The Quadrennial Review of Military Compensation (QRMC) provides a deep study of the military’s pay and benefits system, putting a much-needed spotlight on issues at the core of MOAA’s advocacy efforts.
The report is prepared by an extensive group of experts from all the services, the DoD, and research institutions. The secretary of defense is the Executive Agent for this effort, though it is the president’s responsibility by law (dating to 1967) to undertake the review at least once every four years.
As with previous reviews, it’s unlikely the 14th QMRC will be completed within the four-year requirement; we can anticipate a letter to be issued later this year, as noted by Under Secretary of Defense for Personnel and Readiness Gilbert Cisneros. Given an average of three years to complete, the next report likely would be submitted in the fall of 2025 — nearly five years after the previous report.
While we await instructions from the president to initiate this process, MOAA looks to inform the efforts that will shape this thorough review in the next couple of years.
The 14th QRMC should address the following pay and compensation issues:
Basic Allowance for Housing (BAH)
The review should determine efficiency and accuracy of the current BAH system and the appropriateness of using mean and median housing costs in such calculations (detailed further in Section 644 of the House version of the FY 2023 National Defense Authorization Act).
Further, the QRMC should determine to what degree BAH and the Military Housing Privatization Initiative is meeting quality-of-life standards for the servicemembers and their families, and the impacts of the arrangement on DoD’s recruiting and retention mission requirements.
Assistance Programs for Servicemembers
The upcoming review should assess the number of military families eligible for and in receipt of the Basic Needs Allowance. Further, the review should evaluate excluding BAH from gross household income for purposes of the Basic Needs Allowance, as detailed in Section 601 of the House version of FY 2023 NDAA.
Blended Retirement System (BRS)
The upcoming review should study the savings behavior of servicemembers related to Thrift Savings Plan – specifically, it should assess the take-rate for those who selected BRS during the opt-in year, and those who are automatically in the BRS plan.
The 13th QRMC identified differences in savings behavior between services and the two different avenues into the BRS plan, noting those who opted in save at a higher rate. To account for recruiting and retention challenges, DoD should know and share more about servicemembers’ savings behavior and the financial training they have received. In reviewing the behaviors noted above, the QRMC should determine how much the disinterest in investing impacts retention and recruiting.
A former alternative retirement system known as REDUX was initiated via the Military Retirement Reform Act of 1986; Congress noted potential recruiting and retention problems attributed to this change in 1997, according to the Congressional Research Service. The FY 2000 NDAA ended compulsory REDUX enrollment, but voluntary enrollment remained authorized until it was terminated by the FY 2016 NDAA.
Some recent QRMCs and their battle rhythm:
- 13th QRMC: President Trump on Sept. 13, 2017, directed the secretary of defense to initiate the report. It was filed in December 2020, 71 months after the previous QRMC report.
- 12th QRMC: President Obama determined the Military Compensation and Retirement Modernization Commission (MCRMC), established by the FY 2013 NDAA to review the uniformed services retirement system, fulfilled the requirement for the 12th QRMC. The president made this determination in January 2015, 31 months after the previous QRMC report.
- 11th QRMC: President Obama on Dec. 11, 2009, directed the secretary of defense to initiate the report. It was filed in June 2012, 52 months after the previous QRMC report.
- 10th QRMC: President George W. Bush on Aug. 2, 2005, directed the secretary of defense to initiate the report. It was filed in February 2008, 78 months after the previous QRMC report.
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