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INTRODUCTION
Mr. Chairman and distinguished members of the House Armed Services Committee, on behalf of its 75,000 members, the Reserve Officers Association thanks the committee for the invitation and opportunity to submit testimony on military pay and compensation issues.
ROA applauds the ongoing efforts by Congress to address recruiting and retention as evidenced by several provisions included in the FY2006 National Defense Authorization Act (NDAA). Further increase in bonus authorities for Active and Reserve Components were passed as well as an across the board pay raise of 3.1 percent. Thank you for also recognizing that foreign language proficiency is a skill that takes 365-days of a year to maintain.
EXECUTIVE SUMMARY
The Reserve Officers Association CY-2006 Legislative Priorities are:
o Full funding of equipment and training requirements for the National Guard and Reserves.
o Providing adequate resource and authorities to support the current recruiting and retention requirements of the National Guard and Reserves.
Issues supported by the Reserve Officers Association are:
Changes to retention policies:
• Continue support incentives for affiliation, reenlistment, retention and continuation in the Reserve Component (RC).
• Allow RC bonus payments through 20 years of service.
• Permit service beyond the current ROPMA limitations.
• Ensure that new non-prior servicemembers, who are over 40 years of age, are permitted to qualify for non-regular retirement.
• Continue to improve legislation on reducing the RC retirement age.
• Permit mobilized retirees to earn additional retirement points.
Pay and Compensation:
• Seek differential pay for federal employees.
• Remove the 90-point inactive point ceiling for the duration of the Global War on Terrorism and other contingencies.
• Provide professional pay for RC medical professionals.
• Eliminate the 1/30th rule for Aviation Career Incentive Pay, Career Enlisted Flyers Incentive Pay, Diving Special Duty Pay, and Hazardous Duty Incentive Pay.
• Simplify the Reserve duty order system without compromising drill compensation.
• Seek hearings on DFAS debt collect on overpayment to serving members.
Education:
• Include 4-year reenlistment contracts to qualify for MGIB-SR.
• Continue MGIB of Reservists who are involuntarily transferred from pay to non-pay and continue to maintain qualifying years.
Spouse Support:
• Repeal the SBP-Dependency Indemnity Clause (DIC) offset.
Only issues needing additional explanation are included below. Self-explanatory or issues covered by other testimony will not be elaborated upon, but ROA can provide further information if requested.
PAY AND COMPENSATION DISCUSSION
Cost of a Reserve Component Member: Attention is being focused on the personnel costs of maintaining a military force. The Reserve Component (RC) remains a cost effective means for meeting operational requirements. Most pay and benefits are given on a participating basis only. The tooth-to-tail ratio is better in the Guard and Reserve than it is on Active duty. There are savings because the infrastructure and overhead costs are far less in the Reserve Component.
Retirement costs are also typically only one-fourth of an active duty retirement. Health care costs have been improved yet are supported by cost sharing from Reservists with full TRICARE benefits only starting at age 60.
While much has been made of the non-pay benefits provided to military members, the return on investment for a RC member is an offset to the non-pay compensation of RC. The military profits from the civilian employment training and personal experience that is brought into the military from the private sector.
Creative thinking and innovation and have long been a historical contribution by Reservists to the military. Business and management techniques are also an additional benefit. For example, the Pentagon is relying on Reservists to introduce “Lean Six Sigma” into the Department of Defense, which is reducing consultant costs and speeding-up business transformation within DoD.
Effective use of the Guard and Reserve is not simply an issue of idealism. It is also about money and fundamental national policy. The cost of each service’s Reserve Component before mobilization is about five percent of that Service’s budget, making the National Guard and Reserve a way for the country to meet its manpower requirements in times of great need at a fraction of the cost of maintaining a much larger full-time volunteer force.
Efforts to compare day-to-day costs between Active and Reserve members are wasted. Costing is a challenge, annual duration is nebulous, and generated numbers are comparing apples to oranges. It is intuitively obvious that an all-volunteer Active duty force is expensive to maintain, where the Reserve is a budget balancer.
The United States has been able to augment our armed forces with more than a million members of the Guard and Reserve who are capable of conducting combat operations side-by-side with the Active Component in every service.
