Military Personnel
Active Duty Benefits Reflect Changing Demographics, but Opportunities Exist to Improve Gao ID: GAO-02-935 September 18, 2002The Department of Defense (DOD) uses employee benefits--that is, indirect compensation above and beyond a service member's basic pay--as a tool to recruit and retain personnel. DOD has instituted a number of benefits that reflect demographic changes in the active duty force since the draft ended and the military became an all-volunteer force in 1973. Many of these benefits address one of the most significant demographic changes--an increase in service members with family obligations. A second major demographic change in the active military has been a growing proportion of female service members. DOD has responded positively to most demographic changes by incorporating a number of family-friendly benefits; however, opportunities exist to improve current benefits in this area. In comparing the types of benefits offered by the military with those offered in the private sector, GAO did not identify significant gaps in the benefits available to military personnel. GAO did not make direct comparisons between individual military and private-sector benefits but did determine that all the core benefits offered by most private-sector firms--retirement pay, health care, life insurance, and paid time off--are offered by the military.
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Report to the Subcommittee on Personnel, Committee on Armed Services,
U.S. Senate:
September 2002:
MILITARY PERSONNEL:
Active Duty Benefits Reflect Changing Demographics, but Opportunities
Exist to Improve:
GAO-02-935:
Contents:
Letter:
Results in Brief:
Background:
DOD‘s Benefits Reflect Demographic Changes in the Active Force:
DOD Offers Wide Array of Benefits for Active Duty Service
Members:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Scope and Methodology:
Appendixes:
Appendix I: Active Duty Pay, Allowances, and Benefits:
Appendix II: Demographic Trends in the Active Duty Service Members:
Appendix III: Selected Employee Benefits for Active Duty Service
Members:
Child and Youth Programs:
Death and Burial Benefits:
Disability:
Discount Shopping:
Education Assistance:
Family Support Services:
Health Care:
Housing:
Life Insurance:
Miscellaneous:
Paid Time Off:
Retirement and Savings:
Appendix IV: Trends in Selected Private-Sector Employee Benefits:
Accidental Death and Dismemberment:
Child Care Assistance:
Convenience Benefits:
Elder Care Assistance:
Employee Assistance Programs:
Flexible Benefits:
Flexible Spending Accounts:
Flexible Work Arrangements:
Life Insurance:
Long-Term Care Insurance:
Health Insurance:
Paid Time Off:
Personal Financial Employee Education:
Relocation Assistance:
Retiree Health Benefits:
Retirement Plans:
Short-and Long-Term Disability:
Survivor Income Insurance:
Tuition Assistance:
Appendix V: Comments from the Department of Defense:
Appendix VI: GAO Contact and Staff Acknowledgements:
Table:
Table 1: Components of the Military Compensation System:
Figures:
Figure 1: Composition of Active Duty Force by Family Status (as of
Sept. 2000):
Figure 2: Range of Military Benefits Offered to All Active Duty
Personnel:
Figure 3: Composition of the Active Duty Force by Age Group (1974-
2000):
Figure 4: Education Levels of the Active Duty Force (1974-2000):
Figure 5: Minority and Female Representation in the Active Duty Force
(1974-2000):
Figure 6: Median Age of Employed U.S. Civilians (1974-2000):
Figure 7: Education Level of U.S. Civilian Labor Force (1992-2000):
Figure 8: Minority and Female Representation in the U.S. Civilian Labor
Force (1974-2000):
Figure 9: Marriage Rates in the Active Duty Military (1980-2000):
Figure 10: Marriage Rates in the U.S. Civilian Labor Force (1976-2000):
Abbreviations:
DOD: Department of Defense:
GAO: General Accounting Office:
Letter September 18, 2002:
The Honorable Max Cleland
Chairman
The Honorable Tim Hutchinson
Ranking Minority Member
Subcommittee on Personnel
Committee on Armed Services
United States Senate:
The Department of Defense (DOD) uses employee benefits--that is,
indirect compensation above and beyond a service member‘s basic pay--as
one tool to recruit and retain personnel.[Footnote 1] Employee benefits
are part of DOD‘s overall military compensation system that also
includes basic military pay, special pays, and allowances. (See app. I
for a list of specific elements of the military compensation system.)
