About that QRMC Reserve Drill Pay Proposal . . . .

| July 28, 2012

Jonn’s recent article about the recent QRMC proposal concerning military reserve compensation got me thinking. So I guess you should consider this fair warning that I’m about to go down another rabbit hole. (smile)

Introduction

The 11th Quadrennial Review of Military Compensation (QRMC) has proposed a significant change in the way Reserve Component personnel are compensated, both while serving in the reserves and during retirement. In a nutshell, this proposal would reduce drill compensation significantly, and would reduce overall retirement credit (and thus retirement pay) less dramatically. In exchange, the QRMC proposes to allow a Reservist to begin receiving retirement pay substantially earlier – for many, between 7 and 13 years earlier – than allowed by current law (age 60 unless one qualifies for retirement under Active Component rules, for disability retirement, or for early receipt of Reserve retired pay due to contingency service) .

The obvious question arises: is this a good deal or not? And if it’s a good deal, for whom: the government, the Reservist, both – or neither?

What I’m going to attempt below is to come up with some numbers for a few representative scenarios. The first involve Reservists who are pure Reservists (no prior active duty) and serve 20, 25, and 30 year careers under each system. The second set of scenarios involve Reservists who have 4 years active duty prior to going into the reserves, then complete a 20, 25, or 30 year career in the reserves.

Background – Reserve Pay

Many Active Component soldiers (and many if most civilians) do not understand how reserve pay is calculated. However, such an understanding is necessary to understand the effect of the QRMC recommendations on reserve pay. What follows is a short primer, restricted to a discussion of base pay only (allowances are somewhat more complex and are outside the scope of this article).

1. Service on active duty. For pay purposes, a Reservist serving on active duty receives the same basic pay as an Active Component troop. One day’s active duty yields one day’s base pay. If eligible, housing allowances (not necessarily the same as for active duty), special pays for which qualified, and BAS/Sep Rats are also paid.

2. Paid inactive duty for training (drills). For a Reservist, a “drill” is a 4-hour block of training/instruction/duty. It may be paid or unpaid. If paid, a Reservist receives 1/30th of one month’s base pay for a drill – or one normalized day’s pay. (I believe special pays for which qualified are also paid on a similarly pro-rated and normalized basis). No more than two drills may be held in the same calendar day. A Reservist thus receives 4 days base pay for a typical drill weekend (4 drills, 2 each on Sat and Sun). Generally, no allowances are paid, so that’s it. No reimbursement for travel expenses, BAS/Sep Rats, housing allowance, etc . . . is mandated, though I’ve heard that on occasion some units will offer travel reimbursement and/or allow drilling Reservists to sack out in the Armory or Reserve Center.

As far as Reserve Pay goes, that’s pretty much it. Anything else a Reservist does is on their dime – and on their time.

Background – Reserve Retirement

Similarly, many Active Component soldiers (and most civilians) do not understand how Reserve retirement pay is calculated. However, such an understanding is also necessary to understand the effect of the QRMC recommendations on Reserve retirement pay. What follows is a short primer.

Reserve retirement is not paid immediately on retirement. Rather, it generally starts between ages 55 and 60 – and only before 60 if one has qualifying contingency support service on or after 28 January 2008, retires under Active Component rules (20+ years of active duty), or receives a disability retirement. It’s also calculated differently than Active Component retired pay.

Reserve retirement is calculated on a point basis. The total number of “retirement points” accumulated during a career is divided by a particular number (under the current system, 360) to determine an equivalent number of years of service. That number is then multiplied by 2.5 percent to determine the percentage of one’s high-three average base pay will be paid as a retirement pension.   This will typically be the average of the base-pay scales in effect for the individual’s retired grade during an individual’s last three years of service – but not always.  (I’m ignoring the older “final pay” system as not too many folks are still out there who qualify under that system.)

Retirement points are earned from various sources. Each Reservist gets 15 points annually gratis (“membership” points). One point is earned for each day of active duty. One point is earned for each drill, paid or unpaid (yes, a fair number of Reservists do indeed drill for points only). One point is earned for each 3 hrs of military correspondence course work. These are the primary ways a Reservist earns retirement credit. (There are a few other ways, but they’re rather uncommon.)

In order to be eligible to receive retired pay, a Reservist must have 20 qualifying years of reserve service. A qualifying year is one in which 50 or more retirement points are earned.

