Capping Retired Pay for Senior Field Grade Officers

📖 The Scoop

The 2007 National Defense Authorization Act (NDAA) made several compensation changes to increase the incentives for the most senior personnel to stay in service longer. However, the number of field grade and noncommissioned officers with more than 30 years of service has increased significantly since 2007--something that was not a target of the 2007 NDAA. In response to this finding, the Senate Armed Services Committee directed the Secretary of Defense to review the advisability and feasibility of capping mid-grade retired pay so that only members of the highest grades and with the most years of service would earn the highest retired pay. This report provides analysis to support the Secretary of Defense review. The RAND team took a multi-method approach focused on active duty personnel and drew on expert knowledge, administrative data, and advanced econometric methods for estimating retention behavior and for simulating policy responses. The researchers found that the increase in senior field grade officers was driven by an increase in officers with prior enlisted service. Experts provided several possible explanations and cautioned that capping retired pay for these officers would hurt retention, morale, and, possibly, the accession of officers who come up from the enlisted ranks. The researchers used RAND's Dynamic Retention Model to estimate the effects of using special and incentive pays to offset losses in retention but found that doing so would result in a net cost increase. The authors conclude that capping retired pay for senior field grade officers would have no positive benefits and could result in harmful outcomes with respect to force management and cost.

Genre: Biography & Autobiography / Military (fancy, right?)