Military Drawdown Brings New Career, Pay, and Benefits Changes
I try to avoid posting breathless blow-by-blow accounts of every little detail of the legislative negotiations that go into the military drawdown and budget debates. However, there’s recently been some movement in these discussions, along with changes to guidance and benefits.
First, the House Armed Services Committee has started a bipartisan effort to restore some of the military’s budget cuts that were made earlier this year. The result is that the HASC is eight billion dollars over the spending cap of last year’s budget control legislation as they attempt to rebuild the military into a smaller peacetime force. However, the additional military funding would come from changes to the federal civil service retirement system and reduced funding for some unemployment programs.
MOAA reports that the HASC approved this FY13 defense bill late last week, including the following provisions:
- A 1.7% military pay raise.
- A five-year pilot program requiring Tricare For Life beneficiaries to refill maintenance medications through the mail order pharmacy.
- Congress’ view that servicemembers pre-pay their retirement health care premiums through decades of service and sacrifice.
- Transition benefits for involuntarily separated servicemembers, including six months’ extension in family housing and two years of commissary/exchange benefits.
- 180 days of days of TRICARE Reserve Select health and dental insurance for members involuntarily separated from the Selected Reserve.
- Extended refinancing help for qualifying servicemembers who can’t sell their homes in conjunction with a military-ordered relocation.
Although Congressional sentiment is attempting to provide more support to military servicemembers and families, the committees still need to shepherd their proposals through the full houses. The Senate Armed Services Committee will probably draft its version of the bill later this month, and the negotiations may not really begin until after the November elections.
In the meantime, the Navy is continuing its drawdown cuts through the Enlisted Retention Board. However,
BUPERS NPC is still offering a Temporary Early Retirement Authorization to those who will reach at least 15 years of service before 1 September 2012. Sailors who were not retained by the ERB but who will qualify for TERA have to apply by 15 June (next month!) and must retire by 1 September. Of course, that’s not enough time for the transition process, let alone a search for a bridge career, but those retiring under TERA are still eligible for the extended transition benefits offered by the ERB. The smaller inflation-fighting TERA pension is almost always worth more than a large lump-sum involuntary separation payment. If you’re eligible, that military retirement goes a long way to assuring lifetime financial independence.
Sailors who have already separated under the ERB process during 2012, but who would qualify for the TERA program, can petition the Board for Correction of Naval Records to have their involuntary separation revoked and approved as a retirement.
The TERA application process was updated last month, and an updated TERA FAQ discusses the details. (This link opens a Word document instead of a web page.) The Navy has also published the “reduction factors” used to calculate the exact amount of TERA retirement pay. TERA offers the same service multiple as a regular military retirement (2.5% for each year of service) but reduces retired pay by 1% for each year short of 20. The math challenge is that these calculations are actually in terms of months of service, with the number of months for the service multiple rounded down (the standard for regular military retirements) and the number of months of service for the reduction factor rounded up. This calculation produces a slightly smaller reduction factor and a few dollars more of monthly retired pay. The document includes the formula along with the reduction factors so that servicemembers can precisely determine their retirement pay and verify their calculations against the estimate provided by the Defense Finance and Accounting Service.
Along with ERB and TERA, the Navy is shifting some housing utility costs to its residents in Public Private Venture base neighborhoods. Although this requirement has been around for over a decade, construction and renovation of the housing finally includes electricity and fuel meters. Residents are permitted an average consumption amount as part of their housing allowance, they’re provided monthly utility bills, and they pay extra if they exceed the upper limit. On the other hand, they’re given a rebate for significant energy savings, so they have a financial incentive to reduce their consumption. The program was piloted here on Oahu last year with nearly a 10% reduction in costs. Although it’s a Navy program for now, PPV housing is being implemented by all the services and the conservation incentive program will spread quickly.
The Department of Defense announced last week that over 14,000 more billets will be open to women. The specific rule change now allows women to be assigned to ground combat units at the battalion level instead of being restricted to the brigade level. The Army also intends to open six occupational specialties to women (see page 4 of the link for the MOSs). The other services aren’t opening more occupations to women, but women are eligible to fill billets in more units.
I’m a military spouse and the parent of a woman servicemember, so I’ve followed the issue for over three decades. This DoD policy change shines a spotlight on career discrimination. Although women are over 14% of the 1.4 million active duty servicemembers, they’re less than 11 percent of the senior enlisted force and just seven percent of flag officers. There are a number of reasons why women leave the military before competing for senior ranks, but a significant reason is that they’re smart enough to recognize when they’re not given a fair chance. This policy change is an important step forward but there’s a lot of work to be done in infantry, armor, special forces, and the submarine force. The 18-page policy report to Congress (February 2012) linked at the bottom of this post is worth reading for the details of each service’s changes.
And finally, on a lighter note, you know that the American military drawdown is gaining worldwide attention when the Royal Australian Navy announces that it’s hiring. They’re specifically interested in U.S. veterans who are submariners, medical specialists, and AEGIS radar experts. This program has been around sporadically for at least the last two decades, and it always gets a lot of attention in the U.S. Navy because the Australian Navy allows alcoholic beverages at sea.