The maximum number of points a Reservist can earn in any case is the number of days in his retirement year (it’s not aligned on calendar or fiscal year boundaries) – either 365 or 366, depending on whether that year contains 29 Feb of a leap year or not. However, there is a separate annual limit for points from inactive sources – basically, that’s anything except service on active duty (annual training is considered active duty). The current annual limit for retirement points from inactive sources since late 2007 is 130; earlier years had lower limits ranging from 50 to 90. In theory, that means the maximum number of points a Reservist can earn in a given year is between about 144 (14 days annual training plus 130) and 365 (the number of days in a year; for leap years, 366). In practice, not that many Reservists approach 144 points in a given year unless they have a substantial amount of active duty during the year.

Finally, as noted above current law mandates a Reservist generally wait until at or near age 60 to receive Reserve retired pay. Exceptions are for those who retire after serving 20 years of active-duty service or for disability (these individuals generally qualify for retirement under Active Component rules) or who qualify for early receipt of retired pay (3 months early receipt is authorized for each 90 days of contingency service in the same fiscal year in support of designated contingency operations served on or after 28 January 2008; 55 is the earliest age at which early Reserve retired pay may be received).

The bottom line is that many Reservists qualify for retired pay in their late 30s or early/mid-40s. However, they then must wait literally decades to receive the retired pay they earned – these are the “grey area” retirees you may have heard about. In the meantime, the “grey area” retiree gets commissary, PX, and (if local conditions allow) MWR privileges. That’s about it (the other privileges authorized aren’t generally all that commonly used – or particularly useful, IMO). TRICARE coverage? Unless they qualified by virtue of 20 years of active duty service or were retired due to disability – not until age 60, amigo.

Current QRMC Proposal

The current QRMC proposal is to revamp the way Reserve drill pay and retirement points associated with same are calculated. In a nutshell, the proposal redefines a drill as one duty day vice a 4-hour block of duty. The effect of this is to reduce drill pay and retirement credit (but not annual training or other active duty pay or retirement credit associated with active duty) by 50% for members of the Reserves by 50%. It also changes the normalized year used to compute an equivalent year from 360 to 365 days. In exchange, members of the Reserves would be allowed to receive their earned retirement pay on the 30th anniversary of their entry into the military – theoretically, as early as age 47 – provided they had the required 20 qualifying years of service. It’s unclear if this proposal includes full retirement (e.g., “blue” ID card and TRICARE eligibility) or not at this point. My guess would be no, it’s only early receipt of pay. But I’ve been told I’m a cynical and pessimistic old fella.

Effect on Reservist’s Annual Base Pay

There is no effect of the QRMC proposals for Reservists while serving on active duty regarding annual pay and allowances. However, the QRMC recommendations dramatically affect the amount of annual and career base pay received by drilling Reservists while not serving on active duty.

A Reservist assigned to a drilling position who makes all scheduled drills and attends his/her Annual Training will generally receive 62 days base pay per year (12 mo x 4 drills/mo plus 14 days annual training). Under the QRMC proposal, this would be reduced to 38 days base pay (12 mo x 2 drills/month plus 14 days annual training). This is a 38.71% reduction in annual base pay. Even though allowances received while at Annual Training won’t be affected, that’s still one helluva “hit” in pay.

Effect on Reservist’s Career Base Pay

The effect on total career pay depends on how much active duty time the Reservist has, as pay received by a Reservist while serving on active duty is not affected by the QRMC recommendations; however, the effect on base pay received while drilling is substantial. Therefore, to calculate the career impact I’ve set up a spreadsheet that calculates two scenarios. Format is MicroSoft Excel 97-2003, so you’ll need something that reads that format to view/use it.

The first scenario is that of a “career” reservist (1 year training plus 1 year active duty each 5 years). I’ve assumed that this individual (1) attends all drills and Annual Training periods; (2) earns 10 retirement points per year from correspondence course sources, (3) spends a total of 1 year during their career in various schools (for convenience, I’ve placed this as their first year of service, though it would likely be spread out over their career), and (4) serves 1 year in 5 on active duty throughout the remainder of his/her career (this is current guidance of what to expect, at least in the Army Reserve). This should be a relatively decent approximation for the classical “reserve-only” careerist.

