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ROA Advocates For Registering Females For The Selective Service

Posted By Reserve Officers Association, Tuesday, July 7, 2015
Updated: Friday, May 13, 2016

On June 15, ROA met with Senator Gillibrand’s staffer Ryan Walsh and presented Resolution 13-03 requesting that women be required to register for the Selective Service. ROA argued Selective Service Registration was important for national security and equal treatment. In regards to national security, ROA argued, given that national security risks have been increasing for more than a decade, it is imperative that the country is prepared for any possible national emergency ranging from epidemics to military threats from abroad. Therefore, in an effort to increase the population available to the country, the ROA presented the idea of registering females for the Selective Service.

In ROA’s conversation with Mr. Walsh, one major problem that was considered an impediment to expanding the Selective Service was the “trench mentality” that many have when confronting the Selective Service System. They see the Selective Service as being mainly a reservoir of potential combat troops. This can foster the mistaken impression that women who register for the Selective Service are registering strictly for combat roles. There is a need to change this incorrect perspective about how the Selective Service can be used in a state of national emergency. The Selective Service is not simply for combat positions, but could be used for supplying more medical professionals in epidemics, cyber-security experts as cyber-attacks become increasingly prevalent and other various skills that contribute to the nation’s defense and security.

Including females in the Selective Service System would also bring fairness to the access of certain benefits. Currently, registering for the Selective Service is a requirement for participation in several major federal programs. Males who are eligible for the Selective Service who have not registered cannot receive federal student financial aid nor can they participate in any programs in the Workplace Investment Act, a federal vocational training program. Also, “A man must be registered to be eligible for jobs in the Executive Branch of the Federal government and the U.S. Postal Service.” (http://www.sss.gov/FactSheets/FSbenefits.pdf).

Some state benefits are also predicated on registering with the Selective Service System. Forty states, four territories and the District of Columbia have laws linking renewing one’s driver’s license with registering for the Selective Service. In addition, thirty-four States link access to state student financial aid and being able to hold a state job with registering for the Selective Service.

With so many benefits tied to registering for the Selective Service on both the state and federal level, it imposes an extra requirement on males to access them. Including females in the Selective Service System would ensure the same standards are being applied to both males and females in accessing certain state and federal benefits.

Requiring females to register for the Selective Service also equalizes the basic requirements for national service among males and females, which gives males and females an equal chance of serving their country. This communicates to female service members that their contribution is valued as much as their male counterparts. When a substantial amount of female veterans do not view themselves as veterans, this message is important to counter the idea that female military service is somehow inherently different and less significant than their male counterparts.

Therefore, in order to enhance national security, provide greater equity in regards to benefits access and to help promote the importance of female military service, the ROA supports registering females into Selective Service System.

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ROA Hosts Army Reserve MSO/VSO Forum

Posted By Reserve Officers Association, Tuesday, June 2, 2015
Updated: Friday, May 13, 2016

by Bob Feidler, Army Director

ROA hosted a meeting 28 May with the Office of the Chief of the Army Reserve to discuss issues affecting Reservists and their families.Participants from more than 25 military and veteran service organizations met with senior staff from OCAR.

ROA Executive Director Jeff Phillips provided a summary of his remarks at the first hearing of the Commission on the Future of the Army (CoFA).  Highlights of ROA’s testimony were:

  • Need to define what an operational Reserve truly means;
  • Embracing the Army Total Force Policy
  • Preserving the separate roles, missions, and identities of the Federal Army Reserve and the Army National Guard.
  • Importance of integration among the three compos, especially with the winding down of war and its integratory nature.
  • Specific ROA recommendations included:

  • Encouraging the Army to make better use of the mobilization authority under Title 10 United States Code 12304(b) that provides Army Reservists with expanded training opportunities;
  • Augmenting the Army Reserve in support of Defense Support to Civil Authorities;
  • Increasing leadership opportunities by placing qualified Army Reserve and Guard senior officers in appropriate three- and four-star billets for which they are qualified e.g. G1, G4, or NORTHCOM Commander;
  • Ensuring that senior active component Army leaders have some reasonable experience with the Army Reserve or Guard as they progress in their careers;
  • Urging the commission to identify and consider the relative costs of active component and reserve component units as they considered the appropriate force mix and balance;
  • Revising the standards leading to joint qualification to better enable reserve officers to attain Joint Qualified Officer level III status without having to attend a senior service school in residence;
  • Expanding military educational opportunities for all reservists.
  • Col. George Dukes of OCAR also discussed the Army Commission hearing and Chief of the Reserve’s remarks that echoed the three highlights above. He also urged greater support for full-time support positions to permit the USAR to expand to include special forces and endorsing the Army’s new aviation policy. The CoFA will hold the next hearing at Ft. Bragg, NC, on 9 June 2015. Additional public and private sessions will be held throughout the year. The Commission must report their findings to Congress by 1 February 2016.

