From those wonderful folks who gave us “The Great Recession” comes ..

During my morning cruise of the financial landscape comes a few frighting snippets from the following link

http://blogs.marketwatch.com/encore/2014/03/04/rethinking-the-4-retirement-spending-rule/

in particular the follow two statements found in the article

First:
“Now, J.P. Morgan is entering the fray with an alternative to the 4% rule its own. The good news: You’re likely to be able to withdraw more than 4% of your account’s balance each year. The bad news: The method is fairly complicated to implement, so you will need the help of a financial adviser (which is good news for J.P. Morgan, which employs a network of them.)”

Second:

“The bank’s “Dynamic Withdrawal Strategy” adjusts both withdrawal rates and a portfolio’s investment allocations annually, in response to changes in both the markets and a retiree’s personal circumstances.”

Note the 4% rule is as they said in the movie “Pirates of the Caribbean” quote “more like a Guideline rather than a Rule”.

How nice of those wonderful folks at J.P. Morgan. I am sure that they are all honorable, nice, concerned and carrying individual. I will bet that even their mothers even love them. Unless you are their mother or some how directly related to them I rather suspect that the reciprocal is not the case.

Retirement planning is complicated at best. That said, there are two major complicating factor for which J.P. Morgan or any one else has no control over, or much less an exact answer for.

The first major complicating factor for which J.P. Morgan or any one else has no control over or exact answer for is just how long are you going to live. There is only one entity that know this information, and they are not telling. Now J.P. Morgan can make some educated guesses, but they are really nothing more than guesses, if they are wrong you are the one on the hook, and they are the ones off of the hook.

The second major complicating factor for which J.P. Morgan or any one else has no control over or answer for is just how healthy are you going to be during your yet unknown golden years. J.P. Morgan can make some guesses, but again as before you are the one on the hook, and they are the ones off of the hook.

Of course their method is complicated? To most of us it might also appear to be confusing, after all there is profit in confusion. Of course with their complicated and confusing method you will need a guide, and it just so happens that they have many guides who are versed in this complicated and confusing method (What a deal, I bet you might even get a cup of coffee or a soda.)

J.P. Morgan is in a revenue capture mode (They just keep paying lawyer to clean up their mess, of which no one person or persons is truly responsible for (either criminally or civilly))(In the mean time they got to use the money). They are closing up shop of some of their other more lucrative revenue capture endeavors,(since the government has either outlawed it or has via regulations and oversight made the costs too high, and conversely the profits too low) IE. prop trading or as I like to call it betting against your customers (they would say adding liquidity to the market) (You say mishmash, I say hodgepodge).

So it is only logical that with the current trends in demographics (old people are the fastest growing demographic) that they set up camp in the vast untapped fields of retirement advise and management, with the prospect unlimited and unfettered fees and commissions are just ripe for the fleecing. Lets just face facts old people are easy marks, and the folks at J.P. Morgan are basically just a bunch of college educated suit and tie wearing Grifters. Not to put too fine of a point on it but I suspect that more of them than you would guess would mate with a snake if you held it for them.

Another statement that made in the post that just scares the crap out of me is this little quote:

“The bank’s “Dynamic Withdrawal Strategy” adjusts both withdrawal rates and a portfolio’s investment allocations annually, in response to changes in both the markets and a retiree’s personal circumstances.”

Just what does that mean? Well the article is strangely silent, but I can only infer that at least once a year they (J.P. Morgan) are going to look at your portfolio and to paraphrase Monty Python “Now for something completely different” just rearrange it, and in the process that at the very least will generate new commission for them, and quite possibly incur additional taxes for you. (Truly a Win Win scenario). This feature will also be on top of the management fee (probably based on assets under management) that they are going to charge you annually. (I just love naked, aggressive, and unrestrained capitalism. Don't you?).

Two final points to remember about letting these wolves into you tent. Somewhere deep down inside the agreement that you will have to sign if you want to have all the features and benefits of their world class service.

