Shadow Government

It’s Time Benefits Caught Up With America’s New Military

The report by the Military Compensation and Retirement Modernization Commission (known as MCRMC, and pronounced by those in the know as “Micermic”) has thus far received a rather decent reception both on Capitol Hill and in the press. And rightly so (though as a commissioner I am not exactly an uninterested party). Our commission was ...

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The report by the Military Compensation and Retirement Modernization Commission (known as MCRMC, and pronounced by those in the know as “Micermic”) has thus far received a rather decent reception both on Capitol Hill and in the press. And rightly so (though as a commissioner I am not exactly an uninterested party). Our commission was both bipartisan and unanimous in its recommendations, no small feat in the current Washington environment and given the nature of the subject matter.

The commission’s unanimity was no accident. All of us began with the recognition that our forces have undergone significant social change since the All Volunteer Force was created some four decades ago, and certainly since some of its major compensation programs were initiated decades before that. Today’s military, the world’s most capable, is no longer one that is overwhelmingly male and single. Families with children are now as much a part of the military landscape as are women in uniform. Accordingly, issues such as health care for families, childcare, the transferability of education benefits, and support for families with special needs children have all become major concerns for our modern military. At the same time, changes on societal behavior have also mandated modernization, notably defined contribution retirement plans and choice in healthcare plans. In addition, some longstanding benefits, such as the ability to shop in commissaries and exchanges, cried out for efficiencies to better serve military members.

Accordingly, the commission has proposed a new approach to retirement for future military personnel (veterans and those currently serving are grandfathered) that blends the longstanding defined benefit approach for those who serve 20 or more years with a new defined contribution plan akin to that offered to civil servants and to which 40 percent of the military already contribute, even though the government does not match their contributions. The plan that the commission is proposing offers a better government contribution than the plan for civilians. It allows service members to choose how much to contribute, and how to blend the defined contribution portion with the traditional 20-year plan. It also offers members a new continuation pay after 12 years of service that encourages them to remain in the military. Our plan actually results in more money for service members while reducing costs to the government.

The emphasis on choice and modernization underpins our proposal for a replacement for all elements of the military’s Tricare program, with the notable exception of Tricare for Life, which remains intact. Our plan, called Tricare Choice, affords military families, including reserves, the ability to choose a health care suitable for their personal needs, similar to the choice of plans available to civil servants. Families of service members would receive a new allowance, called Basic Allowance for Health Care, which would result in the government covering all their premiums and would also afford them a payment toward co-pays which they could manage according to their unique needs. Military treatment facilities would be part of the new network, and would retain if not improve upon their ability to maintain the professionalism and readiness of our military medical personnel. And once again, the government would be able to realize some savings as well.

These changes call for a significant improvement in financial literacy for our military. Accordingly, we recommend new programs to support literacy, at a relatively small additional cost to the taxpayer.

Our proposals for creating a new Defense Resale Activity that combines commissaries and exchanges and draws upon the best business practices of both will result in better choice for service members while again resulting in budgetary savings. Sunsetting older education bills while retaining the post 9/11 GI Bill’s transferability benefits after ten years of service also responds to military needs while promoting retention.

The foregoing are just some of the 15 recommendations that the commission has put forward. They are all an integrated whole, and they reflect the military’s own preferences. In fact, our polling revealed that 80 percent of our respondents preferred our draft package of proposals to the current set of pays, allowances, and benefits.

A final note: our commission was determined not to be driven by short-term budget cutting considerations. Our aim was to empower a modern military with a modern compensation and retirement package that reflects their unique contribution to our nation.
It is now up to the Congress to respond to our report with the same spirit of non-partisanship that motivated our Commission. Should the Congress do so, both our forces and our nation will benefit from its actions for years to come.

 U.S. Army photo by Staff Sgt. Whitney Houston/Released

Dov Zakheim is the former Under Secretary of Defense.

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