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Panel: Pay, benefits need overhaul now

The military faces a potentially severe personnel and readiness crisis if it does not undertake radical reform of its personnel, pay and retirement systems, says a member of the Commission on the National Guard and Reserve.

Two members of that soon-to-be-dissolved panel, chairman Arnold Punaro and commissioner Patricia Lewis, told Military Times reporters and editors April 21 that the 95 recommendations in the group’s final report are reforms critical to the very future of the all-volunteer force.

Some of the commission’s wide-ranging proposals, issued Jan. 31, drew swift controversy, such as a call to place the active and reserve components into the same pay, personnel and retirement systems, to include:

• Using deferred annuities for active-duty retired pay, based on the reserve model, with payments for a full career beginning no earlier than age 57.

• Allowing service members to retire with limited benefits at the 10-year mark.

• Fully funding reserve component operations both at home and overseas.

• Helping troops transition more easily to and from their military and civilian lives if they choose, without penalty.

Such retirement changes would only affect people who join the military after they were implemented.

Punaro and Lewis said the framework for these potential changes should be laid quickly, using pilot programs to test some of the initiatives. But Punaro said the changes to the military personnel system should come over the next 10 to 20, such as the commission’s proposal to merge the active and reserve officer management systems and base advancement more heavily on achievement of competencies and experience.

The long lead time for any such changes to become reality is why starting as soon as possible is so important, Lewis said.

“If we don’t start now, we’re going to face a crisis,” Lewis said. “I think it’s at our doorstep. So it’s critical to start evaluating some of these options. We can’t wait another 10 years or five years until it blows up. Then we won’t have the option of moving forward.”

The reserve components are a fine place to start experimenting, she said. “I have no problem with piloting the retirement proposal or a number of these other initiatives in some segment of the reserve component,” she said.

If the scope of the proposal — which calls for some form of “gate pay” bonuses at critical points in a military career and has other features — is explained fully, Lewis also said she thinks it would be appealing to the active force as well.

“Just start someplace,” she said.

The sheer size of the 432-page final report begged for more space to explain its findings than news stories typically can provide, and initial reports on the proposals drew angry responses from troops and officials alike. Some critics suggested the commission had strayed outside its mandated lane in producing recommendations that would have far-reaching effects on the active force.

In its report, the commission explained in the post-9/11 world, the reserve components have become an “operational” reserve, as opposed to its traditional “strategic” reserve role.

For example, all or part of all 34 National Guard combat brigades have deployed to the wars in Iraq and Afghanistan, and thousands of reservists have served in other “war on terrorism” capacities.

Punaro said the twin open-ended wars are driving this train, noting the all-volunteer force, and particularly the reserve components, were never designed for this sort of sustained combat.

At the same time, the Air Force, Army and Marine Corps have programmed Guard and reserve units into their peacetime operations.

“This increased use of the Guard and reserve is not going to go away,” Punaro said. “So we felt compelled to address the broader issues that affect the ability to have this kind of integrated force in the future. And you can’t do it without addressing promotions, pay, retirement, family support [and] employer support. All of that is integral.

“Integration was key in our report — and it’s the key to the successful future of our military and all-volunteer force,” Lewis said.

That sense was initially lost in the headlights. During a recent trip by Joint Chiefs Chairman Adm. Mike Mullen to military bases in North Carolina, troops at every stop asked him to explain a proposal they had heard about — the delayed receipt of retired pay.

The commission’s main point is that the current system cannot be fiscally sustained.

“Seventy-five percent of the people [who] join our military never earn a nickel in retirement,” Punaro said.

And 75 percent of those who do reach 20 years serve only for another three years or less, and leave at what Punaro called “the peak” of their abilities.

“The nation is paying them for least 60 years to serve for 20 years,” he said, noting that the Pentagon spends $60 billion a year in benefits for 1.9 million retirees.

“You have a hard time getting past the emotion,” Punaro said. “We cannot just have a system that’s geared toward 25 percent of the people that serve in the military for 20 years.”

Criticism of the report wasn’t limited to troops in the field. The day after the report’s release, the assistant defense secretary for homeland defense and the chief of the National Guard bureau held a news conference at the Pentagon to take on several of the report’s suggestions about how the reserve components should be positioned and function in homeland defense missions.

Punaro said many of those differences have been resolved. He said defense officials have told him that the Pentagon fully supports about 60 percent of the group’s 95 recommendations and is likely to support at least another 20 percent.

“We’re all very encouraged by the responses that we’re getting, both from the Department of Defense and the executive branch as well as from the Congress ... and our outside stakeholders’ groups,” Punaro said.

In its two years of existence, the commission produced two interim reports and a final report. Some earlier provisions made it into the 2008 Defense Authorization Act.

By law, the Commission on the National Guard and Reserve will be dissolved April 30.