First is the fact that you will have NO recourse via the courts when you find out that they have truly bent you over the axle and driven you home. No your only recourse will be via the FINRA arbitrations process as sanctioned by the Securities and Exchange Commission. (Their bat, your balls, their field, their concession stands, their parking, their players, their umpires.)

Second somewhere in the tomb of a document/contract you signed was a requirement for you to be forth coming with any and all information that might have a direct bearing on the decisions being made by J.P. Morgan concerning the planning and management of your retirement assets being held for you by J.P. Morgan. I would not be surprised (but you might be) if the document contains explicit methods for you to formally convey this information to J.P. Morgan in a timely fashion, and failure on your part is not a failure on their part (See your on the hook, and they are not on the hook). Your odds are not good, see preceding paragraph.

One more step toward the fungibility of the Employee

International Business Machine, AKA IBM, AKA Big Blue, just announce another step in their program to overhaul their pension program.  Here is the link.  Many years ago they converted from a defined benefit plan to a defined contribution plan.  New employee had no choice it was the defined contribution plan for them.  Retired employees and some soon to retire were allowed to stay in the defined benefit plan.  The rest of IBM employees were converted to the defined contribution plan from the defined benefit.  The amount of each employee defined benefit was calculated buy a disinterested third party hired by IBM (believe that and I will make you a great deal on some sea side property in Kansas) and an appropriate amount (given the growth assumptions) was placed in to the defined contribution plan for each employee.

The defined contribution plan was not that bad, IBM did have a matching contribution to the plan.  That contribution was made at the end of every pay period.  But gosh that is a great deal of money to tie up in an accounts that IBM cannot use, it is all those pesky fiduciary rules and regulations created to conform to ERISA of 1974.

So now IBM has decided that rather than make their matching contribution at the time that the employee makes his contribution, they will hold their contribution back until the end of the year, and make one lump sum yearly contribution.  That way IBM can still use the funds for their own needs.  IBM makes a defined benefit contribution of between 6 and 10 percent for each employee depending on the employee contribution.

With 95,000 employees in the United States, and an average salary in the 80K$ dollar range we are looking at some serious money in the range of 456 Million Dollars.  That is some serious change that the corporation could be using rather than have it tied up in employee retirement accounts.  If the employee turn over rate is near 5 percent, well that nearly 23 Million Dollars that the corporation gets to keep, it is truly good to be the king.

IBM is just recording IOUs for their contribution to each employee and they are put into an account and if the employee is still with company come the time that the lump sum is paid they get it.  The bad news for the employee is that they must still be employed by IBM when the lump sum is paid, otherwise no joy.  IBM is being a true sport to those employees who retire before the date that the lump sum is paid, they will still get IBM contribution, but they are not doing that out of the kindness of their heart, that is the law.

In the spring of this year IBM announce a plan for selected individuals, those close to retirement by the end of 31 December 2013 the option of working 60 percent of their schedule, being paid 70 percent of their rate, but with full benefits with a guarantee of their employment until their retirement date or 31 December 2013 which ever came first.

Given that IBM was “rebalancing its workforce” an IBM spokesman characterized this program as being “rather unique”.  If an employee did not join this program well then they would certainly be subject to resource actions, since according to the same IBM spokesman “IBM will continue to rebalance its skills and resources based on customer needs”.  Which was a nice way of saying you will be leaving sooner rather than later.

Another whack job by those lovable bastards that are drawing the big bucks enjoy, and making the hard decisions.

General Ward will have to wait until after the election

The Department of Defense is strangely silence on General Ward.  Well it appears that General Ward will have to wait until after the election.  Which might be good news for the General.

If the General is let off easy (allowed to retire either as a General, or possibly as a Lieutenant General) and it is announced before the election it would be fodder for the Republicans, the Department of Defense under the Democrats are soft on suspected/reported/investigated official corruption.

If the General is not left off easy and it is announced before the election it would again be fodder for the Republicans, the Department of Defense under the Democrats selection process for Flag Officers has some issues.

At this time Brig General Jeffery A. Sinclair is setting at Fort Bragg, where he is accused of and is being investigated for allegations of sexual misconduct, adultery and other offenses over inappropriate relationships with several women under his command.