    The status of a variety of Reserve related legislative items and other items on The Military Coalition (TMC) agenda was briefed by Larry Madison and John McElligott, who co-chair the TMC Guard-Reserve Committee. The TMC is recognized as an influential military coalition in Washington. ROA is a charter member and continues to be actively involved.

    Command Chief Warrant Officer Phyllis Wilson discussed the current role of warrant officers in the United States Army Reserve. In short, warrant officers are specialists in a variety of fields. They are known for their expertise in aviation, but they also perform vital services in areas ranging from healthcare to intelligence.

    Sgt. Maj. Gary Martz provided a detailed analysis of the current personnel structure of the USAR. For fiscal year 2016, USAR has requested an end strength level of approximately 198,000 serving Reservists – 180,000 in Troop Program Units, 16,000 Active Guard and Reserve and 2600 Individual Mobilization Augmentees. The USAR is able to recruit thousands of new service members from the AC in part as a result of their own end-strength reductions. Pressure on Army Reserve end strength could continue with proposed budget reductions and implementation of sequestration that reduces the budget in future years. Under one scenario end strength could drop to 195,000; and we could see a low of 185,000 under a worst-case scenario if Congress were to enforce sequestration.

    Lt. Col. Alex McCullough gave an update on the Private Public Partnerships program which has been a focal point for the CAR. This program evolved from the Employer Partnership Program begun by the CAR’s predecessor, Lieutenant General Stultz. The current program has extensive outreach aimed at individual soldiers, leaders, and units. More than 6,000 employers have in one way or another signified their support for the USAR. A number of programs are resulting in USAR personnel being employed in excellent positions with civilian companies through this program. A dynamic discussion ensued with a number of the attendees offering support and making suggestions to assist the Private Public Partnership program. 

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    NCO Leadership Makes History

    Posted By Reserve Officers Association, Friday, May 1, 2015
    Updated: Friday, May 13, 2016

    This past weekend, ROA's Department of Florida, made history when it selected Senior Master Sergeant Shane P. Smith & Master Sergeant Marian C. Smith, USAFR to lead the department's Air Force section.

    With Shane serving as Air Force Vice President and Marian selected as the Deputy VP, they become the first Non-Commissioned Officers to occupy leadership posts in the organization's 91 years.

    Since expanding membership eligibility to non-commissioned officers less than a year ago, ROA has welcomed some of the nation's finest young service members to our ranks.

    The leadership of today's NCO corps on the battlefields of Iraq & Afghanistan speaks for itself and now those experiences are shaping the future of ROA's membership.

    Accepting his new post, SMsgt Smith acknowledged the charge set forward by his unprecedented election. "I intend to demonstrate to my fellow enlisted members that they do have a voice in the ROA and encourage them to support and join the organization.  I also hope to be an effective and inspirational representative for the Air Force members in our department."

    One look at the Smith's resumes and its easy to see the embodiment of today's NCOs: at once diverse, independent & adaptive. In announcing his candidacy SMSgt humbily summed up proud career in and out of uniform.

    "As a Citizen Airman, I proudly wear the rank of E-8 and the title of Senior Master Sergeant while performing my duties as a Combat Rescue Loadmaster Evaluator for the 920th Rescue Wing at Patrick Air Force Base, Florida.  I am trained to conduct covert, low-level, insertion, extraction, and airdrop of special operations personnel and equipment and perform tactical helicopter mid-air refueling utilizing night vision devices in combat and peace-time on an HC-130 Combat Rescue King aircraft.  To date, I have flown over 2,500 hours on more than 1,000 sorties, including 56 combat sorties during Operations JOINT ENDEVOUR, SOUTHERN WATCH, ENDURING FREEDOM and IRAQI FREEDOM.

