Gates seeks big changes to military pay, pensions

In his waning days as secretary of defense, Robert Gates is proposing historic changes to what he calls a "rigid, one-size-fits-all approach" to military pay and retirement benefits.

The traditions of paying service members of the same rank and experience identical base salaries may need to end, Gates says, as part of larger effort to control costs and better reward those whose skills are in highest demand.

The secretary has suggested that military salaries could be reduced, given that the services have consistently exceeded all recruitment and retention goals in recent years.

Pensions also need to be examined, he said in a speech last month, because service members don't get a dime unless they stay at least 20 years.

"That doesn't make any sense. That's not fair," he said.

A defense analyst said Gates' proposals have been debated in the past but might have more resonance now as the Mideast wars wind down and government leaders are pressured to reduce deficit spending.

"We're still adjusting to how we go to war and even how we operate in peacetime with an all-volunteer force," said Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments. "Part of that is, how do we provide the right incentives?"

Gates' ideas will draw immediate "knee-jerk resistance" from military groups, in part because the compensation system goes back generations and service members fear midcareer changes in their pay and benefits, Harrison said. He predicted that even if adjustments are limited to new recruits or those with a few years' experience, they will be a tough sell.

Mike Hayden, deputy government affairs director for the Military Officers Association of America, didn't mince words.

"We see this as a threat," Hayden said. "We see this as a sure-fire way to change the success we've had."

Gates, who leaves office this month, has argued that the Pentagon needs to take a harder look at where it is spending money to help ensure it has the hundreds of billions needed in future years to modernize its defense systems and replace aging aircraft, ground equipment and ships.

He acknowledged that studying military pay and benefits "will entail going places that have been avoided by politicians in the past."

But he argued that "a more tiered and targeted system, one that weights compensation toward the most high-demand and dangerous specialties, could bring down costs while attracting and retaining the high-quality personnel we need."

Gates said the pension system needs changing because roughly 70 percent of service members don't stay in until their retirement.

Those who remain for two decades are then given "every incentive to leave instead of stick around and give us the value that we've invested in for 20 years," he said.

Harrison said the military's retirement system is an antiquated model that many American companies have abandoned in favor of 401(k) savings plans or some other compensation.

Hayden counters that the 20-years-or-nothing approach to pensions has served well as "golden handcuffs" to keep experienced people from leaving early.

The pension, which amounts to 50 percent of a retiree's military pay, increases if a service member stays longer than two decades, he said.

Hayden and Lauren Armstrong, a spokeswoman for the Fleet Reserve Association, which represents enlisted sailors and Marines, both said that tinkering with the basic pay scale - even if it affects only incoming service members - will harm morale.

"One of the big concerns we have is any plan that would create haves and have-nots," Armstrong said.

The military already has systems of extra pay for special duties, such as combat, and offers significant enlistment and re-enlistment bonuses for those in career specialties that are in high demand, Hayden said.

U.S. Reps. Randy Forbes and Bobby Scott predicted that Gates' proposals

will not get a good reception in Congress.

Scott, a Newport News Democrat, warned that making changes to weaken military compensation during times of strong enlistment and an anemic private job market will hurt the Pentagon's ability to compete for qualified people when the economy is booming again.

Forbes, a Chesapeake Republican and member of the House Armed Services Committee, contends that Gates' proposals, which came just weeks before he is to be replaced by Leon Panetta as defense secretary, are more about trying to find ways to cut into defense spending and less about improving the military.

"This is something that is Gates-driven," Forbes said. "Whether Panetta picks up that same mantra - it will be interesting to watch and see."

Bill Bartel, (757) 446-2398, bill.bartel@pilotonline.com