- Reaction score
- 66
- Points
- 530
www.armytimes.com
March 28, 2005
Pentagon asks Congress for lump-sum bonuses
Army began paying cash upfront for re-ups last year
By Rick Maze and Jim Tice
Times staff writers
Pentagon officials sought to sell Congress on a pay-and-benefits plan March 16 that at first glance seems to spend money on two opposing goals.
The Defense Department wants Congress to encourage re-enlistment by increasing the ceiling on regular Selective Re-enlistment Bonuses from $60,000 to $90,000, and to routinely pay those bonuses lump sum, just as the Army and Marine Corps have done since last year. The Navy and Air Force pay 50 percent of a bonus upon re-enlistment, and the remainder in annual anniversary installments for the life of the enlistment.
Under a series of policy changes phased-in by the Army during 2004, regular re-up bonuses feature upfront cash payments of $10,000 to $40,000, while bonuses of $10,000 and $15,000 are available to soldiers who re-enlist while in the Middle East combat zone, or with specific units of action. A related incentive, called the Critical Skills Retention Bonus Program, targets lump-sum payments of $8,000 to $150,000 at retirement-eligible senior noncommissioned officers in priority specialties, such as Special Forces and explosive ordnance disposal.
At the same time, defense officials want lawmakers to increase retention incentives, they also are asking for new separation and retirement incentives, primarily to support the downsizing of the Navy and Air Force.
Along with seeking to reduce high-year tenure rules for officers to force an end to careers for those eligible for retirement, the military wants to use buyouts for some voluntary and involuntary separations.
This includes an annuity â †similar to the Voluntary Separation Incentive used during the military drawdown of the 1990s â †that would pay a monthly sum to those who leave the military before earning retired pay or a potential cash buyout of up to $25,000, Charles Abell, principal deputy undersecretary of defense for personnel and readiness, told the military personnel subcommittee of the House Armed Services Committee.
Because any voluntary separation plan needs to have a stick in case the carrots don't work, Abell said, the Pentagon also is asking Congress for authority to force departures through a selective early retirement system also similar to that used during the 1990s.
The two goals â †keeping some people while forcing others to leave â †is part of what Abell described as the â Å“force shapingâ ? in which all the services are engaged, even at a time when personnel officials are worried about difficulties in recruiting and retaining key people.
â Å“This is about keeping the right folks,â ? Abell said.
Aimed at the budget for fiscal 2006, the Pentagon plan focuses on using bonuses and special pays to influence behavior, either to enter, stay in or leave service, and includes no new initiatives for rank-and-file troops. Missing, for example, are previously planned targeted pay raises for midcareer and senior noncommissioned officers and petty officers, something the services' senior enlisted advisers have been pushing. The Bush administration wants to wait until a newly ordered study of military pay is finished next year before making further changes in basic benefits.
The pay study â Å“will look at the entire range of compensation,â ? Abell said. â Å“We have not put anything off limits, including whether we have our retirement benefits right.â ?
Abell said he knows Congress is working on more ambitious plans for increasing pay and benefits, particularly improvements for National Guard and reserve members, and suggested there may be room for agreement on some issues. For example, the White House is discussing ways to prevent pay reductions for troops being treated for combat-related injuries, something of great concern in Congress.
Administration officials also may end up backing a limited income-protection plan for mobilized reservists who are federal employees in civilian life.
Abell said the Pentagon also will make an effort to get and keep people in critical specialties by concentrating on giving them money now in the form of immediate bonuses, rather than cash later through deferred compensation. The Army began converting to such a system in late 2003, and now all retention bonuses are paid lump sum. The practice is particularly attractive to soldiers in the combat theater, as the bonuses are tax free. This is not as simple as it sounds, however. Even with the services believing that lump-sum bonuses would cost less overall than installment payments while achieving the same re-enlistment results, the services still would have to spend more money up front.
In addition to lump-sum re-enlistment bonuses, the services also may ask Congress to provide lump-sum payments for some special pays, such as assignment incentive pay, which now comes in monthly payments.