The second scenario assumes the individual has 4 years Active Component service, then joins a Reserve Component unit and completes his/her career. This career pattern is representative of many in the Reserves (thought the precise amount of Active Component service will obviously vary by individual). The same assumptions are made for drill, Annual Training, and correspondence course points in this scenario.

The spreadsheet calculates both the total number of days of base pay and total retirement points the individual would receive under each scenario if they retire from the Reserve Components at 20, 25, and 30 years. The number of retired points is then used to calculate the percentage of high-3 average pay the individual will receive as their Reserve retirement pay for each scenario. Finally, the reductions in career base pay and annual retirement pay caused by the QRMC recommendations are calculated in percentage terms

For a career Reservist, the following is total number of days base pay expected over their career under current and QRMC proposals, plus the percentage reduction expected under the latter.

20 Year Career
Current, 2756
QRMC, 2396
Reduction, 13.06%

25 Year Career
Current, 3370
QRMC, 2914
Reduction, 13.53%

30 Year Career
Current, 3983
QRMC, 3431
Reduction, 13.86%

The numbers for those with 4 years prior Active Component service show smaller reductions due to the relatively larger fraction of active-duty service (unaffected under the QRMC recommendations).

20 Year Career
Current, 3363
QRMC, 3051
Reduction, 9.28%

25 Year Career
Current, 3975
QRMC, 3567
Reduction, 10.26%

30 Year Career
Current, 4589
QRMC, 4085
Reduction, 10.98%

Impact on Reserve Retirement Pay

For a Reservist, the QRMC proposals impact retired pay calculations two ways. First, the years-of-service calculation formula is changed to use 365 vice 360 to calculate the equivalent number of years of service. Second, the proposal only allows earning 1 retirement point per drill day vice the 2 earned currently.  Each reduces the number of equivalent years earned during a Reserve career.

The following is the percentage of high-three average salary expected as as retirement pay for the Career Reservist under current and QRMC proposals under the above scenario, plus the percentage reduction expected under the latter.

20 Year Career
Current, 21.57% of high 3-average
QRMC, 18.1% of high 3-average
Reduction, 12.80%

25 Year Career
Current, 26.35% of high 3-average
QRMC, 22.87% of high 3-average
Reduction, 13.22%

30 Year Career
Current, 31.13% of high 3-average
QRMC, 26.92% of high 3-average
Reduction, 13.51%

The numbers for those with 4 years prior Active Component service show smaller reductions due to the relatively larger fraction of active-duty service (unaffected under the QRMC recommendations).

20 Year Career
Current, 25.44%
QRMC, 22.95%
Reduction, 9.77%

25 Year Career
Current, 30.83%
QRMC, 27.17%
Reduction, 10.57%

30 Year Career
Current, 35.34%
QRMC, 31.40%
Reduction, 11.14%

However, the QRMC proposal also allows potential receipt of retired pay significantly earlier – as early as age 47 vice between ages 55 and 60 depending on the amount of contingency service performed. So that reduced pension is drawn for up to 13 years longer than today’s retired pay is drawn.

One final point: calculation of Reserve retired pay “fixes” it to the pay scale used at time of calculation. Although COLAs are applied, if annual military pay raises are above CPI, that’s a minus; if annual military pay raises are greater than CPI, that’s a plus. Historically, the Federal government has treated the military somewhat better than CPI in terms of annual pay raises since at least the early 1970s. Whether that will continue or not in the future is unknown; my crystal ball is dirty today. (smile)

Conclusion

For me, this is a very hard call. Is getting retired pay as much as 13 years earlier worth a permanent reduction of between 9.75% and 13.5% in retirement pay, plus a reduction in career base pay of between 9.25% and 14%? Dunno. My gut feel is no – but I’ve been wrong before. Getting retired pay in the late 40s/early 50s vice in one’s late 50s to 60 is worth quite a bit.

And who does this recommendation benefit? The government, which obviously wants to save money – but which might well lose good people and piss away any savings in increased training costs as a result? The Reservist, who gets his/her earned retirement pay earlier – but sees a substantial reduction in same, plus a reduction in pay now? Both? Or neither?

Thoughts?

(Edited by author to correct from final-three to high-three average and to note that this is typically, but now always, the pay scales in effect during the three years preceding receipt of retired pay.)

