If endorsed by the White House and enacted by Congress, a new blueprint for modernizing military compensation after 11 years of war would reshape many traditional service pays to strive for more efficiency.
The 11th Quadrennial Review of Military Compensation, after two years of study, has produced some wide-ranging recommendations, from replacing combat zone tax exclusions and overhauling weekend drill pay to reforming reserve retirement and slicing by half a reduction in survivor benefits that widows see when they accept VA dependency and indemnity compensation.
The law requires that the Department of Defense report to Congress every four years on the status of military compensation, focusing on key pay challenges that the president deems need review.
President Barack Obama chartered the latest QRMC to study combat zone compensation; reserve components’ pays and benefits; compensation for wounded warriors, caregivers and survivors; and pay for critical career fields. This includes special operations, mental health professionals, linguists and translators, and new skills such as unmanned aerial vehicle operators.
The report proposes that Congress grant broad authority for services to create new incentive pay structures for expanding career fields similar to the pay package of aviators with a combination of monthly stipends to retain these skills and lump sum bonuses to address periodic shortages.
The overall QRMC goal was to find ways to revise elements of compensation to be more effective at sustaining the all-volunteer force, explained Thomas L. Bush, director of the 11th QRMC. The retired Navy captain, who flew combat missions in Vietnam as a flight or radar intercept officer, worked previously as a senior reserve policy official at the Pentagon.
The QRMC concludes that military compensation overall fares well compared with the private sector. The enlisted pay package is at the 90th percentile of civilian peers of similar age and education. Officers, on average, are paid around the 83rd percentile of civilian peers.
The report also concludes that compensation for combat injuries works well to replace what otherwise would be sharp declines in family earnings. Retired and disability pays replace “income losses suffered by nearly all injured service members and their families,” it says. “Among the seriously and very seriously injured, compensation benefits more than offset earnings losses, with both groups experiencing a net gain in household income.” For those “who do experience earnings losses, the loss is small, on average.”
The report is available online at militarypay.defense.gov/ REPORTS/QRMC/.
The QRMC finds survivor benefits comprehensive, particularly given changes enacted in the past decade. Yet the study offers a new approach for addressing a chronic complaint – the SBP-DIC offset.
Survivors of retirees who die of service-related ailments or on active duty or die with 100 percent disability ratings are eligible to draw tax-free Dependency and Indemnity Compensation (DIC) from VA. But their military survivor benefits plan (SBP), must be reduced dollar-for-dollar by monthly DIC. Premiums paid on lost SBP benefits are returned to survivors.
Affected widows have pressed Congress for years to end the SBP-DIC offset. The QRMC proposes a compromise. It notes that SBP premiums, on average, cover just over half of program costs and taxpayers subsidize the other half. So the study proposes that eligible survivors be allowed to keep half of their SBP, or roughly that portion of SBP bought with premiums.
The study proposes replacing the combat zone tax exclusion and the one-size-fits-all IDP with refundable tax credits and multi-tiered danger payments tied more directly to level of risks individuals face.
The QRMC also proposes that drilling members receive the same basic pay and allowances as active duty colleagues, and that the money saved on drill pay be used to enhance reserve retirement.
It proposes replacing reserve retirement at age 60 with a system that would allow annuities, for at least 20 years of qualifying service, to begin on the 30th anniversary of a member first entering the military.To comment, email email@example.com or write to Military Update, P.O. Box 231111, Centreville, VA 20120-1111.