Tag Archives: Benefits

Military retirement benefits and budget cuts

Posted by Mike Grice on

The chairman of the Joint Chiefs of Staff announced this past weekend that the service chiefs have agreed to a plan that would reign in the unprecedented expansion in servicemember’s benefits.  Not particularly surprising, really. As the wars come to an end the enticements that have been used to recruit and retain an all volunteer force become less affordable than they were before.  During the Global War on Terror, millions of young men and women entered the armed forces, and a great many of them deployed overseas to fight for the nation.

The goodwill that the nation felt towards the military, coupled with the real need for expansion, resulted in tremendous growth in terms of pay and benefits for those in uniform.  Countless millions of dollars have been spent on education, health, housing, and other benefits that were either not in existence before the wars began or grew exponentially in scope and cost.

That cost has become prohibitive, however.  In the words of General Martin Dempsey, the chairman of the Joint Chiefs of Staff:

“What we have asked these young men and women to do over the last 10 years, we can’t pay them enough.  Having said that, we also have an institution to manage.”

The chairman also pointed out the cost in real terms.  The DOD spends approximately half of its annual budget on personnel, and if things continue on as projected the cost will grow another ten percent.  It is untenable for the military to function with 60 cents from every dollar spent on the people who make up the military.

The good news, though, is that the current retirement plan will not be affected.  At least not for people in uniform currently that is.  It may very well change in the future, but it is for the moment safe from the budgetman’s axe.

At any rate, the “peace dividend” of the end of our wars in Iraq and Afghanistan will come at the expense of the Department of Defense.  It seems like the Joint Chiefs have finally realized the incontrovertable truth that with the end of war comes the lack of desire to pay for the military that fought it.  It is not a bad thing that the military retracts when there are no wars to fight, but the retraction must be thoughtfully done.

I just hope that those who make such decisions ensure that the military is ready for the next war.

And there is always another war.

 

 

TRICARE service centers to close soon

Posted by Mike Grice on

During my transition from active duty to the civilian world I found myself in the position of deciding just how I would procure health insurance for my family and I.  As a uniform wearing Marine my healthcare was covered by the local aid station, clinic, or hospital, but once I hung it all up that option vanished when my ID card switched from “Active” to “Retired”.

I have never had to make such a decision before; after all, medical care was part of the benefits package for those in uniform.  Fortunately, at my local Naval Hospital there was a TRICARE service center.  In the TRICARE service center was a real live human being who was both cheerful and helpful, and after spending a half hour or so with her I was able to make the right decisions and sign up for TRICARE Prime so that both my family and I would be covered once my HMMWV chariot turned into a pumpkin.

Unfortunately, that service center and the 188 others that are spread across the continental United States will be closing next year.  They will be replaced by a call center.  Although TRICARE states that customers will receive better service by calling a 1-800 number I somehow doubt it.  There is nothing like sitting down with a real person to get your questions fully answered.

Sadly the cheerful and helpful lady who helped me out will likely be out of a job next year.  Although TRICARE administrators project a $250 million savings by cutting the centers, the cost in terms of jobs and true customer satisfaction are going to be high.

At least in my humble opinion.

It’s here! Orders to Nowhere is now a book!

Posted by Mike Grice on

It’s finally here!  The first edition of Orders to Nowhere is available in print.  It will be six to eight weeks before it shows up in bookstores, and a week or so before it hits Amazon.com.  If you want to avoid the wait, you can order it straight from the printer by clicking the cover:

Orders to Nowhere

Since you are a loyal reader and follower of the blog that got it all started, you can use the discount code ZVGYFQ28 and save 10% off the cover price.

Thank each and every one of you for reading and following my journey through transition!

What’s next for military pay and benefits?

Posted by Mike Grice on

My last post was about the impending — and expected — drawdown of the military.  The United States is following the path of many other western nations as they shed soldiers and sailors in an effort to curtail the expense of national treasure and return their armed forces to the size they deem more appropriate for a post-war world.

It does make sense.  After all, standing armies, navies, and air forces are extremely expensive and tough to justify in times of peace (or at least of times of non-war, which seems to be a more apropos description of the 21st century age in which we live).  It has all happened before, and it will surely happen again.

For those who remain in uniform, however, things may well be changing as well.  The Department of Defense is considering pretty much any idea or option that comes to the table in terms of reigning in the costs of personnel, consume about a quarter of the DOD budget.  Various studies and commissions have examined the issue of military and military retiree compensation, and with the austerity brought on by the economy and sequestration such benefits come under greater scrutiny.

One of the latest efforts is the Military Compensation and Retirement Modernization Commission, a congressionally mandated effort to determine the “long term viability” of  military compensation (for more information, read today’s Stars and Stripes coverage of the commission here).  All things considered, looking under the hood of the military compensation machine is not in and of itself a bad thing.  It happens after every war, but this time the scalpels are sharp and the desire to perform some cost cutting surgery is possibly stronger than ever.