This augmentation has bought the Pentagon time to implement a transformation and rebalancing of the Active Duty Force. With a capable Reserve Component when the Global War on Terrorism (GWOT) began, the U.S. was also able to continue fielding an all-volunteer force which was intended to provide national security as a peacetime, inter-war force.
In the GWOT, we are fighting the first truly sustained conflict with our all volunteer force, and we are doing so without recourse to a draft because of the 500,000 men and women of the National Guard and Reserves who have surged to the battle front to augment and reinforce our active forces. Keeping both components of that force together for future service requires a sustained recruiting and retention effort, which requires the appropriate pay and compensation.
PROPOSED LEGISLATION
ROA crafted this year’s testimony to address issues to support recruiting, retention and incentives to encourage mobilization. Consideration has been given to budget concerns and the acknowledgement that there could be non-pay solutions.
Retirement: Four years ago, members in Congress first proposed legislation to lower the retirement age. In the first half of the 109th Congress, the Senate offered this legislation as an amendment to the National Defense Authorization Act, only to have it removed during conference.
Twelve proposals for early retirement were introduced in CY2006. Eight are for early retirement for Reservists at age 55, two were for a tiered reduction of one year for every two years served over 20 years of service, and the last was three months reduction in the retirement age for every 90 days in support of a contingency operations.
ROA recognizes the expense of the Age 55 proposals. This would be an all-inclusive, increase in retirement and health care costs at another 33 percent, and provide little incentive besides patriotism and professionalism to serve beyond 20 years.
The tiered system rewards senior enlisted and officer leadership that are now permitted longer tenure than middle-grade leaders. ROA could support this concept if the current ROMPA limitations for officers (O-3 and above) and higher tenure policy for enlisted (E-5 and above) were changed to permit optional service up to 30 years for serving Reservists without penalty for non-promotion.
Basing earlier retirement on mobilization in support of contingency orders after 9/11 exclude numerous individuals who have supported the GWOT under different types of orders, and others who are providing contributing support that permits Active duty personnel to be deployed. It also overlooks the fact that the Army has been recalling Reservists since 1995, and the Air Force, Navy and Marines since 1997. The National Guard has provided a security force in the Sinai as early as 1994.
1. ROA proposes an early retirement plan that is based on accruement of retirement points. Early retirement should not be based on the type of service, but on the aggregate of duty. It shouldn’t matter if a member’s contributions were paid or non-paid; on inactive duty or active duty for training, special works or for mobilization.
RC members earn one point toward retirement for each Reserve training drill. They can also earn one point for every day of active duty performed. An Active Duty year is measured as 360 points.
As the average Reservist retires with 24 years, ROA modeled a retirement base on that number of years of service. In addition, an assumption was made that a Reserve Component norm would be 4 years of active duty before affiliation in the RC. A matrix was developed using an 85-point year for inactive years. Points equated to 360 points (x) 4 years (+) 85 points (x) 20 years equals 3,140 points (+) 1 year of Active Duty or 3415 points to qualify for earlier retirement at age 59. For every additional year of active duty, the RC member can “buy down” his or her retirement by another year.
As Dr. David S.C. Chu, Under Secretary of Defense for Personnel and Readiness, has sent a 40-year pay chart to Congress for approval, ROA further modified its retirement matrix by multiplying 85 points (x) 40 years with 3,400 points becoming the early retirement threshold. If a non-prior service RC member can complete 40 years of service without any active duty, they deserve an earlier retirement by at least a year. To meet the minimum, a RC member would have served an equivalent of 9.5 years on Active duty.
ROA proposes the following table which delineates ranges for earlier retirement.
Eligible Pts
Retirement Range
Age
60 3,399 or below
59 3,400-3,674
58 3,675-3,949
57 3,950-4,224
56 4,225-4,499
55 4,500 or above
This approach provides the Guard or Reserve members with an element of personal control to determine when they retire and will encourage increased frequency of service and service beyond 20 years. Appendix “A” is the complete matrix proposed by ROA.
2. With changes in the maximum recruitment age, ROA urges Congress to ensure that new non-prior servicemembers, who are over 40 years old, are permitted to qualify for non-regular retirement. This would require a re-evaluation of the mandatory age maximum which is currently set at 60 years for O-6s/E-9s and below. Too often skilled civilians are recruited into the Reserves, only to learn that they don’t have enough time in service to earn a non-regular retirement.