Category: Military issues, Reserve Issues

Comments (32)

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  1. 68W58 says:

    One kibbitz-retirement pay is not based on the soldier’s final three average base pay, but highest grade successfully held, which may not be the same. Lots of guys who only made it as high as 0-3 before having to go enlisted who are still drilling and piling up the points. Their retirement will be based on the point value of a Captain’s pay, not on the E-whatever grade they hold at retirement (unless they make E-9 over 40 years, which has a higher point value than a Captain).

    The QRMC talked some about a variety of “incentives” to make up for lost pay for reservists. I’d like to know more about that before expressing an opinion. Also, if we are going to be paid in a similar fashion to the actives, we ought to get similar benefits (free Tricare for us and our dependents for example, though I know that that is not what the QRMC said-it would help sweeten the pot if this is what they eventually decide to do).

    Also, Army Times has reported on a proposal for a more “high tempo” reservist (double the amount of drills per month and a monthlong AT, deploying ever three years instead of ever six). That would also help make up for the lost income for some of us (I could probably guard bum until retirement if they did that).

  2. Anonymous says:

    I’ll have no problem with it, as long as NO income tax is taken, and NO penalty for no taxes. Soc-Sec, Medicare etc is OK but do not increase those “voluntary” payments.

    Without taxes removed, actual pay may get close to what the Reservist or Guard member would have received anyway, before this new adjustment.

    Otherwise, 0bama is once again stabbing the part-timers in the back.

  3. Hondo says:

    68W58: thanks for pointing out the error. It’s actually “high-3” vice “final-3” average for folks under that system, based on their retired grade – which, as you point out, may on some occasions be different from an individual’s final grade. Individuals who lost commissioned officer status after serving successfully but continued service in an enlisted or warrant officer capacity are one example. A reserve O5 or O6 who voluntarily “punches out” with less than 3 years time in grade is another – they retire at the next lower grade also.

    As I understand it, the actual process is to (1) determine the individual’s retired grade (highest grade at which one served successfully – which can indeed be a O-grade for officers who continued service in an enlisted or warrant officer capacity after losing their commissioned officer status), (2) determine whether the individual was discharged or moved to the retired list, (3) calculate the individual’s high-three average (almost always the last 36 months of service, either while on the retired list or immediately pre-discharge) using pay tables for their retired grade unless another period of service at a different grade results in a higher high-three average. The percentage is then determined from retirement points and multiplied with the high-three average to determine the retired pay.

    Under current rules, this almost always happens before the individual is eligible to draw Reserve retired pay (with the exception of the determination of retired pay for those electing immediate discharge vice movement to the retired list) – though on some occasions breaks in service may cause it to happen after an individual is 60 years old. It appears that will remain the case under the QRMC proposal also.

  4. Mark Nelson says:

    It’s been said before, but it’s worth repeating: If you consider that for monthly drills, i get no BAH, no free medical coverage, no travel expenses–nothing but base pay, getting four drill periods pretty much evens it out with AD pay.

    Here’s what will happen if the proposal goes through: you will lose pretty much the entirety of theh lower enlisted ranks. After travel and time off from work, these folks are already lucky if they break even. They are so far from retirement that it won’t matter. It simply won’t be worth their time and effort to stay in. As a Unit Career Counselor (Navy), i would have to advise many, if not most, to get out for financial reasons.

    And i will never, ever watch Bill O’Reily (sp?) again.

  5. Hondo says:

    Anonymous: no taxes withheld? Don’t hold your breath, fella. That simply ain’t gonna happen.

    In any case, it’s still a hard call. Financial pros will tell almost anyone that they should indeed take Social Security at first opportunity vice waiting until the full retirement age – and that has an ever larger reduction for receipt at age 62. Getting retirement pay up to 13 years earlier is indeed valuable. Whether it’s worth the dual reductions in the 9-14% range is the question.

  6. SGT E says:

    So folks who enlisted in a time of war to serve their country, deploy a time or two, and have no plans to make a career of the Army – such as myself – will see a 38% pay cut? Awesome!

  7. Hondo says:

    SGT E: If adopted, when you’re drilling vice on active duty – yes. No impact whenever you’re serving on active duty. Flip side is that those staying for 20 in the reserves get retired pay much sooner.