    As a civilian, I currently serve as the Chief Financial Officer for a utility-scale solar developer in Central Florida.  In this position, I spearhead the company’s efforts to be first-to-market to develop, finance and build numerous large utility-scale merchant solar power facilities in the Southeastern US without any impact to the ratepayer or taxpayer. Among the many roles I assume within the company at any given time, I am primarily responsible for leading the project financing activities including but not limited to performing project quantitative analysis, building tax equity monetization structures, leveraged finance models, and drafting deal information memoranda.  I have been awarded a Bachelor of Arts degree in Business Administration from Columbia College and Associates in Applied Science degree from the Community College of the Air Force"

    As for the new deputy VP, Master Sergeant Maria Smith brings a history of advocacy and action to her new position. 

    Sergeant Smith has been an active member in the Top Three, Air Force Sergeants Association and Reserve Enlisted Association.  She has been a club officer of Toastmasters International for seven years, attending district conferences and officiating local area speech contests.  She was awarded her CCAF degree in Logistics Management and a Bachelor’s Degree in Interdisciplinary Studies.

    Sergeant Smith provided direct support for Operations Desert Shield, Desert Storm and Provide Comfort while she was stationed at Incirlik Air Base, Turkey (1990-1991).  She has deployed to Prince Sultan Air Base Saudi Arabia (2000) and Al Jaber Air Base, Kuwait (2002-2003) supporting Operation Enduring Freedom.

    With NCO's like the Smith's taking an active role in the future of our organization ROA is looking forward impacting the lives of service members in more diverse and effective ways than ever.

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    MCRMC Retirement Proposal—More than meets the eye

    Posted By Reserve Officers Association, Thursday, April 30, 2015
    Updated: Friday, May 13, 2016

    Three components that should be considered in judging the MCRMC retirement proposal (MCRMC final report recommendation 1):  20+ years retirement pay, Thrift Savings Pay (TSP), and Survivor Benefit Plan (SBP). 

    20+ Year Retirement Pay:  The MCRMC retirement proposal reduces the annuity from 2.5 percent to 2.0 percent.  The .5 percent difference is then used by the services for the continuation pay lump-sum payment at the 12-year point.  The 0.5 percent is not lost, it is shifted to this lump-sum payment.  (There was a partial lump-sum payment for Guard and Reserve members in the MCRMC recommendation at the 20-year point, but it was not supported by the House Armed Services Committee; ROA will continue to get this provision included.)

    TSP:  The MCRMC retirement proposal is a defined-contribution proposal consisting of a 20+ year retirement pay and a TSP with contributions by the servicemember of up to 17 percent and contributions by the government of up to 6 percent. 

    SBP:  A third retirement factor to consider is the Survivor Benefit Plan.  SBP is an option; when the beneficiary dies, SBP payments die too.  TSP, however is similar to a 401K; it lives on; its principal and any interest continues as part of the estate, and can be willed, unlike SBP. In essence, the SBP funds the servicemember would pay to the government for them to control could now be the servicemember’s to control and manage as a TSP (if so chosen), in funds with matching contributions.

    TSP/SBP Comparison

    TSP

  • Can be willed to spouse and other heirs.
  • Does have the opportunity to increase in value.
  • No funds are lost if the spouse dies before the servicemember.
  • May continue to grow (market-generated growth) even without contributions.
  • Up to 6% matching funds.  The government pays you money.
  • SBP

  • Stops when your beneficiary dies.
  • Does not earn any interest or have the opportunity to grow.
  • Payments will not be repaid if beneficiary dies before the servicemember.
  • If you cancel SBP you will not get a refund.
  • Premium of 6.5% to 10% is a cost.  You pay the government money.
  • SBP Costs (Premiums)
    http://militarypay.defense.gov/survivor/sbp/04_cost_spouse.html

    The SBP premiums for spouse coverage are:

    (1) 6.5% of your chosen base amount, or if less,

    (2) 2.5% of the first $635.00 of your elected base amount (referred to hereafter as the "threshold amount"), plus 10% of the remaining base amount.

    The threshold amount was $635.00 as of January 1, 2006. The threshold amount will increase at the same time and by the same percentage as future active duty basic pay.

    If you became a member of a uniformed service on or after March 1, 1990, and you are retiring for length of service (not for disability), SBP costs will be calculated only under the formula in (1) above.

    Susan Lukas
    Director, Legislative and Military Policy
    Reserve Officers Association

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    ROA Testifies With Senate Veterans Affairs Committee

    Posted By Reserve Officers Association, Tuesday, April 28, 2015
    Updated: Friday, May 13, 2016

    Recently Jeff Phillips, ROA Executive Director, testified with the Senate Veterans Affairs Committee (SVAC).

