The Military Compensation and Retirement Modernization Commission released its annual report today to “modernize the Uniformed Services’ compensation and retirement system.” The committee believes the following recommendations will help to maintain the all-volunteer force specifically through compensation, retirement and benefits modernization issues.
A hopeful point in the report said, “Our military pay and retirement recommendations grandfather the retirement pay of existing retirees and those currently in the force. They also maintain the majority of the existing retirement structure, which is an important retention tool, while allowing members of a younger, more mobile work force to begin investing in their own future.”
The following suggestions — at this point only suggestions — await debate and passage by the House and Senate:
Pay and retirement recommendations
- Recommendation 1: Help more service members save for retirement earlier in their careers, leverage the retention power of 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 2: Provide more options for service members to protect their pay for their survivors by offering new Survivor Benefit Plan coverage without Dependency and Indemnity Compensation offset
- Recommendation 3: Promote service members’ financial literacy by implementing a more robust financial and health benefit training program
- Recommendation 4: Increase efficiency within the Reserve Component by consolidating 30 Reserve Component duty statuses into 6 broader statuses
- Recommendation 5: Ensure service members receive the best possible combat casualty care by creating a joint readiness command, new standards for essential medical capabilities, and innovative tools to attract readiness-related medical cases to military hospitals
- Recommendation 6: Increase access, choice, and value of health care for active-duty Family members, Reserve Component members, and retirees by allowing beneficiaries to choose from a selection of commercial insurance plans offered through a Department of Defense health benefit program
- Recommendation 7: Improve support for service members’ dependents with special needs by aligning services offered under the Extended Care Health Option to those of state Medicaid waiver programs
- Recommendation 8: Improve collaboration between the Departments of Defense and Veterans Affairs by enforcing coordination on electronic medical records, a uniform formulary for transitioning Service members, common services, and reimbursements
Quality of life
- Recommendation 9: Protect both access to and savings at Department of Defense commissaries and exchanges by consolidating these activities into a single defense resale organization
- Recommendation 10: Improve access to child care on military installations by ensuring the Department of Defense has the information and budgeting tools to provide child care within 90 days of need
- Recommendation 11: Safeguard education benefits for service members by reducing redundancy and ensuring the fiscal sustainability of education programs
- Recommendation 12: Better prepare service members for transition to civilian life by expanding education and granting states more flexibility to administer the Jobs for
Veterans State Grants Program
- Recommendation 13: Ensure service members receive financial assistance to cover nutritional needs by providing them cost-effective supplemental benefits
- Recommendation 14: Expand Space-Available travel to more dependents of service members by allowing travel by dependents of service members deployed for 30 days or more
- Recommendation 15: Measure how the challenges of military life affect children’s school work by implementing a national military dependent student identifier
The Military Compensation and Retirement Modernization Commission released its official report Jan. 29, recommending several changes to current benefits. This nine-person commission, appointed by the president and majority and minority leadership of both levels of Congress, was established by the 2013 National Defense Authorization Act to do a full review of all pay and benefits for service members, veterans and retirees to maintain an “all-volunteer force.”
The recommendations from the report came from the insight of more than 1.5 million people, including service members, veterans, retirees and their Families. The commission also worked with more than 30 military and veteran service organizations and received input from research institutions, private firms and not-for profit organizations.
The results are a combination of good news and bad news for service members and their Families. Some good news includes support for the current basic pay table and numerous allowances (Basic Allowance for Housing, Basic Allowance for Subsistence, etc.), suggesting that the current system is “an appropriate compromise” for service members. Some of the bad news includes a significant overhaul to the current TRICARE health care system, but offering a lot of choices for Families.
Here is a list of the recommendations and how they may be implemented:
Pay and retirement recommendations
Recommendation 1: Help more service members save for retirement earlier in their careers, leverage the retention power of traditional retirement, and give the services greater flexibility to retain quality people in demanding career fields
The current retirement system does not provide retirement savings to an overwhelming majority of service members. Under the current system, 83 percent of enlisted service members will never benefit from the traditional 20-year retirement plan, as they don’t stay in service for that time frame.
The suggestion: Those currently service will be grandfathered into the current plans. For those who come in later, there is a need to restructure the current system to provide retirement benefits to all service members regardless of their time in service with a modern 401(k)-type plan, with retention benefits of the current retirement annuity, lump sum career continuation pay, and retention bonuses paid at important career milestones in the lives of service members. This system would sustain and potentially improve retention and increase lifetime earnings of retirees.
Recommendation 2: Provide more options for service members to protect their pay for their survivors
The Survivor Benefit Plan is a low cost way to provide lifetime benefits to retirees’ survivors, but the Commission received complaints about the SBP because of an associated offset from VA Dependency and Indemnity Compensation.
The suggestion: A new SBP should be implemented where service members would fully fund the SBP costs, but would no longer be subject to the DIC offset. The current SBP program with the DIC offset should be maintained for service members who want to retain lower-cost coverage.
Recommendation 3: Promote service members’ financial literacy
The Commission discovered that with a lack of choice in current pay and benefits programs, service members lack sufficient knowledge of finances. The 2013 Blue Star Families Annual Lifestyle Survey found that only 12 percent of service member respondents indicated they received financial information from their command or installation.
The suggestion: The Department of Defense should increase the frequency and strengthen the content of financial literacy training. This is especially important because the commission’s recommendations for retirement and health care will require financial decision-making on the service members’ parts. Additional financial education could help protect service members from predatory lenders and other financial manipulators.
Recommendation 4: Increase efficiency within the Reserve Component status system
The commission believes that the current Reserve Component system “is complex, aligns poorly to current training and mission support requirements, fosters inconsistencies in compensation and complicates rather than support effective budgeting.” The current system can cause pay and benefit disruptions as service members transition to different duty statuses.
