Compensation triad addresses key AF concerns

WASHINGTON -- Three pay initiatives targeting senior leadership's concerns about attracting and retaining quality people are included in the fiscal 2000 National Defense Authorization bill. These compensation enhancements target pay raises, and changes to the pay table and to the military retirement system.

First, the bill calls for a 4.8 percent across-the-board pay raise effective Jan. 1, and requires pay raises to be set at half a percentage above the Employment Cost Index beginning in 2001 through 2006. "These initiatives will help narrow the pay gap between military pay and private sector wage growth, " Maj. Justo L. Rivera, chief, pay and allowance policy at the Air Staff, said.

In addition to the pay raise, the bill also includes a provision which allows the Defense Department to make a one-time reform of the current pay table to provide targeted pay increases for noncommissioned and mid-grade officers, effective July 1. The reform proposal marks the first systemic change to the DOD pay table in nearly 50 years, Major Rivera said.

"On top of the 4.8 percent across-the-board pay raise, some NCOs and mid-grade officers will receive a one-time pay increase ranging up to 5.5 percent in July 2000," he said.

For example, under the pay table reform, a senior airman with two years of service would receive an additional 4.6 percent pay increase for a gain of $360 extra for FY00, effective July 1. While a master sergeant with 20 years of service would earn an additional $365--a 2.3 percent increase.

"This proposed adjustment to the table will provide members of the career force progressively higher pay increase for each promotion," Major Rivera said. "Placing greater emphasis on pay increases associated with promotion better recognizes our career force NCOs and officers for their performance. These actions were necessary because previous changes in the pay table had the effect of weighting longevity more heavily than promotion in determining pay increases."

The raises keep pay competitive in the junior enlisted ranks by providing pay growth that outpaces the recent rise in civilian wages. At the same time, they also address the pay gaps for more senior NCOs and mid-grade officers.

Lastly, the bill restores the lifetime value of the military's retirement system and provides an incentive for service members to stay at least 20 years in the service, according to the major.

Service members who entered the armed forces on Aug. 1, 1986 or later, and were affected by the Military Retirement Reform Act of 1986, will have a choice. They can either return to a 50 percent-of-basic-pay (High-3) option with full inflation protection or remain under the MRRA plan (40 percent multiplier and reduced inflation protection). If they elect to stay under MRRA, they will receive a "service bonus" of $30,000 at 15 years of service by agreeing to serve a minimum of five additional years on active duty, for a total of 20 years.

"We feel the compensation triad, which 1) advocates full ECI pay raises as a minimum; 2) reforms the pay table to recognize performance and level the longevity increases and 3) restores the value of the military retirement system, strikes the right balance between the service's retention needs and the financial needs of our airmen," Major Rivera said.

He pointed out indicators that the military retirement system and pay are major issues with service members. In an Air Force survey conducted last fall of more than 600 officers and enlisted members leaving the Air Force, enlisted personnel indicated that the current retirement system was the main reason for separating from the Air Force (58 percent) followed by availability of civilian jobs and military pay.

In regards to the military retirement system, 86 percent of enlisted and 87 percent officers disagreed that "Military retirement provides a good incentive to serve 20 years or more." When asked about military pay, the majority of enlisted members and officers felt they could make more money in the private sector (88 percent enlisted, 78 percent officers). One-third of the enlisted said they would change their minds about leaving if they were put under a 50 percent of base pay retirement system while 12 percent of officers would do so. Enlisted respondents said more pay was the single thing the Air Force could do to keep them in uniform. One in two airmen said they would stay in if annual pay adjustments were equal to or higher than private sector wage growth.

A final vote on the authorization bill, which authorizes funding for DOD, is expected after Congress returns from recess in September. Once the authorization bill is approved, the next step is the appropriations bill that approves an actual budget to carry out the authorizations.

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