    Your call as to whether that’s something you want to consider or not. And it’s a moot point unless and until the proposal becomes law.

  8. SGT E says:

    Well, for me it’s my wife’s call, actually! The deal we made was one six-year enlistment, game over. I didn’t enlist until I was 35, so I was never interested in serving 20 anyway.

    Any change will see some folks win and some folks lose, and it ain’t like I enlisted for the money, so hey, que sera, sera…

  9. Yat Yas 1833 says:

    Who is coming up with these dumb a$$ ideas? When I was getting out we had to attend “classes” about reserve service when we EASed. One of the things that hooked me was the “four days pay for two days of duty”! Between the GI Bill and reserve pay things were thin but we made it, my ex was working as an accountant but with a family of four every little bit helped (a couple of years later we became a family of five).

    Yeah, AD is pulling multiple deployments and reserves/NG are filling the gaps so let’s cut their pay. Makes my head hurt.

  10. Stacy0311 says:

    but President Obama said he wasn’t going to balance the budget on the backs of our veterans. Are you telling me he LIED? What next? No Easter Bunny or Santa Claus?
    I’ve got 27 years so I “should” be grandfathered against any changes, but I wouldn’t count on it. And I see mass exodus of soldiers (not just junior ones, but all ranks) if this is adopted. Out state does provide lodging if soldiers live more than 50 miles away, but I see that going away too.

  11. Bucky Katt says:

    Any word on what, if anything, this means for Reservists already retired and waiting to hit the big 60?

    Wasn’t anything said in the AUSN article on this either.

  12. ANCCPT says:

    Boy. I see this hitting the mid grades that the Reserves/Guard is so short on already (E5-6, O3-4) really hard. I’m a flight nurse in my civ job, and I make decent money. I take a pretty decent pay cut already coming to drill, as do most of my enlisted. I see this being the final straw that breaks the camel’s back in people decided to go career or get out after their first enlistment. I’ll be honest, being a reservist is already a pain in the ass due to the optempo with all the mobilizations and deployments, and most of us also have civilian careers we are working on. I’ve had to put grad school on hold twice; If they try to make me delay it a third time, I’m not sure that the low pay, every 4-5 mobilizations and constant stress of sending my people god knows where for god knows how long is going to be worth it for my sanity and health.

    Sincerely, bummed out, exhausted, and discouraged Reserve Nurse Corp captain.

  13. ANCCPT says:

    So, I just spent some more time digging through this, and it seems to me that it’s pretty clearly stating that part of the objective of this realignment is to decrease force size via attrition. The department knows that the overall pay decrease will loose people, and that the early recipe of retirement pay will retain others.
    And this pretty well hits the reserve/guard in the teeth, unless I miss the mark on it. I’ve only been in since 2005. Do any of you guys who were in during the big cuts in the 90’s have any wisdom or observations?

  14. VA25U says:

    As someone who just enlisted in the Army National Guard this month, I’m a little torn between the options but I look at it like this: 1) if I take the pay hit, overall I’m worse off, even though I get to enjoy my retirement benefits much sooner (I’m 24). 2) They have now incentivized staying in for the full 20, since I’m getting less out of my time in the Guard in the short-run. Long-run gets me retirement benefits which make the pay cut theoretically worth it.

    Given the choice RIGHT NOW, I would rather see my pay stay the same than have immediate access to my benefits 20 years down the road. Unless they kick in tax-relief on pay like mr. anonymous said, it’s a lose-situation for someone like me.

  15. OWB says:

    It used to vary quite a lot among the states (may still?), but there are also educational benefits to factor in. Have seen a bunch of airmen who enlisted only for those bennies – all tuition paid plus a monthly stipend in addition to regular drill and ADT pay. Not going to keep those in who already have their education, but it could account for a significant number of young folks.

  16. OWB says:

    ANCCPT: All I can tell you is that it is survivable. Some of us actually lived through several such deals. The 70’s were very bad, the 80’s was bad as we got caught up again, then the 90’s were again very bad.

    Not sure if the 90’s really were worse or if I had a more mature perspective by then, but they certainly seemed much worse than the 70’s. We frequently had aircraft grounded for unavailable parts, some of which were literally less than $3 items. Mission effectivenss was definitely compromised. There was much unnecessary angst.

