Sunday, May 19, 2013
Walter Pincus covers defense and foreign policy fo
"The all-in cost of the all-volunteer force is one of the time-ticking bombs that could explode our defense capabilities if not dealt with responsibly," said Arnold Punaro, chairman of the board, a former top staffer on the Senate Armed Services Committee and retired Marine Corps major general.
Punaro said one reason that it's difficult to reform the system is because "the Pentagon does not know what the all-volunteer force really costs." His board study says the Defense Department has not included in its calculations all ancillary, life-cycle costs such as family housing, education, day care, commissaries and health care.
They are the equivalent of what industry would consider deferred compensation, Punaro said.
Under today's system, military personnel who retire after 20 years of service receive at least 50 percent of their salaries for the rest of their lives, indexed for inflation. Another 2 percent is added for every service year over 20. They also get lifetime health insurance under TRICARE, the military's HMO-style plan whose current annual fee for families is $520.
"The military (active duty) retirement system is arguably the best retirement deal around. Unlike most retirement plans, the Armed Forces offer a pension (technically a "reduced compensation for reduced services) with benefits that start the day you retire, no matter how old you are," according to Military.com.
Punaro adds these facts:
"First of all, 80 percent of those who join the military and serve honorably never get one nickel in retirement benefits or health care after they leave active duty. For the 17 percent that make it to a non-disability retirement, 75 percent of them retire at career 1/8year 3/8 23 or less (why wouldn't they)."
One result, he adds, is "we now have 2.4 million retirees and only 1.4 million active duty." Adding to the cost, he says, "We have 9 million beneficiaries of the $52 billion-a-year health-care bill of which 5.5 million are retirees and their dependents."
The 1970 Nixon-appointed commission that recommended moving from the draft to an all-volunteer force said the program "would be unsustainable over time if it did not end the 20-year cliff vesting retirement, the up and out promotion system and change the pay and compensation from time in grade to skills and performance." The all-volunteer program started in 1973, and 40 years later none of those changes has occurred.
Change will depend on the Military Compensation and Retirement Modernization Commission, which Defense Secretary Leon Panetta called for last year and Congress established in the fiscal 2013 Defense Authorization Bill. President Barack Obama signed the bill on Dec. 31.
Its task is "to make recommendations to modernize such systems in order to ensure the long-term viability of the All-Volunteer Force."
There will be nine members, one appointed by Obama and two each by the Senate majority and minority leaders and House speaker and minority leader. A four-month deadline was set to appoint the members. The law prohibits any member from being "employed by a veterans service organization or military-related advocacy group or association," a move meant to prevent conflict of interest.
Panel recommendations are supposed to come within two years. Five months after the commission is established, the president is to give it a set of principles for modernization. Four months later, the defense secretary is supposed to provide specific recommendations. Six months after that, the commission is to report its findings and recommendations to the president and to Congress.
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