The military’s basic pay table should be redesigned so that servicemembers promoted faster than their peers have a pay advantage that lasts not for a year or two but through their careers.

That’s one of the key findings of the Defense Advisory Committee on Military Compensation, a seven-member panel of compensation experts whose final report was released this month.

Replacing the current time-in-service pay table, designed in 1949, with a time-in-grade table would make basic pay a more effective element of military compensation, the DACMC said. It would become a better tool for drawing into the military “lateral entrants,” that is, people with civilian-acquired skills, as well as members with prior military experience.

The idea of a revised military pay table, along with other sweeping pay recommendations from the DACMC, has become a “starting point” for a more thorough and careful examination of military pay being conducted by the Pentagon’s 10th Quadrennial Review of Military Compensation.

The QRMC director, retired Air Force Brig. Gen. Jan D. “Denny” Eakle, recently said that a new time-in-grade pay table “has merit.” It would “reward people for advancing ahead of their peers” through “a more permanent recognition” of their performance.”

It would signal, she said, “that this person has moved ahead of his or her peers and we’re going to compensate them over the long haul.”

Under the time-in-service pay table, officers and enlisted members promoted one year ahead of peers enjoy extra basic pay but only for that year. When colleagues reach the same rank, their basic pay will rise to match that of the fast burner. That’s because pay steps in the current table are based on time in service rather than time in a rank or pay grade.

By shifting to a time-in-grade table, the pay advantage from early promotion can more than double. The DACMC report notes, for example, that an enlistee who advances to E-5 a year ahead of peers, and stays a year ahead with future advancements, will get an extra $22,000 over a 30-year career. But if pay table steps are based on time in grade, that one-year head start will be worth about $45,000 over 30 years.

The difference would be even greater for officers. Under the current pay table, an officer promoted to O-4 a year ahead of peers would realize a $20,000 difference in basic pay over a full career. With a time-in-grade pay table, the difference would jump to $64,000.

Past pay studies have proposed a time-in-grade pay table but critics have prevailed, arguing that a time-in-grade pay table can be perceived as inequitable. Promotion rates, after all, can vary based on job specialty and branch of service too, and might not be tied to job performance.

The QRMC is studying how the military might transition to a time-in-grade pay table, Eakle said. That includes not only how to structure an equitable table but how to design a “save pay provision” so that no current members see their basic pay fall during a shift to time-in-grade pay steps.

The DACMC estimated the first-year cost of a transitional save-pay provision at $1.1 billion. Eakle cast doubt on that estimate. She said the QRMC will look at whether a revised table is possible without raising budgets.

“We don’t know what [the cost] would be,” Eakle said. “That’s part of the issue. You would try to do it as cost-neutral as possible.”

A revised basic pay table is one of two key DACMC recommendations aimed at strengthening the link between military pay and performance. The other initiative calls for an end to the wide disparity in basic allowance for housing between servicemembers with and without dependents.

As reported here last February, the DACMC would like to see housing allowances for unmarried servicemembers raised to match BAH paid to married members. Eakle said this idea, like the time-in-grade pay chart proposal, has merit. But it truly comes with a hefty and unavoidable cost. The DACMC put the cost at $550 million a year. The QRMC will study this proposal too, she said, but she suggested the hurdle is more daunting.

Shelia Earle, the Defense Department’s acting principal director for military personnel policy, was interviewed with Eakle. She explained what policymakers would consider in deciding whether to support such a sharp rise in housing allowances for unmarried members.

The higher cost would have to be weighed against the benefit toward sustaining the all-volunteer force, Earle said.

“Does it buy you better retention? What’s the sort of business-case aspect of making a change of that magnitude? It’s not enough for people to say, ‘It sounds good.’ It has to be a good investment for the nation,” said Earle. “That’s the benchmark we’re going to test it against.”

Eakle said the QRMC has no deadline for completing its own, more thorough review of military compensation, which involves every branch of service and the Joint Staff. Nor is there “pressure to adopt” any of the DACMC recommendations including controversial proposals to move the military toward a more flexible retirement plan with early vesting features and government matching of thrift savings plan contributions.

“These are some great new ideas. Great place to start. Things to consider. But certainly only a place to start,” said Eakle.

The DACMC report can be read in PDF format at:

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