DOD provides employee benefits to more than 1.3 million active duty
service members and their nearly 2 million spouses and dependents.
The Subcommittee expressed concerns about whether the current employee
benefit package available to active duty service members has kept pace
with changes in the demographic composition of the force and whether
the benefit package positions DOD to compete with private-sector
companies for high-quality personnel. Because of these concerns, the
Subcommittee asked us to review the active duty benefit structure.
Specifically, our objectives were to determine (1) how DOD has changed
benefits in response to demographic changes in the active duty military
since the advent of the all-volunteer force in 1973 and (2) how the
military‘s overall benefit package compares with the array of benefits
offered by private-sector firms.[Footnote 2]
This report expands on the issues we covered in our April 2002
testimony on active duty benefits.[Footnote 3]
Results in Brief:
DOD has instituted a number of benefits that reflect demographic
changes in the active duty force since the draft ended and the military
became an all-volunteer force in 1973. Many of these benefits address
one of the most significant demographic changes--an increase in service
members with family obligations. For each year between 1980 and 2000,
at least half of the active duty force consisted of married service
members, and active duty service members had about 1.23 million
children in 2000. A second major demographic change in the active
military has been the growing proportion of service members who are
women. In 2000, women comprised about 15 percent of the active duty
force, compared with 4 percent in 1974. Up to 10 percent of women in
the military become pregnant each year. DOD has responded positively to
most demographic changes by incorporating a number of family-friendly
benefits; however, opportunities exist to improve current benefits in
this area. Although DOD has several planned initiatives to assist
military service members‘ spouses who seek employment, it has not
systematically tracked and assessed the effectiveness of the employment
assistance services offered at military installations. DOD also has not
assessed the feasibility, costs, and benefits of offering extended time
off to new parents as a way to increase retention of trained,
experienced personnel.
In comparing the types of benefits offered by the military with those
offered in the private sector, we did not identify significant gaps in
the benefits available to military personnel. We did not make direct
comparisons between individual military and private-sector benefits but
did determine that all the core benefits offered by most private-sector
firms--retirement pay, health care, life insurance, and paid time off-
-are offered by the military. In fact, military benefits in some cases
exceed those offered by the private sector. These include free health
care for members, free housing or housing allowances, and discount
shopping at commissaries and exchanges. During the 1990s, some service
members
expressed concerns that their benefits were eroding, particularly their
health care and retirement benefits. In response to such concerns, the
military benefit package has been enhanced. In recent years, for
example, Congress restored retirement benefits that had previously been
reduced for some service members and significantly expanded health
benefits.[Footnote 4]
We are recommending that DOD expand measures to systematically track
and assess the effectiveness of the employment assistance services
provided to spouses at military installations and assess the
feasibility, costs, and benefits of offering extended time off for
parents to care for their children.
In commenting on a draft of this report, DOD concurred with our
recommendation concerning spousal employment assistance. DOD partially
concurred with our recommendation concerning extended time off for
parents and stated that it has contracted a study to evaluate the
feasibility of implementing an extended leave program for active duty
military members, including an assessment of extended leave for
new parents.
Background:
The basic goals of the military‘s compensation system are to attract,
retain, and motivate the number and quality of people needed to
maintain national security. In fiscal year 2002, Congress appropriated
more than $100 billion in compensation for military personnel.[Footnote
5] DOD is the single largest employer and trainer of youth and
recruited about 196,000 individuals into active duty in 2001. Although
a unique institution, the military nevertheless competes with academia
and other organizations for qualified people. The military may face
increased competition for qualified people over the next few years
because of continued increases in the number of high school graduates
going on to college and labor shortages projected through at least
2010. The U.S. Department of Education projects that the number of high
school graduates will increase by 11 percent by 2010-2011, and
enrollment in degree-granting institutions is predicted to increase
20 percent by 2011. The Bureau of Labor Statistics projects that the
civilian labor force will increase by 12 percent by 2010, while total
employment will increase by 15 percent.