Efforts to change pension benefits, pay structures for serving personnel, medical coverage for retirees, and countless other benefits have been in the news lately and the new congressional panel is yet another bureaucratic mechanic crowded under the hood of the machine trying to dismantle what they can.

As I wrote earlier, a reasonable review is perfectly appropriate as the wars draw to a close.  The moral imperative of meeting the obligations of the nation to those who serve it, however, should be paramount in any discussion about tinkering with or cutting compensation.

I sincerely hope that the commission keeps that in mind.

Learning a new skill: Salary and benefits negotiation part 1

Posted by Mike Grice on

In the military one learns a good many things:  How to stand at attention and march smartly about.  How to carry and shoot a rifle, and how to live out of a backpack for weeks on end.  How to fix a tank or fly a jet.  Lots and lots of things.

One thing that you don’t learn, however, is something that everybody else in the business world learns with their first job: how to negotiate.

Negotiation is a very important part the employment process.  When a candidate is offered a position with a company he or she begins the discussion of compensation with the hiring manager, where things like compensation, benefits, hours, vacation time, career progression, retirement plans, insurance, and countless other things that are part and parcel of employment.  In the corporate world all of these items are negotiable, and both job providers and job seekers know it.

In the military the situation could not be more different.  When a young man or woman joins the military they are provided a comprehensive pay and benefits package, but it is one that is set by law and regulation.  There is no negotiation for a better salary or more flexible hours — in fact, there is no negotiation at all.  The pay, allowances, and benefits for military folks are no secret, either.  The pay scale, which is based on rank and time in service, is readily available on the internet as are all of the other  benefits, special pay conditions (such as jump and dive pay), and housing stipends.  When you join the military you get what you get, just like everybody else in uniform.

As a result of the defined pay and benefits in the military those in uniform never engage in the process of employment negotiation, and that can place them at a disadvantage when they hang up their uniforms and enter the civilian world where everything is negotiable.

Everything from the salary you will earn to the amount of vacation you can take to where you can park your car is on the table.  It is up to you, the job seeker, to get the best offer that you can, and if you don’t know to engage in the back and forth of negotiation then you risk leaving valuable things on the table.  There is one guarantee in negotiation: you will never get things that you don’t ask for.

Fortunately, you can arm yourself for such a negotiation by doing a little research and preparing for it.

The research bit can make an enormous difference in the negotiation process because it can provide you with valuable information about the company and what you can and can not ask for.  You can surf the internet (at sites like www.glassdoor.com or www.payscale.com) and ask your friends and contacts (especially those in the industry you are entering or work at the company) about what the average salary for your desired position is as well as the benefits package that the firm offers.

As the job seeker you have leverage in the negotiation up until the point that you accept the job offer and the terms that it contains.  Once you say “yes” the negotiation is over, and you are highly unlikely to be able to change anything.  At that point anything that was left on the table will vanish like a thief in the night.

So what are the types of things that you can ask for?  Here is a quick list of twenty things that many companies will entertain and which may or may not be similar to military benefits:

1.  Performance bonuses.  Can you make more money if your performance merits it?

2.  Flexible hours.  Maybe a four day week with longer workdays?

3.  Work location.  Work from home?

4.  Overtime pay.  How much will you be compensated for working extra hours?

5.  Retirement plans.  What kind do they offer?  How much will the company match in a 401K?

6.  Vacation time.  You received 30 days a year in the military, and the base in the civilian world is two weeks, unless you negotiate for more.

7.  Travel expenses.  Can you get  company car?  Mileage compensation or a gas station credit card?

8.  Non-monetary compensation.  Can you earn stock options or fully valued shares of the company’s stock?

9.  Career flexibility.  Can you create a path that starts in one area of the company and then move to another?

10.  Time off.  How about personal days?  Sick days?

11.  Health care.  Is health insurance included?  What are the deductibles?  Is there an on-site clinic?

12.  Insurance.  You had SGLI in the military at a steeply discounted rate.  Does your employer offer life insurance?

13.  Meals.  Is there a company cafeteria?  Are meals subsidized?

14.  Child care.  Can you bring your child to work?  How about a nursing room for those who wish to nurse their infants?

15.  Tech equipment.  How about a company phone or laptop?

16.  Discounts.  If the company produces goods, can you purchase them at a discount?  Is there a company store?

17.  Memberships.  Will the company provide memberships to a health club or gym?

18.  Travel.  Will you be expected to travel in coach, business class, or even better when you travel?  How about upgrades?