    To explain why SVAC should support proposed legislation for the Reserve Components, Jeff began by recognizing Guard and Reserve contributions, “From north to south, east to west, America’s young men and women for more than two centuries have affirmed the wisdom of our founders in their willingness to engage boldly, selflessly, and with great fidelity in the defense of our way of life. . . The selected reserves contribute more than 820,000 members of our armed forces.  Since 9-11, more than 900,000 members of the Guard and Reserve have been activated for service in this war.  These men and women serve us every day, in remote places, as well as cities in turmoil right here at home.  Each act of service incurs personal risk voluntarily accepted.

    S. 602, G.I. BILL FAIRNESS ACT OF 2015

    ROA wholeheartedly supports this proposal to continue eligibility for the Post-9/11 GI Bill when a member of the reserve component is receiving medical care under Title 10 United States Code (U.S.C.) 12301(h).  Placing reserve component servicememembers on these active duty orders is done for administrative purposes and Guard and Reserve members should not lose eligibility for education benefits.  The change in status from one type of order to 10 United States Code 12301(h) is done to unencumber direct operation support billets.  The change from one type of active duty order to another type of order should not be seen as change to a lesser duty status. 

    S. 681, BLUE WATER NAVY VIETNAM VETERANS ACT OF 2015

    ROA urges Congress to support Blue Water Navy Vietnam Veterans who were exposed to Agent Orange when ships manufactured fresh water by taking sea water, contaminated with Agent Orange off of the coast of Vietnam.  This occurred when the rain washed Agent Orange through water tributaries to the South China Sea.  On board ship, potable water (sea water distilled one time) is used for showers, shaving, cooking, coffee, laundry and dishwashing, which explains how sailors were directly exposed to the contaminated water.  The Department of Defense does not have a toxic exposure policy to identify and study servicemembers who are exposed to toxic chemicals even though exposure to toxins has occurred in every modern war.  A policy that tracks exposure could ultimately reduce health care costs through the collection of verifiable data rather than rely on designation of presumption status through the Department of Veterans Affairs.

    S. 743, Honor America’s Guard-Reserve Retirees Act of 2015

    The proposed bill to recognize a reserve component member as a veteran, but without benefits, is a legislative goal of The Military Coalition (TMC).  The TMC, in a letter to bill sponsors, which ROA supported, stated, “The individuals covered by your legislation have already earned most of the benefits granted to veterans by the Department of Veterans Affairs, and yet they do not have the right to call themselves veterans because their service did not include sufficient duty under Title 10 orders. Because of this they feel dishonored by their government. Your legislation simply authorizes them to be honored as “veterans of the Armed Forces” but prohibits the award of any new benefit.  The ‘Honor America’s Guard-Reserve Retirees Act of 2015’ is a practical way to honor the vital role members of the Reserve Components have had in defending our nation throughout long careers of service and sacrifice. And it can be done at no-cost to the American tax-payer because of your legislation.”

    More ROA Testimony

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    Air Force Reserve Has “Same Standard, Same Qualifications” As USAF

    Posted By Reserve Officers Association, Tuesday, April 28, 2015
    Updated: Friday, May 13, 2016

    General Mark Welsh, Air Force Chief of Staff, was enthusiastic and unequivocal in his praise and support of the Air Force Reserve while speaking at “Defense One,” April 22.  The discussion hit topics from budget woes, recapitalization, and terrorism, to Reserve Component readiness.  He is “excited about the total force” and how the RC maintains readiness and executes its missions as well as anyone in the Active Component.  The Reserves have the “same standard, same qualifications,” he said; and he plans to “grow the Guard and Reserve, put more mission capability” into the RC.

    One capability that can be moved into the Reserves is the remotely piloted aircraft (RPA) mission.  The high demand for operational support of Predator drones is creating a stress on the career field that can be relieved by increasing the number of pilots.  The training pipeline must produce 300 new pilots each year to meet the needs of the Air Force, but currently only produces some 180 pilots a year.  To make matters worse, the AC is losing around 240 RPA pilots each year due to retirements and separations.

    Some officers and NCOs leave active duty and come into the RC.  Former Air Force Reserve Chief Lt. Gen. Charles Stenner, Jr., said in testimony, "Sixty-four percent of Air Force Reserve Airmen have prior military experience – another demonstration of the economic benefit of the Reserve components."