The suggestion: Streamline the current 30 statuses to just 6 for simpler transition.
Recommendation 5: Ensure service members receive the best possible combat casualty care
Through the two wars in Iraq and Afghanistan, the medical system grew and evolved to provide the best quality combat care. Evidence shows it may be difficult to sustain these combat medical capabilities with the typical mix of cases seen in the military health care system during peacetime.
The suggestion: The military should seek to enhance dedicated oversight of medical readiness through the creation of a joint medical component within a newly established joint readiness command. The commission believes that Congress and the DoD should define essential medical capabilities and continue to support a training platform for medical personnel.
Recommendation 6: Increase access, choice, and value of health care for active-duty Family members, Reserve Component members, and retirees. The commission believes that TRICARE limits access to care by confining beneficiaries to a lengthy and frustrating process for specialty care and weak networks of civilian health care providers.
The suggestion: Active-duty service members should continue to receive their primary care through Military Treatment Facilities. Congress should replace the current health care program with a new system that offers beneficiaries selection of commercial insurance plans. The costs of these plans would be offset for active-duty families with a new Basic Allowance for Health Care as well as a fund to lessen the burden of chronic and catastrophic conditions to cover unexpected medical bills.
Mobilized Reserve component members would also receive BAHC to cover the costs of a plan from the new system. All reserve component members would be eligible to purchase a plan from the DoD program at varying costs.
Non-Medicare-eligible retirees should continue to have full access to the military health benefit program at cost contributions that gradually increase over the years, but remain over the average Federal civilian employee cost share. Medicare-eligible retirees should continue to have access to the current TRICARE for Life program to supplement Medicare benefits.
The TRICARE Dental Program and the TRICARE Retiree Dental Program should remain in place.
Recommendation 7: Improve support for service members’ dependents with special needs
Service members often lose access to state-based programs when they move between duty stations because of long wait lists in some states.
The suggestion: Benefits offered through the military’s Extended Care Health Option program should be expanded to include services provided through state Medicaid waiver programs.
Recommendation 8: Improve collaboration between the Departments of Defense and Veterans Affairs
DoD and VA provide resources to ensure that service members and veterans receive the best health care, but there have been some issues with the transfer of information for effective care.
The suggestion: The current DoD-VA committee should be strengthened with additional authorities and responsibilities to standardize and enforce collaboration between the organizations to provide better care by enforcing coordination on electronic medical records, a uniform formulary for transitioning Service members, common services, and reimbursements.
Quality of life
Recommendation 9: Protect both access to and savings at Department of Defense commissaries and exchanges
The commission believes the commissaries and exchanges provide great benefits to service members and should be maintained. More than 90 percent of active-duty service members use commissaries and exchanges.
The suggestion: The commissaries and exchanges perform similar missions for similar patrons with similar staff using similar processes. The commission believes they should be consolidated to provide better for service members and their Families.
Recommendation 10: Improve access to child care on military installations
The commission found that the demand for military child care often exceeds availability, resulting in more than 11,000 children on waiting lists as of September 2014.
The suggestion: Congress should reestablish the authority to use operating funds for construction projects up to $15 million for expanding or modifying child development program facilities serving children up to 12 years old. The commission also recommended that the DoD should streamline child care personnel policies to help ensure proper staffing levels and update job descriptions to reduce staff turnover.
Recommendation 11: Safeguard education benefits for service members The commission found that there are currently duplicate and inefficient education benefits that should be either eliminated or streamlined to improve the sustainability of these benefits.
The suggestion: The Montgomery GI Bill Active Duty and Reserve Education Assistance Program should be sunset in favor of the Post-9/11 GI Bill. Service members who reach 10 years of service and commit to another two years should be allowed to transfer their Post-9/11 GI Bill to dependents. The housing stipend of the Post-9/11 GI Bill should be sunset for dependents (beginning in July 2017), as should unemployment compensation for anyone receiving a housing stipend.
Recommendation 12: Better prepare service members for transition to civilian life
Unemployment is still a challenge for veterans ages 18-24, who had higher unemployment rates in 2013 (21.4 percent) than non-veterans of the same age group (14.3 percent).
The suggestion: DoD should require mandatory participation in the Transition GPS education track. The Department of Labor should permit state departments of labor to work directly with the state VA offices to coordinate administration of the Jobs for Veterans State Grant program. Congress should require One-Stop Career Center employees to attend the GPS classes to develop a personal connection between transitioning veterans and the career centers.
Recommendation 13: Ensure service members receive financial assistance to cover nutritional
The commission recognized that some service members will continue to need financial help to purchase food for their families. The Family Subsistence Supplemental Allowance (SNAP), better known as food stamps, is available to service members in the United States. The Family Subsistence Supplemental Allowance, the military’s alternative to SNAP, is currently a second option, but served only 285 service members in fiscal year 2013.
The suggestion: FSSA should be retained for service members in overseas locations where SNAP is unavailable, but should be sunset in the U.S. where SNAP is available.
Recommendation 14: Expand Space-Available travel to more dependents of service members
Dependents of service members who are deployed or more than 120 days can currently fly unaccompanied on military aircraft when there is space available; however, shorter deployments are becoming routine.
The suggestion: Dependents should be able to access Space-Available flights for deployments of 30 days or longer.
Recommendation 15: Measure how the challenges of military life affect children’s school work
Children of active-duty service members are not being identified separately in student performance reporting. Military children often experience unique stresses associated with deployments and frequent moves, which can adversely affect their academic performance.
The suggestion: Implement a military dependent student identifier through the Elementary and Secondary Education Act. This would provide consistent reporting on the academic performance of military dependents and identify any required support to meet their needs.