    Some of us also went for years without firing weapons for qual. We who were not on orders to go somewhere simply did not go to the range. No availabile ammo.

    It was horrid to have to decide whether to buy parts or ammo when sometimes you could get neither. But we mnanaged to survive with airworthy aircraft, and eventually eveyone was again weapons qualified.

    Never quite figured out how we managed to keep up with our shots, though! There never seemed to be a shortage of them. 😉

  17. SGT Kane says:

    Ok, here’s some numbers from the past month of my own.

    217. The number of text messages I’ve responded too dealing with “USAR” matters.

    684. The number of minutes I’ve spent on my cell phone talking to someone at the unit for various reasons.

    2030. The number of non-spam emails I’ve recieved and retained over the last month.

    53. The number of miles I’ve run this week to I can pass my bloody PT test.

    24. The number of miles I’ve rucked (55#) this month, so I can stay current on the company ruck marches.

    I think I can stop now, you get where I’m going with this. “One weekend a month my ass”.

  18. Militant Bibliophile says:

    Government math at it’s finest. Yes, money will be saved in the short run by reducing pay across the board and subsequently reducing retirement by 10%-15%. HOWEVER, those retirements will now be payed out for up to 13 years longer than previously, adding a huge cost to the back end of the bill. This is nothing more than an elaborate scheme to kick the can down the road and make it Somebody Else’s Problem, a problem that will inevitably have to be fixed by “adjusting” those oh so generous pensions. Tell me I’m wrong…

  19. Sig says:

    Some members of my company actually LOSE money because they are going to drill instead of working their “real” jobs–at the current pay rate.

    I guess it would encourage members of my linguist battalion to study their languages. Some already make more from language pay than they do in base drill pay–some make much more (it tops out at $1000 per month, though the highest earner I know of is $700).

    But I suspect it would encourage most to get out. Junior soldiers with only a few years in aren’t generally thinking about retirement. It’s hard to sell them on some nebulous retirement–especially when they see quite clearly how easily such things can change–when they can’t make ends meet now. And why put up with Army BS when you can make more in a weekend delivering pizza?

  20. WOTN says:

    Hondo, it certainly decreases the pay loss by including 5 years of active duty in the retirement and pay scale. By my calculations, using the recruiting line of 1 w/e a month, 2 weeks a year, the loss is 30% for a “typical” reservist.

    It may very well be Obama’s plan to activate the Guard/Reserve one year in 5, even after the “war ends,” but that is NOT in fact what they signed up for. And if that does occur, it is as likely as the cut in drill pay to drive people out.

    ANCCPT: Yes, I went through the 90’s cuts. We heard all the same propaganda as is being put out today: “We can rid of the slackers, the bad apples, etc.” The reality was that “zero tolerance” meant that a single screwup by a good Soldier meant we lost good Soldiers, while the risk-averse leaders who did the minimums and went to promotion schools survived. We paid for that early in these wars, with officers that wouldn’t risk putting their Troops on patrol, allowing the enemy to close and drop mortars and plant IED’s at will.

    You can expect tough years ahead, but eventually the American people will elect politicians that will end the hollow force politics, and right now? Well right now, letters to your Congressmen and Senators can effectively stop Admin plans to cut training, cut pay, cut retirement, and cut equipment. The House of Representatives will block many of these things, IF they receive pressure from their voters. They certainly don’t want to be on the wrong side of issues like this, when it hits the news.

  21. WOTN says:

    Let’s put this another way:
    The most common rank in the military is an E4, who currently on a drill weekend makes about $300.- For that $300, he is required to maintain APFT standards (on his own time), complete correspondence courses, and take on a number of other tasks, without pay.

    On a drill weekend, he is in the middle of a 12 day week with bosses at the unit unhappy that he’s tired and bosses at work unhappy that he’s gone.

    Will he still be willing to do that for $150?

    An E4 likely has 4-8 years civilian job experience. He very well may have a Bachelor’s Degree. He’s probably making more than $10/hr, but at some point he will have to decide between his civilian career and the Guard/reserves.