    Thus, adding the RPA mission to the Air Force Reserve is an example of where the stability, experience and longevity of RC members can help stem losses and begin to fill the hole.  Such use of the USAFR would help the Air Force meet mission requirements and save training costs by retaining more service members.

    General Welsh noted Air Force leadership in the cyber mission and how the RC is a perfect place to house much of that mission.  He said the AF is a “service born of tech” and that cyber operations are a natural extension of our air and space mission areas.

    He also believes that the F-35 fighter will not be the last manned platform in the Air Force.  He explained the value of the human brain with its unique ability to process vast amounts of data and to make judgment calls in complex and risky situations that is difficult to do from a desk 3000 miles away.

    When asked about the most under-reported aspect of our USAF, he enthusiastically said, “the USAF is a huge success story made up of great people doing a great job.” He wishes the work airmen do every day could get more attention.

    “Buffalo Bill” Leake,
    ROA Air Force director

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    ROA Developing TRICARE Reserve Choice To Improve RC Healthcare

    Posted By Reserve Officers Association, Monday, April 27, 2015
    Updated: Friday, May 13, 2016

    ROA developing TRICARE Reserve Choice to improve RC healthcare

    Stop me if you have heard this one before.  A Reservist – let’s call her Tech Sgt. Munoz – is deployed for 90 days.  During that time her son’s healthcare is provided by TRICARE, and the Munoz family shifts there from their private-sector health care insurance program.  During the deployment Sergeant Munoz’s son is diagnosed with asthma and gets effective treatment from an excellent doctor.  After the deployment the Munoz family must leave TRICARE and re-enrolls in their private-sector insurance program.  Their new doctor chooses to re-diagnose.  From a different formulary, he uses a less effective prescription. The Munoz family is thrown into crisis. 

    ROA is developing a legislative proposal (“language”) for a new program called “TRICARE Reserve Choice” that would prevent this crisis.

    TRICARE Reserve Choice, with its 25 percent premium cost share, would ensure quality healthcare and – vitally important to many – continuity of care.  (The premium cost share is the cost of being enrolled in the health care program.  There would also be co-payments paid by the Reservist in TRICARE Reserve Choice.) 

    A Reserve Component family covered by TRICARE Reserve Choice could choose from more plans and healthcare providers.  And in the case of the Munoz family, TRICARE Reserve Choice would have made switching between plans and doctors unnecessary.

    A full examination of the costs of a TRICARE Reserve Choice plan hasn’t yet been made.  Such an appraisal may find that efficiencies would be driven by increased plan continuity and better preventative care among reservists who might otherwise not have good access to care.

    ROA regards TRICARE Reserve Choice as the first step in the implementation of a TRICARE Choice program for all components of the military; replacing TRICARE Reserve Select with TRICARE Reserve Choice is an incremental step in the right direction.  TRICARE Reserve Choice would reduce the expense, frustration, and complexity that burdens healthcare for reservists.  By improving continuity and facilitating access, TRICARE Reserve Choice would increase the overall readiness of our armed forces.  

    Reserve Component families would enroll in TRICARE Reserve Choice and continue their medical coverage without interruption, whether they are at their civilian job or performing military duty.  They would have continuity of care.

    TRICARE Reserve Choice would enhance force readiness by ensuring Individual Ready Reserve members have healthcare.  Reservists with time remaining on their enlistment contract are assigned to the IRR.  Including them in TRICARE Reserve Choice would facilitate the medical care needed to be ready.  Reducing the disruptions and expense associated with switching plans could help reduce the overall cost of healthcare.

    ROA supports offering TRICARE Reserve Choice coverage to “gray area” retirees for the sake of continuity as well as readiness. Gray area retirees are assigned to the Standby Reserve Inactive Status List; they are available for service until actual retirement at age 60 and are a national readiness asset.  Many gray area retirees, mostly in their 50s, may have difficulty finding work or for other reasons may not have access to affordable health insurance.  They are eligible for TRICARE Retired Reserve, but pay 100 percent of the cost of the premium.  Replacing that plan with TRICARE Reserve Choice would give them continuity and affordability.  Covering gray area Reserve Component members would be a clear expression of support from the nation these patriots dedicated their lives to serve.

    TRICARE Reserve Choice would enhance national readiness by reducing barriers to quality care, improving continuity of care, and ensuring that Reserve Component members and their families have the healthcare they have earned through service.

