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Retired Air Force Maj. Eric Pettersen, 61, of Colorado Springs, Colo., has been frustrated for months by a lack of information on the VA Retro Pay program coming from the Defense Finance and Accounting Service.

His frustration, and that of many retirees, turned to anger when a Nov. 15 self-imposed deadline for DFAS to complete a review of pay records for 133,000 disabled retirees, that original pool of retirees potentially eligible for retroactive “concurrent receipt” payments, was missed without explanation.

The retro pay program, which so far has paid catch-up amounts worth $200 million to disabled retirees, has been marred by several missed deadlines and shoddy communication. But those failings will be addressed, a senior DFAS official vowed in a Wednesday interview with Military Update.

“We have not met customer expectations. I personally find that unacceptable and apologize to all the VA Retro-eligible recipients,” said Lee Krushinski. The senior executive has been acting director of operations for DFAS for three weeks, since replacing Patrick Shine who retired Oct. 31.

DFAS and VA officials, when they launched the VA Retro Pay effort in September 2006, said all payments would be made within a year. In August, as that year drew to a close, officials said all but 33,000 files had been reviewed. DFAS set a new deadline of mid-November to fully pay the original pool of eligible retirees, many of whom are owed thousands.

DFAS officials now acknowledge that they didn’t have a firm grasp on the facts when they revised that deadline three months ago. As of Nov. 15, a total of 48,760 files of disabled retirees still needed to have pay reviews completed to determine retro pay eligibility. Also, DFAS officials say they don’t have enough facts yet to set a new completion of payment deadline.

Pettersen believes he is owed more than $25,000. It’s not the wait that angers him, he said, as much as the information void at DFAS, even after the agency misses it own deadlines for notifying eligible retirees. He said a DFAS official had told him his file was being reviewed, but if he didn’t get a payment notice by Nov. 15, he should assume he is ineligible.

“I know I’m entitled,” Pettersen said. “But there’s no one to communicate with. It’s like some sort of covert program where if you don’t get a letter saying you’re going to get money, you can’t ask a question. But when you do ask a question, they can’t give you any information.

“What’s going on? Why didn’t they put something in retiree newsletters, or send an e-mail saying ‘We’re not going to be done by the November date.’?”

The money that Pettersen believes he is due was withheld from his retired pay from April 2004 to mid-August 2006, a period when DFAS and the Department of Veterans Affairs were still debating how to implement Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP). The pays were enacted in 2003 and 2004 to begin to dismantle a ban on concurrent receipt of military retirement and VA disability compensation. VA and DFAS still struggle with the complexity of the payments, particularly with compensating eligible retirees retroactively.

Individual retro payments so far have averaged about $1,800. With Petersen, however, the VA took 29 months to reassess his 80 percent disability rating. When it was raised to 100 percent in August 2006, he became eligible, back to April 2004, for higher CRDP payments.

Krushinski promises to address VA Retro Pay problems. One of his first steps is to improve communication, he said. Letters are being sent immediately to all retirees with files being reviewed and to 46,000 retirees whose files have been reviewed but have no back pay due. It is “just unacceptable” that these retirees weren’t informed earlier, Krushinski said.

“Communication with our customers was not what I would call adequate, at all,” he said.

The missed deadlines, and the inaccurate statements on progress made earlier by DFAS and VA officials, were blamed in part on a misunderstanding of data being supplied by Lockheed Martin, the contractor hired to review files and calculate payments. The “payments” reported often only partially compensated retirees for total retro pay due.

For example, some retirees are eligible for both CRSC or CRDP and can switch between the programs each year based which will pay more for their personal circumstances. A retiree might be due two or three “payments.”

DFAS officials had misinterpreted Lockheed’s monthly payment totals to mean total retiree pay files reviewed and cleared. This fooled Pat Shine before he retired. It also left Thomas J. Pamperin, deputy director of the VA compensation and pension service, misinformed. These two senior officials routinely briefed readers of Military Update on progress with the program.

Krushinski said he too misunderstood the data when briefed on VA Retro Pay just a few weeks ago. It was only after he “sat down with everybody and really went through the numbers, drilling into them, that I definitely saw the problems we have here.”

Wrong numbers given “the media,” he said, “led many people to believe we were closer to finishing the project than we actually were.”

Lockheed Martin personnel trained to screen retiree pay files have cleared 128,000 payments through Nov. 15. But only 84,300 potentially eligible retirees from the original 133,000 pool have had pay files reviewed.

Lockheed has been told to raise the number of full-time personnel hired for the project by 16, to reach 98 in December, an official said.

Another factor for November’s missed deadline was computer software developed to automate retro pay calculations. It had an error rate of 17 percent and had to be scrapped. “We really counted on that automation to allow us to get out of manual processing,” Krushinski said.

DFAS officials couldn’t explain why that information wasn’t shared with retirees before now.

To comment, e-mail, write Military Update, P.O. Box 231111, Centreville, VA 20120-1111 or visit


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