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Cash or benefits?

26 Nov 2013 | Cpl. Brady Wood

Experts told the military compensation and retirement modernization commission that a top priority should be replacing non-cash benefits into immediate cash payments for troops, according to Andrew Tilghman, a staff writer for Military Times.
Congress created the commission earlier this year in response to growing concern that personnel costs, especially for retirement and health care, may threaten the military’s ability to train, equip and sustain the force in an era of declining budgets.
The bigger pieces of compensation such as health care and retirement plans for those that serve 20 years, may not be the most effective way to recruit, pay and retain service members and sustain the all-volunteer force, experts said.
David Chu, a former Pentagon personnel chief, said current military pay structure is flawed because there are troops that don’t fully appreciate the value of their benefits package.
“The in-kind benefits are a risky position for the government,” Chu told the commissioners. “Military personnel do not value the in-kind benefits to the same level that they cost the government.”
But some commissioners raised concerns about whether today’s troops, particularly younger enlisted members, could handle the increased responsibility that comes with more cash payments.
“I see the power of the economic principle of cash current versus benefits later…it is very, very powerful,” said retired Air Force Lt. Col. Mike Higgins, a member of the commission and former longtime senior staffer on the House Armed Services Committee.
“I think, for most service members, the system that we have right now would probably be best,” said Gunnery Sgt. Orion Murray, the career planner for Headquarters and Headquarters Squadron aboard Marine Corps Air Station Beaufort. “There are a lot of young military families that probably would not be able to handle the extra money given to them to pay for healthcare and other benefits.”
Unlike civilians, troops today receive significant non-cash compensation that is either in-kind benefits or deferred for many years. That includes big-ticket items such as the accrual of retirement benefits and the promise of lifetime Tricare coverage for retirees, even into their Medicare years, as well as smaller perks such as tuition assistance and access to Defense Department-run schools, on-base housing and subsidized commissaries.
The experts’ suggestion that troops may not fully appreciate non-cash benefits was at odds with comments the commission heard from an advocate from the National Military Family Association.
Eileen Huck, the Virginia-based group’s deputy director for government relations, said military families place a lot of value on the health care and family services provided to active-duty troops, including mental health care for their children.
“People have more comfort when they know they are in control [of ] what goes on in their life. For those Marines that are more disciplined with their finances, I think it would help put them at ease,” said Sgt. Rafael Nepaulsingh, an air traffic controller for Marine Air Control Squadron 2, Detachment Alpha. “At the same time, there are those individuals that would take advantage and use the money in a way that would ultimately hurt them in the long run.”
There are many benefits provided to service members that are used on a regular basis. The big question is, more cash or keep the current system?