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    ROA Supports Retirement Reform To Increase Options

    Posted By Reserve Officers Association, Monday, April 20, 2015
    Updated: Friday, May 13, 2016

    Did you know that under the current military retirement system 83 percent of enlisted servicemembers and 51 percent of officers never receive any retirement funds, unlike their civilian counterparts?  Under the proposed Military Compensation and Retirement Modernization Commission, 100 percent of servicemembers would be eligible for retirement savings.

    The commission’s legislative proposal would establish a Thrift Savings Plan (TSP) with an automatic 1 percent DoD contribution at entry and matching contributions up to 5 percent for all servicemembers.

    The MCRMC “blended” proposal would also allow retiring members of the National Guard and Reserve to receive a portion of their retirement pay after 20 years of service without requiring them to wait to age 60. 

    Here is how the blended retirement proposal works:

    Year 1 – The government contributes 1 percent of basic pay into a Thrift Savings Plan upon service entry date, and servicemembers are automatically enrolled to contribute 3 percent of their basic pay to the TSP (servicemembers can also to opt out of their TSP participation and end their contribution).

    Year 2 – 5 percent of a monthly basic pay contribution will be matched by the government and servicemembers will be vested so they can keep the retirement fund after completion of the second year.

    Year 3-11 – the government will continue to match funds but there are no program changes that occur during this period.

    Year 12 – continuation pay is given to all servicemembers who obligate for an additional 4 years.  The continuation pay amount will be determined by each service secretary to maintain the force profile needed for manpower requirements.

    Year 20 – servicemembers qualify for a military retirement annuity after 20 years of service (YOS) (2% x 20 YOS x pay base).  Based on the servicemember’s contributions this retirement annuity can exceed the amount that would be paid under the current retirement system.  It would also allow retiring members of the National Guard and Reserve to receive a portion of their retirement pay after 20 years of service without requiring them to wait to age 60.    The lump sum payment would be described in regulations addressing the actuarial basis for determining the lump sum amount.

    Year 21 – the servicemember will no longer qualify for a government matching funds.  ROA believes government matching funds should continue for the full amount of military service.

    The commission recommended allowing servicemembers to contribute up to 17 percent of their base pay with a cap on the government contribution of 1 percent plus up to 5 percent matching funds.  Additionally, they believe any servicemember who is in the current retirement system should be able to change to the blended retirement system.

    The MCRMC retirement proposal will help more servicemembers than any other initiative since the World War II GI Bill.

    In conjunction with Recommendation 1, we also support Recommendation 3, which will help servicemembers establish a retirement plan and develop sound financial management skills.  It will help to ensure servicemembers and their families understand and are equipped to engage in sound financial planning for their retirement.

    The Air Force Association, Enlisted Association of the National Guard of the United States, National Guard Association of the United States, Veterans of Foreign Wars of the United States and ROA, representing more than 3 million members, have met with the House and Senate Armed Services Committees to express their support of Recommendation 1 and Recommendation 3.

    Recommendation 1: Help more service members save for retirement earlier in their career, leverage the retention power of the traditional Uniformed Services retirement, and give the Services greater flexibility to retain quality people in demanding career fields by implementing a modernized retirement system.

    Recommendation 3:  Promote Service Members’ Financial Literacy by Implementing a More Robust Financial and Health Benefit Training Program. 

    We believe that these recommendations enhance the current retirement system and will be a valuable recruiting tool for a new generation of warfighters.  Whatever Congress passes should maintain the overall value of the retirement system and should not weaken retention; further, the TSP match should continue throughout a servicemember's career.

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    ROA Opposes Merger Of Military Exchanges And Commissaries; Supports Improving Commissary Efficiencies

    Posted By Reserve Officers Association, Tuesday, April 14, 2015
    Updated: Friday, May 13, 2016

    ROA opposes merger of military exchanges and commissaries; supports improving commissary efficiencies

    Among its fifteen recommendations, the Military Compensation and Retirement Modernization Committee chartered by Congress to suggest ways to modernize the uniformed services’ compensation and retirement system, arrived at a recommendation to merge DoD’s Commissaries and Exchanges under a consolidated “Defense Resale Activity (DeRA).

    ROA opposes the proposed merger of the Exchange system with the Defense Commissary Agency (DeCA) into a new Defense Resale Activity (DeRA) until DeCA makes its operations significantly more efficient, realizing savings in the hundreds of millions of dollars and generating increased revenues from improved practices used routinely in American grocery retail. 