3. An additional problem has arisen for O-4 officers who, after a break in service, have returned to the Reserve Component. After being encouraged to return a number of officers find they are not eligible for non-regular retirement. When reaching 20 years of service they find they have only 15 good federal years. Current policy allows these individuals to have 24 years of commissioned time to earn 20 good federal years.
ROA urges Congress to make changes to allow O-4s with 14 to 15 good federal years to remain in the Reserve until they qualify for non-regular retirement.
4. Because of the nature of GWOT and that it will be “the long war,” the uniformed services are turning to the retired ranks for special skill sets that are in high demand. Under current law, if an individual is recalled for less than two years, no adjustment to pay charts will be made.
ROA encourages Congress to develop pay incentives for both retired active and “gray area” Reservists who return to Active duty to recognize their special service.
Pay and Compensation:
1. Differential Pay for Federal Reservists: The federal government is one of the largest employers of Guard and Reservists. While it asks private employers to support deployed employees and praises employers who pay the differential between civilian and military salaries, the federal government does not have a similar practice. It should be setting the example. Federal pay differential should be viewed as a no cost benefit, as this pay has been budgeted to federal agencies before the individual Guard or Reserve member is recalled. As the pay differential will be less that the budgeted pay, there will be a net savings. Because of this, ROA feels that each federal agency, and not the Department of Defense, should pay this differential.
ROA urges Congress to enact legislation that would require a federal agency to pay the difference between the federal government civilian and military pays of its Reservist-employees who are mobilized.
2. Removal of the 90-point ceiling on inactive points: Guard and Reserve members are serving more inactive duty days than required as the minimum. Many units need added days of support that exceed the authorized levels for paid drill. Senior officers and enlisted are putting in additional administrative time to support Reserve units or active gaining command. Additional requirements exist for professional leadership training that is not accounted for in the regular schedule. During the GWOT, the ceiling limit should be removed from accruing inactive points.
ROA urges Congress to remove the 90-point inactive point ceiling for the duration of the Global War on Terrorism and during other contingencies.
3. Defense Finance and Accounting Service Defaults: Young men and women are returning from the Global War on Terrorism to find their lives in ruin. This is not because of life handicapping wounds or post traumatic stress disorder, but because disbursing mistakes are being made during their deployment. While Reservists are protected under USERRA from civilian creditors, the federal government through DFAS is aggressively pursuing returning service members for reimbursement for errors that appear to have caused overpayment. The consequences of non-payment can affect credit ratings, security clearances, and future employment of these individuals.
Private collection agencies are being hired to hound service members. ROA is concerned that DFAS is turning over confidential information, such as name, address, social security number, and the name of one’s civilian employer to private companies.
ROA feels there is a need for Congressional hearings to examine this recovery procedure and to talk to servicemembers whose lives have been impacted by the collection process.
Education:
1. Montgomery “GI” Bill-Selected Reserve (MGIB-SR): To assist in recruiting efforts for the Marine Corps Reserve and the other uniformed services, ROA urges Congress to reduce the obligation period to qualify for MGIB-SR (Section 1606) from six years in the Selected Reserve to four years in the Selected Reserve plus four years in the Individual Ready Reserve, thereby remaining a mobilization asset for eight years.
2. Extending MGIB-SR eligibility: Because of funding constraints, no Reserve Component member will be guaranteed a full career without some period in a non-pay status. Whether attached to a unit or as an individual mobilization augmentee, this status represents periods of drilling without pay. BRAC realignments are also restructuring the RC force and reducing available paid billets.
Under current law individuals who are no longer in paid billets lose their MGIB-SR benefit. ROA urges Congress to change the law to continue MGIB-SR of Reservists who are involuntarily transferred from pay to non-pay status and continue to maintain qualifying years.
CONCLUSION
ROA reiterates its profound gratitude for the progress in providing parity on pay and compensation between the Active and Reserve Components, yet the sub-committee also understands the difference in service between the two components.
ROA looks forward to working with the personnel sub-committee where we can present solutions to these and other issues, and offers our support in anyway.
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