The Army, Navy, Air Force and are flush with quality recruits and are retaining enough second-termers and careerists to comfortably fill most enlisted job specialties, their personnel chiefs testified last week before the House Armed Services Subcommittee on Military Personnel.
There’s a critical shortage of pilots and several high-demand enlisted skills are hard to keep filled, including cyber warriors, linguists and nuclear-trained technicians, because missions are expanding or competition from industry is fierce. Recruiting will become a growing concern as Congress tries to reverse the recent drawdown.
But the personnel chiefs sounded more worried about other issues: the grind of too-frequent deployments, which continues to wear on service members and families; erratic budget practices of Congress, which have weakened readiness in multiple ways; and the new Blended Retirement System to take effect next year.
The personnel chief is particularly concerned about the impact of the retirement plan on retaining higher-skill careerists. The Navy’s personnel chief said unstable budgets in recent years had impacted training enough to leave the sea service without qualified personnel for 7,000 billets at sea.
This year’s posture hearing with the personnel chiefs was shorter than in years past because lawmakers had no budget request details to discuss. Four months into the chaotic Trump administration, a Congress that’s often described itself as dysfunctional still awaits a defense budget for fiscal 2018, which will begin Oct. 1.
Indeed, in remarks to open the hearing, Rep. Mike Coffman, R-Colo., personnel subcommittee chairman, said the threestar officers would be addressing budget and legislative requests “to the extent that they can.”
No budget details were shared, not even the size of the 2018 pay raise. All of the personnel chiefs, however, agreed that operational stress remains high amid rising threats in the Pacific and lingering wartime obligations in Iraq, Afghanistan and Syria. They applauded Congress for reversing the force drawdown. All of them also urged Congress to restore order to the budget process so the military has predictable, timely funding to give troops the training and equipment they need.
“Sustained global commitments and continued budget uncertainty have diminished our ability to successfully balance capability, capacity and readiness,” complained Lt. Gen. Gina M. Grosso, Air Force deputy chief of staff for manpower, personnel and services.
Lt. Gen. Mark A. Brilakis, deputy commandant for manpower and reserve affairs, used his opening statement to warn of the potential impact of the new retirement system. It will blend a reduced immediate annuity after 20 years of services with a Thrift Savings Plan enhanced by government matching of member contributions, with balances vested after just a few years of service.
Brilakis called it “the most significant change in military compensation in many years, so the financial education of each Marine is a priority” this year. “We must get this right,” Brilakis said. “Thereafter, we will be closely monitoring the BRS for any unintended consequences including those affecting retention.”
“I’m scared to death of that” plan, Rep. Trent Kelly, R-Miss., a colonel in the Army National Guard with 31 years’ military experience, told the witnesses.
Any member on active duty with fewer than 12 years’ service as of Dec. 31 will be able to opt into the plan in 2018 if willing to accept a 20 percent cut to lifetime retirement annuities to gain a portable TSP with government matching and also, sometime between their eighth and 12th year of service, a one-time “continuation payment” to service members who agree to serve at least four more years.
Kelly said he is worried that too many members trained at great expense in high-demand skills will take training and TSP balances and leave service after an enlistment or two for better-paying jobs in private industry.
“With the blended retirement system,” Kelly said, “we are going to lose those critical guys, those captains and majors. We’re going to lose those E-6s and E-7s at the peak of their career.”
“And I concur with you. We don’t know what the retention behavior will be with the BRS,” Brilakis told the congressman.
The other personnel chiefs were less concerned, suggesting blended retirement is integral to other changes to modernize how personnel are managed.
“From the Army’s standpoint, we’re moving from an industrial-age personnel management system to what I would call a talent management system,” said Army Deputy Chief of Staff Lt. Gen. James C. Mc-Conville.
He acknowledged Kelly’s point that the all-or-nothing current retirement, with no vesting in a governmentfunded benefit before 20 years, gives force managers great leverage today. If they can entice members to 10 years, the retirement plan usually can ensure they stay for 20. But members today want more options, McConville said, citing three of his own children serving in the military.
“They’re Millennials and they look at things differently than we do,” he said. “They want their talent managed. They want us to respect their knowledge, skill and ability … We don’t know yet what the Blended Retirement System is going to do. But there are some opportunities here” to use the continuation payment and other bonuses to “get folks in the right jobs, the right place, so they want to stay.”
For high-demand skills like cyber warfare, he said, “if we can incentivize right, they will stay because they get to do things in the Army they can’t do in the civilian world … We just have to compensate them so the families will stay”
The Navy, too, sees the modernizing of retirement choices as working in tandem with other personnel reforms begun a few years ago under its Sailor 2025 program, said Vice Adm. Robert Burke, chief of naval personnel.
“It’s all about providing that flexibility, those career choices,” Burke said.
He applauded Congress for last year giving the services authority they requested to pay the BRS continuation payment any time between the eighth and 12th year of service rather than only at the 12-year mark as originally allowed.
“Then, as we adjust our Selective Reenlistment Bonuses around, I think we’re going to have the latitude we need to control retention behavior,” Burke said.
“I believe we’re going to have to be agile in (use of) that continuation pay, and (also) have a modern system that people want to stay in,” said Grosso.
Rep. Steve Russell, ROkla., an Army infantry officer who commanded troops in Iraq and Afghanistan and retired as a lieutenant colonel, said he has “great concerns” over the BRS. “I think it makes us very vulnerable.”
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