19.  Education.  Will the company pay for you to pursue an MBA or other educational opportunitity?

20.  Relocation expenses.  Will the firm pay for you to move your family to the city where you will work?

These are only the tip of the pay and benefits iceberg.  If you don’t do your homework and come to the bargaining table knowing what you can and should ask for you will get less than you could have.

In my next post we will prepare for the negotiation by rehearsing and doing a little self examination to make sure we do the best job possible at the bargaining table.

__________

Lessons learned:

– Military benefits are set.  Corporate benefits are not.  To get the best salary and benefits possible you are going to have to negotiate for them.

– Not all companies offer all benefits.  You need to do some research to see what the company offers, and then be prepared to ask for them.

– Salary is usually the biggest aspect of the negotiation, but it is not the only element.  Unlike the military, many corporate benefit packages are tailored to the individual employee.

– Use your network of contacts and the internet to research what will likely be on the table during the negotiation.  Don’t look foolish by asking for something the company does not offer, and don’t forget to ask for something that they do.

From Marine to Veteran

Posted by Mike Grice on

On January 1st of 2012 I officially made the big step out of my combat boots and into my flip flops.  It was indeed a significant and personal event, but it also marked a pretty significant change in my status in the eyes of the federal government.

On that day I became a non-member of the Department of Defense and the newest constituent of the Department of Veterans Affairs.  This jump is significant for a lot more reasons than I realized, and it can be confusing and overwhelming if you aren’t ready for it.

The day you become a civilian again marks the day you can no longer take advantage of many of the benefits you enjoyed in uniform.  If you are moving on after an enlistment or two and are not joining the retired rolls, then pretty much all of the benefits disappear with your short haircut.  No more tax free shopping at the Post Exchange and no more subsidized groceries at the commissary –  you are fully back in the civilian world and get to pay full price (tax included!) for your next pair of cargo shorts.

If you are retiring, however, you are still entitled to some benefits.  You can still shop at the PX and the  commissary, which is nice.  You can take advantage of many of the recreational facilities, too, such as the campgrounds, gymnasiums, and beach cottages.  Your priority slips to one peg below those still on active duty, but that’s ok.   After all, you’re retired now, so you have all the time in the world…or not, but that’s another story we’ll talk about later.

Either way, whether you are retired or simply out of the service, you still have a governmental agency that is looking out for you.

Enter the VA.

So what exactly does the VA do for you?  Well, let me fill you in.  First, a little bit of history.

The Veterans Administration’s lineage stretches back all the way to the Revolutionary War, when the Continental Congress made provisions for pension payments to soldiers who were disabled as a result of their service.  Over the next hundred years or so, the benefits and provisions grew with the nation’s involvement is wars at home and abroad, with the most significant being the war between the states.  Recognizing the sacrifice of those in uniform, none other than Abraham Lincoln said of the importance of the government’s duty to the veteran:

“To care for him who shall have borne the battle and for his widow and his orphan…”

By the beginning of the 20th century there were many programs to help veterans.  There were veteran’s retirement homes as well as hospitals and other facilities, with the responsibility for taking care of vets shared between several federal agencies as well as the individual states.  With the carnage of the First World War, however, it became evident that a consolidated and coordinated federal system was needed to meet the demands of the many thousands of veterans and their families.

In 1930 the Veterans Administration was created by act of Congress.  It consolidated all of the federal programs and responsibilities under one cabinet level department and took the onus of care off the backs of the individual states.  With the Second World War the department expanded dramatically and became the VA as we know it today.

So what can the VA do for you?  Here is a quick list of some of their major programs:

-Home loans

-Educational benefits

-Life insurance

-Special adaptive housing benefits for wounded servicemembers

-Medical care

-Psychological care

Within those major programs are dozens and dozens of smaller ones.  Take, for example, the educational benefits.  It isn’t just for college!  There are programs to teach you trades and skills completely free of charge, and depending on your status you may even be paid a housing allowance to go to school.

So when you take off your uniform for the last time don’t forget that there is an entire government agency that still has you in mind, and there are a lot of programs that can help you as you explore what is next in your life.  The educational benefits and home loan eligibility don’t disappear on your last day of service, and depending on your disability evaluation or retirement status you may be entitled to free health care as well.  Make sure to talk to someone at the VA during your transition journey.  I guarantee you will be surprised at how much they can do for you!

__________

Lessons Learned:

1.  Once you hit your EAS date you no longer fall under the DOD, but instead under the VA.  This is a big deal because you can’t go back once you transition over.  I will cover more about how important this is in future posts.

2.  The benefits are astounding in many cases, but it is up to you to seek them out.  Nobody is going to come to your house and educate you on the various programs.  Go to http://www.va.gov/ and look around.  You’ll be pleasantly surprised at just what the Veterans Administration offers.