The Fleet Reserve Association (FRA) is disappointed that the Department of Defense (DOD) failed to name distinguished and qualified enlisted personnel; active, reserve, and/or retired; to the Committee’s deliberative body. Although FRA has faith in the ability of the current panelists to provide the best of recommendations, the Association maintains that the effective representation of the enlisted perspective lends an invaluable amount of creditability to any discussion on compensatory programs for the enlisted force. Such representation can be only provided by those who have spent a career in the enlisted ranks.

Having brought that thought to the Committee’s attention, FRA offers the following quote which is still as valid as when former Chairman, Joint Chiefs of Staff, General Henry H. Shelton, made this statement printed in the Joint Force Quarterly, Autumn/Winter 1998-99.

“Even with more resources, we will continually be challenged to balance care for our people with investing in modernization and staying operationally ready. For too long, however, we have done the balancing on the backs of our people. If we do not correct this situation, we will risk losing one of the greatest achievements of the last quarter century – the all volunteer force… (P)eople are both our most precious resource and the key to our future effectiveness and well being. As we advance our interests around the world and prepare for tomorrow, we cannot lose sight of the importance of taking care of those who serve the Nation in uniform.”

Since then the Congress of the United States has made great strides in improving quality of life programs, including military compensation. The list of enhancements is most impressive as well as extensive. Congress has accomplished much in the shortest time frame to insure the all-volunteer force (AVF) will succeed and our troops are adequately compensated for their participation in combat operations in Iraqi and Afghanistan and in deployments throughout the world. However, FRA is concerned that the lack of enlisted representation on the panel signifies the result of the Committee’s final report may be a roadmap to return to the early years of the AVF, the demise or reduction in a number of viable compensatory programs.

One of the first recommendations from the Defense Department in the early 1970s was to amend the post-WWII military retirement system. Other actions adopted by Congress were: reducing the leave payback for enlisted personnel; changing the method of determining pay increases to basic pay, basic allowance for quarters (B AQ) and basic allowance for subsistence (BAS); authorizing DOD to collect 75% of BAQ from personnel residing in substandard quarters even if the rental value was less; and reducing cost-of-living adjustments to military retirement pay.

The idea that our young military personnel are more interested in having the money up-front may have some merit, but FRA offers the military retirement system as a reverse argument. Broad changes to the post WWII military retirement system, such as that enacted in 1986, returned less than 15 years later to haunt Congress. The idea of providing a retirement system worth less than the pre-1986 program had little negative effect on the military member until the member became career-oriented and closer to a retirement date. The hue and cry forced Congress to make hasty amendments – changes that were advocated by the same elected legislators who earlier voted for the 1986 program.

However, the receipt of retired pay has not been the most important compensation program among military personnel. The number one wish of our enlisted personnel is increased pay. As a result of the surveys and communicating with senior enlisted personnel, FRA adopted a legislative calendar advocating the pursuit of targeted pay for enlisted personnel in pay grades E-5 through E-9. FRA was instrumental in urging Congress to adopt targeted pay for E-5s through E-7s in July 2001. Targeted or selected pay increases have been blessed by the Defense Department, 9th QRMC, the U.S. Navy, The Military Coalition, National Military and Veterans Alliance and by seven (7) national organizations representing enlisted personnel.

In 1999, FRA produced its study on the need for targeted pay increases. The all-volunteer force (AVF) had implemented new basic pay levels for junior enlisted personnel. For privates and seamen (pay grade E-1) the pay nearly doubled ($144 each month to $269). The additional pay was to attract recruits for the military services as the draft dried up over the next few years. But no increases were adopted for enlisted personnel in pay grades E-5 through E-9.

The question for FRA was, “Why were noncommissioned and petty officers (NCOs/POs) of lesser value to the military than before the AVF?” Prior to the AVF, an enlisted service member, pay grade E-9 with 20 years of creditable service (YOS), earned a monthly basic pay of nearly six times that received by a Private or Seaman (E-1). An E-7 (16 YOS) earned more than four times that paid to E-1s, and E-5s (12 YOS) more than three times that of an E-1.

With two targeted increases in basic pay since the advent of the AVF (1981 and 2001) E-9s thru E-5s are still running behind the pay curve with basic pay ratios less than received prior to the AVF. Using the example in the immediate paragraph above, an E-9 now earns less than four times that of an E-1; an E-7 less than three times that of an E-1; and an E-5 earning but two times the basic pay of an E-1.

Since the advent of the AFV, our Nation’s NCOs/POs have become better educated and more highly trained, accepting greater responsibilities and increased authority. Their leadership skills are sorely needed in the AVF where for years they have trained not only their subordinates, but most of the young officers coming into their respective military service. The missing link is the failure to provide adequate basic pay scales for our NCOs/POs.

The value of enlisted leadership is recognized by our Allies. The Armed Services now are providing senior U.S. NCOs/POs to build a noncommissioned officer force in a number of foreign armies. The House version of the FY 2006 National Defense Authorization Act (NDAA) also authorizes for the first time an enlisted advisor to the Chairman, Joint Chiefs of Staff.

The new role of the senior NCOs/POs in the Armed Services necessitates a new review of their basic pay scales and the possibility of increased monthly rates for E-5s through E-9s.