  22. PFM says:

    Just one thing about gray area retirement benefits – Tricare can now be purchased:

    http://www.tricare.mil/pressroom/news.aspx?fid=684

  23. Hondo says:

    WOTN: You are correct that I included 1 year in 5 as active duty in my estimates. That was by design. It’s also exactly what DoD says a Reservist should expect today – to serve 1 year in 5 on active duty. (I served quite a bit more than that between 9/11 and my retirement from the USAR in mid-2009.) That’s why a number of years over-and-above training is included in my comparison under both scenarios. And as I pointed out in the article, more active duty time means less impact from the QRMC proposal.

    You and SGT Kane are also correct in pointing out that drilling Reservists spend considerable time each month on military-related activities over-and-above the time spent at drill. That – plus the unreimbursed travel expenses associated with drilling at locations which may by reg be up to 150 miles away from one’s domicile, is IMO one helluva argument for retaining the current drill pay rates.

    PFM: Yes, TRICARE coverage can be purchased by many Reserve component personnel, and by grey area retirees. For some, it’s a viable option – although at roughly $1025/month for family coverage and $420/month for self-only coverage for grey area retirees, anyone with access to health insurance through other sources may well pass. Many if not most grey area retirees are employed full-time and get health insurance through their (or their spouses’) employment. For those grey area retirees, TRICARE would either be redundant or a very expensive supplemental insurance policy. Whether that will remain the case as many employers drop health insurance if/when “Obamacare” kicks in is a good question.

    Bottom line: you’re correct in stating that purchasing TRICARE is an option for those who otherwise don’t have health insurance. I just don’t think that the opportunity to pay $12,000+ annually for family health coverage (or over $5000 for self-only coverage) is all that valuable a “bennie”. YMMV.

  24. PFM says:

    Oh, I agree. Just puttin’ it out there. I’m single and the rates are still high enough to give me second thoughts. I’ll probably stick around and be one of those guys that retires out at max age (58 in my case).

  25. Anonymous says:

    I’m a e-5 reserve And did previous active time. I can barely do drills around 250-300$(4 drill). I wouldn’t do it for 150 or less. 250 ish is barely anything. I dont live 50+ miles either but around 30 ish,I get no extra travel pay or nothing.if I purchase tricare reserve I understand it’ll take out their cut out of that 250 ish, so why purchase. I had to do Alot my own time so it’s really not “one weekend a month” but I do like the idea of one weekend only.

  26. WOTN says:

    In the above article(Perspectives), I examine not only the percentages, and not only the Guardsman that does 4 years in combat (or “contingencies”) over 20 years, but also the effect on the Soldier that does what is required of them.

    In combination with the Obama proposals to charge retirees for the Health Insurance, a 65 year retiree could end up having a net due the government for the privilege of having served. A Private would end up earning $6.25 or less an hour, and in some scenarios, the money earned by getting the retirement check at age 48, instead of 60, even the added checks would mean less by age 63.

    Want to know what your retirement check is worth? An E7 with 20 years gets about 29.5 cents per retirement point in his monthly check, before taxes. That Obama proposal will reduce Guard/Reserve retirement by about $1700/year. His other proposal, in the Buffett tax, would increase health insurance costs by up an estimatedd $4456, on the low end for a 65 year old retiree in 2035, if he has 4 prescriptions (which is pretty standard fare).

  27. Hondo says:

    WOTN: the title of your article linked above is misleading. Under your scenario, the actual annual reduction is a bit less than 40% – 38.71%, to be precise. Only drill pay is reduced by 50%. AT pay doesn’t change.

    Under the current system, a drilling Reservist gets 62 days of base pay yearly (48 drills plus 14 days AT). The QRMC proposal cuts that to 38 (24 drills plus 14 days AT). That works out to 38/62 = 61.29% of the previous annual pay – or a reduction of 38.71%. That’s bad – but it’s not cutting pay in half.

    I intentionally left out dollar figures in my article because those are (1) grade-dependent, and (2) are based on future pay scales. We don’t exactly know those today, and my crystal ball is dirty. So I decided to keep it generic and let anyone who wanted to “what if” use the generic spreadsheets and plug in their own best guess numbers to get specific dollar figures. That’s actually pretty easy – just plug in your past and projected future retirement points, make your best guess at your retired grade and when you’ll retire, and calculate your estimate of high-3 average (between 92% or so of final is probably a decent “quick and dirty” guess to allow for the effect of 3-year averaging plus a 2-year pay raise occurring during the last years of service; if maxed out on 2-year raises, 95% is probably good). The last calculation (high-3 average times percentage of base pay received as pension) can then be done on a hand-calculator to yield a retirement estimate based on current pay scales. That implicitly assumes future pay raises at CPI (and thus equal buying power as today’s pay scale) – but I don’t know any better way to do it without getting really complex.

