The military’s basic pay table should be redesigned so that service members promoted faster than their peers have a pay advantage that lasts not for a year or two but throughout their careers.
That’s one of the key findings of the Defense Advisory Committee on Military Compensation, a seven-member panel of compensation experts whose final report was released earlier this month.
Replacing the current time-in-service pay table, designed in 1949, with a “time in grade” table would make basic pay a more effective element of military compensation, the committee said. It would become a better tool for drawing into the military “lateral entrants,” that is, people with civilian-acquired skills, as well as members with prior military experience.
The idea of a revised military pay table, along with other sweeping pay recommendations from the committee, has become a starting point for a more thorough and careful examination of military pay being conducted by the Pentagon’s 10th Quadrennial Review of Military Compensation.
The review’s director, retired Air Force Brig. Gen. Jan D. “Denny” Eakle, said in an interview this week that a new time-in-grade pay table has merit. It would “reward people for advancing ahead of their peers” through “a more permanent recognition” of their performance.
It would signal, she said, “that this person has moved ahead of his or her peers, and we’re going to compensate them over the long haul.”
Under the current time-in-service pay table, officers and enlisted members promoted one year ahead of peers enjoy extra basic pay, but only for that year. “After that, the difference vanishes,” Eakle said.
When colleagues reach the same rank, their basic pay will rise to match that of the fast burner. That’s because pay steps in the current table are based on time in service rather than time in a rank or pay grade.
By shifting to a time-in-grade table, the pay advantage from early promotion can more than double. The Defense Advisory Committee on Military Compensation report notes, for example, that an enlistee who advances to E-5 a year ahead of his or her peers, and stays a year ahead with future advancements, will get an extra $22,000 over a 30-year career. But if pay table steps are based on time in grade, that one-year head start will be worth about $45,000 over a 30-year career.
The difference would be even greater for officers. Under the current pay table, an officer promoted to O-4 a year ahead of his or her peers would see a $20,000 difference in basic pay over a full career. With a time-in-grade pay table, the difference would jump to $64,000.
Past pay studies have proposed a time-in-grade pay table, but critics have prevailed, arguing that it can be perceived as inequitable. Promotion rates, after all, can vary based on job specialty and branch of service, and might not be tied to job performance.
The review is studying how the military might switch to a time-in-grade pay table, Eakle said. That includes not only how to structure an equitable table but how to design a “save pay provision” so no current members see their basic pay fall during a shift to time-in-grade pay steps.
The committee estimated the first-year cost of a transitional save-pay provision at $1.1 billion. Eakle cast doubt on that estimate. She said the review will look at whether a revised table is possible without raising budgets.
“We don’t know what (the cost) would be. That’s part of the issue. You would try to do it (so it’s) as cost neutral as possible,” Eakle said.
A revised basic pay table is one of two key recommendations aimed at strengthening the link between military pay and performance. The other initiative calls for an end to the wide disparity in basic allowances for housing between service members with dependents and those without them.
The committee would like to see housing allowances for unmarried service members raised to match the housing allowance paid to married members. Eakle said this idea, like the time-in-grade pay chart proposal, has merit. But it truly comes with a hefty and unavoidable cost: The compensation committee estimated the price at $550 million a year. The review will study this proposal too, Eakle said, but she suggested that the hurdle is more daunting.
Shelia Earle, the Defense Department’s acting principal director for military personnel policy, explained what policy-makers would consider in deciding whether to support such a sharp rise in housing allowances for unmarried members.
The higher cost would have to be weighed against the benefit toward sustaining the all-volunteer force, Earle said.
“Does it buy you better retention? What’s the sort of business-case aspect of making a change of that magnitude? It’s not enough for people to say, ‘It sounds good.’ It has to be a good investment for the nation,” Earle said. “That’s the benchmark we’re going to test it against.”
Eakle said her review panel has no deadline for completing its own, more thorough examination of military compensation, which involves every branch of service and the Joint Staff. Nor is there pressure to adopt any of the compensation committee’s recommendations, including controversial proposals to move the military toward a more flexible retirement plan with early vesting features and government matching of thrift savings plan contributions, she said.
“These are some great new ideas. Great place to start. Things to consider. But certainly only a place to start,” Eakle said.
The compensation committee report can be read online at www.dod.mil/prhome/docs/ dacmc_finalreport.pdf.
To comment, e-mail milupdate@aol.com, write to Military Update, P.O. Box 231111, Centreville, VA, 20120-1111 or go to www.militaryupdate.com.
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