Army Sgt. Major James A. Vales, the service's senior sergeant major for retention, explains the re-enlistment bonus for soldiers deployed to Kuwait, Iraq and Afghanistan.

Army Sgt. Major James A. Vales, the service's senior sergeant major for retention, explains the re-enlistment bonus for soldiers deployed to Kuwait, Iraq and Afghanistan. (Lisa Burgess / S&S)

ARLINGTON, Va. — Effective immediately, active-duty soldiers who re-enlist while deployed to Kuwait, Iraq or Afghanistan will receive a tax-free, lump-sum bonus, which for most will exceed $5,000, Army officials said Thursday.

The bonus is the much-anticipated reinstatement of a flat rate, $5,000 sign-up stipend that was in effect for just two weeks in late September.

The bonus expired Sept. 30, when the Army’s fiscal 2003 funds ran out for the program. Since then, Army officials have been working to secure funds to continue the bonus, which was a highly effective re-enlistment tool.

“Everybody and his brother was saying, this is something we need to do for our soldiers,” Lt. Col. Franklin Childress, an Army personnel spokesman, said in a Thursday interview.

The bonus, which applies only to active-duty soldiers, not reservists, is retroactive to the date when the old bonus expired, Army Sgt. Major James A. Vales, the service’s senior sergeant major for retention, said in a Thursday interview in his Pentagon office.

“Any soldiers who re-enlisted from Oct. 1 to [Dec. 17] will get a retroactive payment,” Vales said.

The new bonus — including the retroactive money — is slightly different from the old version, however.

Most significantly, the new version does not apply to soldiers in Korea, while the two-week bonus did.

Congressional legislators decided not to include Korea in the list of eligible deployment areas when approving the legal language for the new bonus, which was part of the 2004 defense supplemental request, Vales said.

He said he did not know why Korea was left out, but added that Army leaders are now working on a new series of military occupational specialty-specific bonuses especially for soldiers in Korea. That program is not finalized, Vales said.

The new bonus is also not a flat payment of $5,000, as it was in September. Instead, it is calculated using a soldier’s base pay, years of service, and length of the re-enlistment, which must be at least three years.

The new formula means that some soldiers will get very slightly less than $5,000 under the new formula, but often will get more — sometimes considerably more.

A sergeant with more than six years of service who re-enlists for six years will get about $6,111, according to an example provided by Vales. A staff sergeant re-upping for the same six years will get a bonus of about $6,612, and a specialist re-enlisting for four years, $6,661.

Moreover, on Jan. 1, all servicemembers will receive their annual raise, so many soldiers will probably decide to wait until that date to re-enlist in order to have their bonus calculated using the higher base salary, Vales said.

The 2004 bonus, which is officially known as the Targeted Selective Re-enlistment Bonus Program, will “probably cost close to $100 million, when you include the retroactive piece,” Vales said.

Defense Secretary Donald H. Rumsfeld signed the order approving the new bonus on Wednesday night, Vales said.

Army officials knew they had a powerful retention tool in hand when they saw how popular the September bonus was with soldiers, Vale said.

Before the bonus, “we were in danger of not making our annual re-enlistment goal of 51,000,” Vales said. “We were about 6,000 re-enlistments short.

“But in the last two weeks of the [fiscal 2003] quarter [when the bonus was in effect], we saw a major spike in re-enlistments,” Vales said. “We ended up going over 51,000 by close to 3,000 reenlistments.”

Army personnel officers reported a total of 773 soldiers in Iraq, Kuwait and Afghanistan, and 182 soldiers in Korea, who specifically identified the signing bonus as the reason behind their enlistment in those two weeks, he said.

After the September bonus expired, rumors that the Army would reinstate the signing bonus for deployed soldiers were so strong that thousands of soldiers have decided to “take a wait and see attitude” before re-enlisting, Vales said.

“I don’t know for sure, but an educated guess is that there are probably close to 3,000 [soldiers] right now who are holding out on the decision to re-enlist” until the new bonus is announced, Vales said.

Army officials believe those fence-sitters are the reason the Army is about 12 percent behind on its first-quarter 2004 re-enlistment target, or about 2,000 fewer soldiers than the Army hoped to re-up between Oct. 1 and Dec. 31.

Now that the bonus is back, “what you’re going to see is a huge shot in the arm in [deployment] re-enlistments,” Childress said.

Vales agreed.

“I believe [the bonus] will keep us on track to achieve our retention goals in fiscal 2004,” Vales said.

Beyond retention, however, the bonus “is the right thing to do,” Vales said. “It’s a way to recognize that [deployed] soldiers are making a considerable sacrifice to the nation and to the Army, and they deserve a reward for choosing to stay with the Army team.”

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