EANGUS testified before the Military Compensation and Retirement Modernization Commission (MCRMC) today in Arlington, Virginia.
The MCRMC was established by the Fiscal Year 2013 National Defense Authorization Act and is tasked to review the military compensation and retirement programs and make recommendations for their modernization to the President and Congress in early 2014.
According to the MCRMC “the goal of the commission’s recommendations will be to ensure the long-term health of the All-Volunteer Force, provide for a high quality-of-life for the members of the uniformed forces and their families, and to make sure that the compensation and retirement programs are financially sustainable.”
During today’s testimony, EANGUS Executive Director Al Garver, gave a two-minute opening statement and submitted a detailed recommendation memo to the MCRMC. Following his statement, Garver and two other witnesses from TREA and NCOA were questioned by six commissioners for nearly two hours. Testimony and written submissions to the commission are as follows:
OFFICIAL TESTIMONY:
Chairman Maldon, distinguished members of the commission, thank you for providing the opportunity to testify today. I’m Al Garver, Executive Director of EANGUS, which speaks for 412,000 enlisted soldiers and airmen who currently serve in America’s National Guard. They represent 48% of all troops in the seven reserve components, and 18% of the total force. We are pleased to lend our voice—and our recommendations—to this important commission.
Since 9-11, the operations tempo of the National Guard and Reserves has surged and been maintained at levels never envisioned in any strategic planning by the active services. After 12 years, recruiting and retention rates remain high, and every current member of the Guard and Reserve has either enlisted or reenlisted since 9-11, even though these troops know they will likely deploy. While this proves the cost-effectiveness and viability of utilizing citizen soldiers and airmen as an operational reserve, we are still compensating them under the old strategic reserve model. We have submitted a comprehensive white paper that makes four primary recommendations for consideration:
- The first is to reduce the retirement annuity age from age 60 to age 57 for traditional Guard and Reserve members who complete at least 30 years of service. This recommendation was made by the 2008 Commission on the National Guard and Reserves, but was never implemented.
- The second is to exempt Guard and Reserve dual-status military technicians from future furloughs of DoD civilian employees, and to allow them to utilize Tricare Reserve Select benefits, rather than their mandated—and more expensive—FEHB benefits.
- The third is to consider a 50% subsidy for “gray area” retirees to utilize Tricare Retired Reserve.
- The fourth is to create mid-range premiums for the Tricare Reserve Select program. We believe these four fixes, all of which can be implemented fairly quickly and easily, would send a tremendous message to serving Guard and Reserve members that their commitment to service has not gone unnoticed. We stand ready to answer any questions.
WRITTEN RECOMMENDATIONS TO THE MCMRC:
FROM: Enlisted Association of the National Guard of the United States
TO: Military Compensation and Retirement Modernization Commission
DATE: November 13, 2013
SUBJECT: Recommendations for Changes in Guard and Reserve Compensation
BACKGROUND: Since 9-11, the operations tempo of the National Guard has surged to—and been maintained at—levels that were never envisioned in any previous strategic planning by the active services; more than 478,000 individual Guard deployments to date, plus another 407,000 from the Reserves. After 12 years, recruiting and retention rates remain high, even though those troops know they will likely deploy. While this proves the cost-effectiveness and viability of utilizing citizen soldiers and airmen as an operational reserve, they are still being compensated under the old strategic reserve model.
There are three primary reports that EANGUS believes would be of primary relevance to this commission:
2008 Commission on the National Guard and Reserves. This commission essentially recognized the transition from strategic to operational reserve and sought to develop recommendations that would enhance the total force construct. The final report, issued in January 2008, was entitled, “Transforming the National Guard and Reserves into a 21st Century Operational Force.” It included six major conclusions, 95 recommendations, and was supported by 163 findings. It is estimated that 88 of the 95 recommendations have been implemented since 2008; the most notable of which was the placement of the Chief of the National Guard Bureau on the Joint Chiefs of Staff.
11th Quadrennial Review of Military Compensation: This 292-page report, issued in June of 2012, clearly noted and lauded the transformation of the Guard and Reserves into an operational reserve force, but focused primarily on determining a single compensation and retirement system that could be utilized as an integrated system across the total force. While it advocated a retirement annuity for Guard and Reserve members who served for 30 years (as early as age 47), it was predicated on eliminating the current system of pay and retirement points for four 4-hour IDT periods per day for Guard and Reserve drill periods. Instead of paying “double” pro-rated basic pay and 2 retirement points per day, the report recommended paying regular pro-rated basic pay (plus pro-rated BAH and rations) and 1 retirement point per day. The intent was to make up for the decrease in pay by increasing targeted incentives and to reimburse some travel expenses, but both of those recommendations were proposed as discretionary spending. As such, key Guard and Reserve Veterans Service Organizations (including EANGUS) and members of Congress were quick to denounce this proposed construct. At the local and unit level, the move was seen as an attempt to “cut our drill pay in half!” The political backlash was swift and severe, and OSD effectively tabled the recommendations.
