Officials target military pay increases

  • Published
  • By Army Sgt. 1st Class Doug Sample
  • American Forces Press Service
WASHINGTON (AFPN) --  Military personnel will see their basic pay more in line with their civilian counterparts in the private sector in 2004 thanks to an increased pay and benefits compensation package. The package is included in the 2004 Defense Authorization Act approved by Congress.

The 2004 military pay and benefits plan provides a 3.7-percent across-the-board pay increase, said Col. Virginia S. Penrod, director of military compensation for the Department of Defense. It also targets pay increases for noncommissioned officers and warrant officers, some as high as 6.25 percent for senior-enlisted servicemembers.

Servicemembers will also see increases in housing allowance pay and special incentive pay.

The average basic pay raise, which is equal to a little more than 4 percent, helps to close the gap between military pay and civilian pay, Penrod said.

"Everyone receives a 3.7-percent pay raise across the board, this is by law," she said. The pay raise is a half percentage point more than private sector civilian employees will earn.

"The NCOs, E-5 through E-9, will receive targeted pay raises from 4.6 to 6.25 percent,” she said.

Part of the pay incentive is to help retain senior NCOs, she said. The highest pay raises, 6.25 percent, will go to E-9s with 26 years or more service.

"This (raise) recognizes the contribution of our senior noncommissioned officers and our career-enlisted force," Penrod said. "All NCOs will receive some form of a targeted raise, and the pay increases as the grade increases. So, it's an incentive to continue in the military and to pursue higher rank."

An average increase of almost 8 percent for military basic allowance for housing -- money given to military personnel to help defray the cost of housing expenses -- is also included in the package.

“The almost 8-percent increase for housing allowance continues our effort to reduce out-of-pocket expenses for military personnel,” Penrod said. Pentagon officials said they are hopeful to do this by fiscal year 2005.

"When BAH was enacted, housing allowances amounted to 80 percent of housing costs, this left the servicemember with 20-percent out-of-pocket cost," she said. "In fiscal … 2000, the secretary of defense committed the department to reduce these out-of-pocket expenses to zero by 2005. And we're on track to do this."

Military out-of pocket-expenses for housing are down to about 3.5 percent for January 2004 and "should be at zero in 2005," Penrod said.

"If you talk to a servicemember today (about their compensation) compared to their compensation package 10 years ago they are very pleased," she said. "The housing increase has been absolutely the right benefit at the right time. It shows we do value their commitment to the military and what they do for the country."

Another area of increased pay will be special and incentive pay, such as imminent danger pay and family separation pay.

Those pay increases were made possible in part because of President George W. Bush's supplemental funding request in 2003, Penrod said. That request authorized funding for increases in imminent danger pay from $150 to $225 per month, as well as increases in the family separation pay and support allowance from $100 to $250 per month.

Other new measures in the 2004 compensation package allow services to offer incentive pay to get officers to extend overseas tours.

"Previously this was only offered to enlisted members," she said.

The compensation policy has two principal thrusts, Penrod said. The first is to have an overall level of military compensation that is at least equal to the 70th percentile of the pay of civilians with comparable levels of education. The other is to target special and incentive pays and bonuses to address retention problems that are specific to various occupations and recruitment problems.

Also, beginning in 2004, the new compensation package will start phasing in percentage increases each year. The increase is amounts offset under current law for military retirees with a Veterans Affairs disability of 50 percent or more and eligible to receive both military retirement and Veterans Affairs disability pay. Currently a veteran's retirement pay is reduced by a percentage of the disability pay received from VA.

Beginning in 2004, veterans will receive an increased portion of the "off-set" to their retirement pay, Penrod said.

"And by 2014, the member will have the full concurrent receipt," she said.

Another pay benefit for veterans in 2004 will be in combat-related special compensation programs for retirees whose disability is directly related to combat or training for combat. Now all retirees will be eligible for these payments which essentially provide the equivalent of full concurrent receipt, Penrod said. The retiree must have had 20 years of service to qualify.

DOD officials said they remain committed to the preservation of a compensation and benefit structure that will provide members with a suitable and secure standard of living and will sustain a trained, experienced and ready force in the future.