    ROA opposes merger until these improvements are made precisely because the two entities are valued by military families: merger of a dynamic, high-performance non-appropriated fund Exchange with a change-resistant, bureaucratic, tax-supported grocery chain is more likely to destroy the competitiveness (viability) of the former than enhance the performance of the latter. Both must be made as competitive as possible within their revenue models before merger is advisable (private-sector mergers, managed by skilled executive teams, fail as often as they succeed, and these mergers involve companies using the same revenue model). 

    Once efficiencies in the Commissary are made, “back-office” collaboration would yield further efficiencies.  Merger might then be suitable.

    Exchange officials led by a retail veteran CEO increased earnings in a shrinking market (military downsizing) from $272 million in 2011 to $373 million in 2014; they carry some credibility.  Their success raised dividends going from the Exchange to military Morale, Welfare and Recreation activities.  They show that the Commissary can save, without the extraordinary risk and expense of merger, a tremendous amount of money through a mix of highly feasible efficiencies: variable pricing, private labeling, Military Star card acceptance, interpreting rule sets less narrowly, eliminating unnecessary investment in new facilities and technologies, cutting overhead and standardizing compensation (appropriated activities typically offer more aggressive pay than non-appropriated entities). 

    The establishment of any new federal bureaucratic layer should be undertaken with great caution and regard for unintended second- and third-order effects.  Merger, risky in the best of circumstances, will almost certainly stifle competitiveness: will senior leaders in the Defense Resale Agency – who are pitted in the market against directly with skilled retail giants – have decisive experience in the retail jungle? 

    In the unequivocal success of the Exchange we see the effect of the right person at the top.  A pivotal concern is that the wrong skill set will be at the very top of a DeRA: a Defense official with little or no retail expertise. The argument that a DeRA chieftain must understand the “ways of the building” is better suited for the occupant of the number-two job.  An inadequate DeRA leader will produce merely a larger version of the Commissary, competitive only because of its discounts, courtesy of the taxpayer’s generosity. Ultimately, the taxpayer may decide such a benefit is not sustainable, and who then will lose out?  By contrast, the Exchange system, under the direction of a savvy private-sector veteran of retail P&L leadership, has achieved massive efficiencies and improvements.

    The Exchange must not be dragged back by linkage with a lower-performing bureaucratic operation; that would in turn decrease dividends going from the Exchange to military Morale, Welfare and Recreation activities.  Instead the Commissary must undergo tough reform, perhaps led by the Exchange leadership working with new DeCA leadership drawn from grocery successes, such as Giant, H-E-B, Wegmans, Whole Foods, etc.  At that point and only then, some “back office” consolidation between it and the Exchange would perhaps make sense.

    ROA urges Congress to direct the Commissary to achieve efficiencies by reducing capital expenditures and updating the rules they use to conduct business so they are more in line with how other successful grocery corporations for improving service.

    As the Exchange requested of DoD in August 2014, ROA urges DoD  to authorize honorably discharged veterans to shop the Exchanges online (approximately 18 million potential customers), potentially quadrupling the market and significantly increasing funds for Morale, Welfare and Support activities benefitted by Exchange revenues.

    Jeffrey E. Phillips
    ROA Executive Director  

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    ROA Supports Establishment Of Joint Readiness Command

    Posted By Reserve Officers Association, Thursday, April 2, 2015
    Updated: Friday, May 13, 2016

    Among its fifteen recommendations, the Military Compensation and Retirement Modernization Committee chartered by Congress to suggest ways to modernize the uniformed services’ compensation and retirement system, arrived at one recommendation establishing a four-star “joint readiness command.”

    In its views to the Congress on the MCRMC’s recommendations, ROA agrees with establishment of a joint readiness command as proposed by the commission; the JRC would be directed by a uniformed four-star commander, with a commensurate divestiture by DHA of all but the support mission, as determined in coordination with the new JRC.

    Further, ROA recognizes the opportunity created by the establishment of the JRC to ensure RC integration commensurate with its contributions to military medicine.  ROA thus urged Congress – given the reliance of the armed forces on the Reserve Component for medical capabilities, the recognition within the military of the RC’s performance, and the importance of component integration – to ensure that the JRC proportionately allocate billets and training to members of the RC in appropriate specialties. 

    ROA further urged that RC officers and senior noncommissioned officers are assigned to key leadership positions, including the command’s three-star deputy commander role.

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