    I disagree with your use of the 1 year of training/never deploys model of Reserve service. Other than the First Gulf War, that was probably a realistic model prior to 9/11. It’s not valid since, nor does it seem to be projected to be a valid expectation for the foreseeable future.

    My case is a bit extreme, but hardly unique. I literally spent more time on extended active duty between 9/11 and my retirement from the USAR in mid-2009 than as a civilian – more than 4 1/2 years on active duty in less than 9 calendar years. Many members of the USAR and ARNG have 2 to 4 years of active duty since 9/11. I don’t see that pattern ending until we’re out of Afghanistan – and maybe not even then. The normal rule of thumb is for each unit deployed, you need 3 – one training for the next rotation and one recovering. Mobilizing RC troops to fill peak needs like deployments is still way cheaper than adding enough full-time AC force structure to do the same.

  28. WOTN says:

    Yes, Hondo, that is a fairly simple formula, for a mathematician. And on those rare occasions when the Guard/Reserve units attempt to explain it to their Troops, it has a tendency to induce a desire to take a nap.

    You have explained the retirement point system, as well as anyone has, but even with that, the average E4 is not going to know how it will effect him, or what he is likely to earn in retirement.

    And I have previously stated my issue with counting a year of active in 5. “Obama is ‘ending’ the War in Afghanistan.” That should, but won’t if he gets his way, end the 1 in 5. You may be perfectly happy with the amount of time you spent on active duty. You may even think it would be good to do some more, but I know MANY Reserve Force Soldiers that are suffering in their civilian careers, in the family life, and financially from those deployments. I know many that signed up to be a ready force in times of emergency. I know Troops that have lost businesses and those that have lost employment, and spouses because of it.

    Is that title misleading? Perhaps, but that is explained in the opening. It is also misleading to use years of active duty to explain away the huge cuts in retirement pay of the required amount.

    The fact is that attaining E7 in 20 years is very attainable, and that corresponds to a retirement check that is as low as $321/month or up to $918/month, if the individual does 5 years of active duty, incl. 4 years in “contingencies.” That would be significantly less for those only attaining E6 or E5, which is not that uncommon.

    But Obama has requested that military pay raises tied to inflation be ended, and the military has not received more than inflation (I would argue less than inflation since gas is not included) since Senator Webb argued that recruiting goals could be met without it in 2009.

    You purposely left out the dollar amounts, and I purposely included them, because it is dollars, not percentages with which Retirees will pay for those Health Insurance premiums Obama wants them to pay under the Buffett Tax. And it will be long after the next election that Troops and Retirees will feel the effects of Obama’s proposals, if Congress doesn’t stop him.

  29. nonsubhomine says:

    Well this is just great. My pay would have been cut in half this year – AT was cancelled because there is no money for it. Since I didn’t enlist until I was 28, the early retirement won’t help me a bit (I can already draw at 58 because of contingency operation time). I was trying to decide whether or not to re-up and go for the pension. If this reduction takes effect, the decision will be made for me. I will extend until I can transfer the GI bill to my kids and then pop smoke. It’s really not about the money. It’s more about the kick in the nuts.

  30. kp says:

    Apparently the Army is counting on the Obamaconomy to continue, and the Guard/Reserve will be happy with whatever scraps are thrown their way.

    http://www.stripes.com/news/us/army-to-expand-training-periods-for-guard-reserve-troops-1.184470#

    Army to expand training periods for Guard, Reserve troops

    “The end of fighting in Iraq and the drawdown in Afghanistan will not mean a return to a peacetime schedule of drilling one weekend a month and two weeks a year for the 550,000 citizen soldiers of the Army’s National Guard and Reserve, according to the Army’s top general.

    Instead, they will keep preparing for war, with training periods away from home each year that would grow from a two-week block to up to seven weeks, Gen. Ray Odierno, Army chief of staff said in an interview Monday with USA Today. Drilling one weekend a month would continue.

    “As they go through it, their readiness will increase, the number of days training will increase,” Odierno said.”