2013 Reserve Forces Policy Board Report: This 82-page report, submitted in January 2013, is a potential game-changer for future construction and utilization of the total force. Entitled, “Eliminating Major Gaps in DoD Data on the Fully-Burdened and Life-Cycle Cost of Military Personnel: Cost Elements Should be Mandated by Policy,” the most enlightening page shows that Reserve Component compensation costs are 1/3 that of active duty counterparts ($384,622 per year for active duty and $123,351 for RC). EANGUS believes if this report had come out one year prior to the 11th QRMC, the assumptions would have been radically altered in favor of keeping reserve component compensation essentially the same.
RECOMMENDATIONS: After a thorough review of these three reports, EANGUS believes that the current reserve compensation system is fair and consistently applied. We do not believe it is necessary to develop a system to align into an integrated system with active duty. Reserve component members cost less, not only because 80% are traditional (part-time), but because of the “gray-area” retirees which are not burdening DoD with healthcare or retirement costs. The so-called “double pay” and “double points” for drills is a red herring, since that system was built as a compensation hedge for the largely rural population of citizen soldiers, the vast majority of which travel more than 50 miles one-way to attend drills (over 100,000 National Guard troops travel more than 150 miles one-way to perform their drills).
As such, there are four primary areas where small targeted changes to the system would have a significant impact on future recruiting and retention of an all-volunteer force:
Reduce the retirement annuity age from age 60 to age 57 for traditional Guard and Reserve members who complete at least 30 years of service. This recommendation was made by the 2008 Commission on the National Guard and Reserve, but was never implemented. Since AGR retirements and annuity start dates parallel those of active duty counterparts, the primary change in retirement systems needs to focus on the part-time citizen soldiers. While recruiting and retention has remained strong since 9-11, it would be dangerous to presume that the commitment of these patriots will continue indefinitely. Reducing the retirement annuity age to 57 will affect less than 5% of total RC members, but will create a resounding morale boost among senior enlisted personnel who have committed to serve 30+ years. Furthermore, this change would increase recruiting and retention into the reserve components of active duty forces caught in draw-downs that cannot complete 20 years on active duty.
Recognize the unique role of dual-status military technicians by exempting them from furloughs and allowing them to opt for Tricare Reserve Select as their healthcare. During the FY-2013 furloughs relating to sequestration cuts, DoD refused to recognize that dual-status military technician were/are “uniformed personnel,” and should have been exempted from furlough. Furthermore, the law should be amended to allow these 70,000 technicians to opt to utilize Tricare Reserve Select as their healthcare plan, rather than their mandated FEHB benefits. Not only would this change be more cost-effective by CBO scoring, but it would relieve unnecessary stress on technicians and their families who have to convert from FEHB to Tricare when they deploy, then back to FEHB after they return. The disruptions caused are the single greatest current concern relating to National Guard enlisted personnel.
Provide a 50% subsidy for “gray area” retirees to utilize Tricare Retired Reserve as their primary healthcare. Currently, with no subsidy, there are very few (traditional) reserve component retirees utilizing TRR, and those few are shouldering 100% of their policy costs. The premium and out-of-pocket costs of the current system is largely of no value to the vast majority who qualify for it. Even with a 50% subsidy, a majority would likely not utilize the offering, but it would serve to recognize the contributions of RC members since 9-11.
Create mid-range premiums for the Tricare Reserve Select program. The 2014 single rate for a TRS policy will be $51.68 per month and the family rate will be $204.29. There are a significant number of RC members who are married with no children (including those with adult children who have moved away), or single parents with one or two children. An example would be TRS individual rate “Plus-One” for $100 per month or TRS individual rate “Plus-Two” for $150 per month.
ADDITIONAL RESEARCH NOTES: The reference to the age 57 retirement annuity recommendation can be found in Recommendation #28, identified on page 174 of the final report. It states: Congress should set the age for receipt of a military retirement annuity at 62 for service members who serve for at least 10 years, 60 for members who serve for at least 20 years, and 57 for members who serve at least 30 years. EANGUS believes this recommendation has languished in OSD as a result of the first two portions of the three-part recommendation serving as a “poison pill.” Creating a new system to recognize 10 years of service to provide an annuity at age 62 would be a monumental and unreasonable task. The second point is moot, since those with 20 “good” years of service already qualify for an annuity at age 60. The third component, reducing the annuity age to 57 for those serving 30 years or more, is easily achievable and affects a very small percentage of RC troops. EANGUS believes two qualifiers should accompany this change:
- It should be defined as 30 “good” years of service.
- It should still allow recognition of the currently allowed reduction in annuity age recognizing 90-day terms of service in support of worldwide contingency operations since January of 2008 (the 12301-D provision).