Retirement Pay

As noted earlier, a number of recommendations to establish a new military retirement system have met with little enthusiasm by the men and women affected by the change. The post-Vietnam proposal, introduced in the Nixon Administration, met with disfavor among the major military and veterans’ organizations. It was returned to the Defense Department for further review and comments by the chiefs of the military services. It wasn’t until 1980 that the system was amended by reducing the retirement pay based on the Hi-3 basic pay earned in the final years prior to the members’ retirement date, plus other minor changes. A new system was adopted in 1986 in spite of objections from service organizations and in part because it was prospective, becoming effective 20 years from the date of enactment.

More than a decade later the hue and cry went up among the men and women in the Armed Services to repeal the 1986 system. The demand was for fair and equitable retirement payments equal to what their immediate predecessors earned. Congress got the message loud and clear amending the 1986 law that provided a choice of retiring under the 1980 statute, or accepting a lump sum of $30,000 up front on attaining their 15-years of creditable service. In addition they would receive reduced cost-of-living adjustments (COLA) and wait until turning 62 years of age for a catch-up on full COLAs.

The $30,000 bonus looked good to many of the young men and women reaching their 15th year of service. It was not too long before others who had been contemplating accepting the bonus changed their minds. The bonus wasn’t worth the years of service and sacrifices made during 20 or more years in uniform.

FRA led the fight to have Congress repeal the 1986 retirement system. Today, FRA believes Congress should repeal the $30,000 bonus feature as it’s an insult to those who have reached their retirement years and count heavily on retirement pay to provide some comfort on returning to civilian life. For enlisted members of the Armed Services, their retirement pay is about two-thirds less than the compensation received while in uniform. Members in pay grades E-7 and E-6 in which the greater number of enlisted personnel retire, receive retirement pay at 20 years of creditable service under 2005 basic pay scales of $1729.35 and $1454.10, respectively. If anything, retirement pay for enlisted personnel should be increased, not reduced or delayed until a later date.

Uniformed Services Former Spouses Protection Act

Recent news items, among them the Marine Corps Times, War and Wedlock, of June 27, 2005, have announced increases in divorce rates among service members, mostly those returning from or serving in Iraq or Afghanistan. The Times article reported that 6 percent of Army officers divorced in 2004, and enlisted personnel from 2.3 percent to 3.5 percent. Military women suffered higher divorce rates than the men, 8.1 percent in 2004. The primary reason appears to be stress. However, as quoted in the article, “Compounding post-development stress is the fact that officers and senior enlisted people still work long hours seeing to the needs of junior troops, planning their next training cycles and reconstituting equipment.”

Sadly, this trend also creates ample opportunity for the USFSPA to continue adversely affecting service members retired pay even before retirement. It is unconscionable that our men and women can be sent into combat or places where their lives and limbs are in danger, while the very government they serve can lay their future retirement pay in the hands of civil courts that render no-fault divorces which ignore sacrifices rendered by uniformed members to the Nation.

FRA believes the Committee should review this situation and recommend some action to ease up on the adverse affect the law may have on active and reserve military personnel. Also, FRA requests that the Committee recommend wide publicity by the Defense Department and the military services on the USFSPA and what can happen to those who divorce prior to and after retirement.

Submarine Pay

On October 1, 2004, the United States Navy authorized increases in Submarine Incentive Pays for commissioned officers in grades 03 to 06. The Navy noted this was the second phase of increases that began with enlisted and junior officers on October 1, 2002; however, FRA was unable to verify the Navy had mentioned increasing officer’s submarine incentive pay in 2002.

Submarine Incentive Pay originally was offered only to enlisted submariners. Subsequently, commissioned officers were authorized the payment at the same percentage as for enlisted (50% of basic pay). In 1928, the Hook Commission reported the need to provide greater incentives to commissioned officers. “The rates proposed for hazard pay serve as an inducement to undertake and continue special duties, and such inducement need not be as great in monetary terms for lower paid and less advanced personnel as for higher paid and more highly trained personnel.” … fortunately this is now not the case. It’s evident the current Chief of Naval Operations (CNO) Admiral Vern Clark, agrees: “I’m fond of saying that chiefs make the Navy run. Chiefs are the most influential leaders that we have in our institution.”

The chiefs’ importance to the Navy also applies to the Navy’s submarine service and FRA questions why the Navy increases the rates of submarine incentive pay for certain submarine officers while allowing the rates for senior enlisted chiefs to decrease with time in service. Are experienced and chiefs with longevity of lesser valuable to the submarine service than the officers with like experience and time in service? See chart below.

Value Of Increases

Commissioned Officers - Oct. 1, 2004
03(8 YOS & 26 YOS)	04(8 YOS & 26YOS)	05(8 YOS to 26 YOS)	06(8 YOS to 26 YOS)
$595 to $705	$595 to $790	$595 to $830	$595 to $830

Senior Enlisted Chiefs - Oct. 1, 2002
E7(8YOS & 26 YOS)	E8(8YOS & 26YOS)	E9(8YOS & 26 YOS)
$140 to $95	$120 to $75	$110 to $70

(YOS = Years of Service)

FRA seeks the Commission’s assistance in recommending a review of submarine incentive pay rates and more equitable rates to senior enlisted submariners commensurate with those authorized for commissioned officers on October 1, 2004.