This is a short sighted plan IMPO. As others have stated they are not thinking about what will motivate the member to stay pass whenever they want to leave.
Many in the flying world leave @ the 14 yr point or the 20 yr and a day to become a busdriver in the sky. What usually makes them stay until 20? The dangling of the retirement pay. Anyone who has been a busdriver knows that they don't make a lot those 1st few yrs and if you have a family the retirement pay is how you will survive, if you can take the 401K and live off of it even with the tax implications, which would not be huge due to the low pay, you would be more likely to leave.
Think about it, even currently the economy plays a huge impact regarding retention rate, but in good times many leave without the 401 option and that usually messes with promotion boards, but they had a safety net for planning those numbers. That net was knowing the majority of them who hit the 12-15 yr point would stay for the 50% retirement and they could plan accordingly. Remove that net and every yr personnel will be running around and trying to correct the balance. Throw in the economy like how it drastically changed in 08 and now it is out of control for long term strategic planning.
Remember if the Flags stay or leave it will impact the Field, which will impact the Company and that will impact how many are needed to come out of SA/ROTC/OCS. It is all inter connected.
OBTW, for youngsters in the AF that are rated. There wasn't always 2 flight bonuses, and WSOs didn't always have a bonus. It came around when the economy was great and the 14-20 yr groups were leaving in droves (02). They don't hand out 6 figure bonuses because they like to see the smiles on your faces Oct 1st. every yr. They do it because they need the experienced fliers to stay until at least 20. You know those guys that trained you at UPT, what is their nickname? I think they are called Grey Beards!
Many of them are around because they stayed for that 50% pay when they retire since there is no 401. Not sure how many would if they had 15 yrs of a 401 K maxing out, and one 6 figure bonus they could put away would hang around for the last 5 if there was no financial perk for them to stay. Honestly, would you? Would you do 1 more deployment, 1 or 2 more moves, maybe a remote
probably all 3 because they can (they have you to that 20 yr marker now), leaving your wife and children, missing birthdays, holidays and anniversaries, or would you take that 401 K and BOLT?
I am pretty sure you would take the 401. Bullet and I would have taken the 401 at the 17 yr. marker. without even thinking about it for 1 second. Because we only had the 50% or nothing option dangling over us, we moved again, bought another home which we now have to rent due to the market, forced the kids to attend 2 HS, I gave up my career again, all for us to return to the place we left 3 yrs earlier. Yes, we opted to do that, but the reason why was because his other option would be a 1 yr remote to SKore if we wanted to stay here. Remote with 3 teenagers = IMPO insanity! That 401K option would have meant we could have stayed and financially be better off now since he would have left on Friday in his uniform and returned on Monday in a suit at the exact same pay, plus the 401K intact, with 25 yrs of it growing.
That is why this is totally short sighted, or as we say in the Real Estate world, THEY ARE TOO BUSY JUMPING OVER THE NICKELS TO PICK UP THE PENNIES!