March 28, 2005
Pentagon asks Congress for lump-sum bonuses
Army began paying cash upfront for re-ups last year
By Rick Maze and Jim Tice
Times staff writers
Pentagon officials sought to sell Congress on a pay-and-benefits plan March 16 that at first glance seems to spend money on two opposing goals.
The Defense Department wants Congress to encourage re-enlistment by increasing the ceiling on regular Selective Re-enlistment Bonuses from $60,000 to $90,000, and to routinely pay those bonuses lump sum, just as the Army and Marine Corps have done since last year. The Navy and Air Force pay 50 percent of a bonus upon re-enlistment, and the remainder in annual anniversary installments for the life of the enlistment.
Under a series of policy changes phased-in by the Army during 2004, regular re-up bonuses feature upfront cash payments of $10,000 to $40,000, while bonuses of $10,000 and $15,000 are available to soldiers who re-enlist while in the Middle East combat zone, or with specific units of action. A related incentive, called the Critical Skills Retention Bonus Program, targets lump-sum payments of $8,000 to $150,000 at retirement-eligible senior noncommissioned officers in priority specialties, such as Special Forces and explosive ordnance disposal.
At the same time, defense officials want lawmakers to increase retention incentives, they also are asking for new separation and retirement incentives, primarily to support the downsizing of the Navy and Air Force.
Along with seeking to reduce high-year tenure rules for officers to force an end to careers for those eligible for retirement, the military wants to use buyouts for some voluntary and involuntary separations.
This includes an annuity â †similar to the Voluntary Separation Incentive used during the military drawdown of the 1990s â †that would pay a monthly sum to those who leave the military before earning retired pay or a potential cash buyout of up to $25,000, Charles Abell, principal deputy undersecretary of defense for personnel and readiness, told the military personnel subcommittee of the House Armed Services Committee.
Because any voluntary separation plan needs to have a stick in case the carrots don't work, Abell said, the Pentagon also is asking Congress for authority to force departures through a selective early retirement system also similar to that used during the 1990s.
The two goals â †keeping some people while forcing others to leave â †is part of what Abell described as the â Å“force shapingâ ? in which all the services are engaged, even at a time when personnel officials are worried about difficulties in recruiting and retaining key people.
â Å“This is about keeping the right folks,â ? Abell said.
Aimed at the budget for fiscal 2006, the Pentagon plan focuses on using bonuses and special pays to influence behavior, either to enter, stay in or leave service, and includes no new initiatives for rank-and-file troops. Missing, for example, are previously planned targeted pay raises for midcareer and senior noncommissioned officers and petty officers, something the services' senior enlisted advisers have been pushing. The Bush administration wants to wait until a newly ordered study of military pay is finished next year before making further changes in basic benefits.
The pay study â Å“will look at the entire range of compensation,â ? Abell said. â Å“We have not put anything off limits, including whether we have our retirement benefits right.â ?
Abell said he knows Congress is working on more ambitious plans for increasing pay and benefits, particularly improvements for National Guard and reserve members, and suggested there may be room for agreement on some issues. For example, the White House is discussing ways to prevent pay reductions for troops being treated for combat-related injuries, something of great concern in Congress.
Administration officials also may end up backing a limited income-protection plan for mobilized reservists who are federal employees in civilian life.
Abell said the Pentagon also will make an effort to get and keep people in critical specialties by concentrating on giving them money now in the form of immediate bonuses, rather than cash later through deferred compensation. The Army began converting to such a system in late 2003, and now all retention bonuses are paid lump sum. The practice is particularly attractive to soldiers in the combat theater, as the bonuses are tax free. This is not as simple as it sounds, however. Even with the services believing that lump-sum bonuses would cost less overall than installment payments while achieving the same re-enlistment results, the services still would have to spend more money up front.
In addition to lump-sum re-enlistment bonuses, the services also may ask Congress to provide lump-sum payments for some special pays, such as assignment incentive pay, which now comes in monthly payments.