In May 2002, DOD issued a strategic human capital plan addressing
quality-of-life issues and benefits. The plan, entitled A New Social
Compact: A Reciprocal Partnership Between the Department of Defense,
Service Members and Families, emerged in response to a presidential
directive requiring the Secretary of Defense to review measures for
improving the quality of life for military personnel and to provide
recommendations for their implementation. According to DOD officials,
the Social Compact is needed to ameliorate the demands of the military
lifestyle, which includes frequent separations and relocations, and to
provide better support to service members and their families. The
Social Compact focuses on the efforts DOD has or plans to make to
improve housing, education, health care, work-life issues, and family
and community support for service members and their families. It
emphasizes the need to maintain programs and services viewed as
benefits by service members.
The Under Secretary of Defense for Personnel and Readiness has
oversight of career development, recruitment, and pays and benefits for
active duty personnel. Within this office, the Assistant Secretary of
Defense for Force Management Policy develops policies, plans, and
programs for military personnel management, including quality-of-life
issues for service members and their dependents. The Deputy Assistant
Secretary of Defense for Military Community and Family Policy is
responsible for policies and programs that establish and support
programs such as child care, spousal employment assistance, and other
family support programs.
DOD‘s Benefits Reflect Demographic Changes in the Active Force:
The active duty force has undergone several demographic changes since
the end of the draft and the advent of an all-volunteer force in 1973.
It has become older and better educated, it has experienced increases
in the representation of minority and female service members, and a
greater proportion of its service members are married and have
children. Recognizing that a family‘s satisfaction with military life
can influence retention, Congress and DOD have responded by
establishing and increasing support services for military families.
However, opportunities exist to further improve benefits in this area.
Composition of the Force Has Changed:
The percentage of personnel over age 25 increased from about
40 percent of the active duty force in 1974 to nearly 55 percent in
2000. The proportion of enlisted personnel with at least a high school
diploma increased from about 80 percent of the enlisted force in 1974
to about 95 percent in 2000. During that time period, the percentage of
officers attaining a degree beyond a bachelor‘s degree increased from
25 percent to 43 percent of all officers. The proportion of minority
service members increased from 20 percent to 35 percent of the active
duty force between 1974 and 2000, and the proportion of female service
members increased from 4 percent to 15 percent.
Although reliable data on married personnel is not available for
1973-77, various DOD studies cite statistics showing that the
percentage of married enlisted personnel increased from approximately
40 percent of the force in 1973 to approximately 50 percent in 1977.
After dropping slightly from 1977 to 1980, the marriage rate rose again
through the mid-1990s. For each year between 1980 and 2000, married
service members, including both enlisted personnel and officers, made
up at least half of the active duty force. DOD attributes the rate
increases to the gradual aging of the active duty force.
Other DOD data also indicates growth in the proportion of service
members who have family obligations. The percentage of service
members with children increased from 43 percent to 45 percent
between 1990 and 2000, while the proportion of single service members
with children increased from 4 percent to 6 percent. Figure 1 shows
the composition of the active duty force, by family status, in 2000.
(See app. II for additional information on demographic changes in
the active duty military.):
Figure 1: Composition of Active Duty Force by Family Status (as of
Sept. 2000):
[See PDF for image]
Notes:
’Joint-service“ refers to marriages where the active duty member is
married to another active duty member or to a reservist.
Percentages do not add up to 100 due to rounding.
Source: Profile of the Military Community: 2000 Demographics Report,
Department of Defense.
[End of figure]
Congress and DOD Have Responded Positively to Demographic Changes:
Congress and DOD have responded positively to the growth in the
proportion of service members with family obligations by authorizing
and implementing a number of family-friendly benefits. Research has
shown that family satisfaction with military life can influence a
service member‘s decision whether to remain in the military.
Consequently, Congress has authorized, and DOD instituted, a number of
services to support military families. The Military Family Act of 1985
established a spousal employment assistance program.[Footnote 6] In
1989, Congress directed DOD to establish a relocation assistance
program.[Footnote 7] In 1992, DOD established guidance for
implementing, overseeing, staffing, and funding family support centers
at installations to deliver programs such as personal financial
management training, employment assistance, relocation assistance,
deployment assistance, and child and spouse abuse
prevention programs.[Footnote 8]
Health care benefits for military families have also been enhanced. For
example, Congress recently eliminated most copayments for active duty
families enrolled in DOD‘s managed health care program and extended
benefits for dependents living with a member of the uniformed services
in remote areas.[Footnote 9] In the area of education, Congress
authorized DOD in the National Defense Authorization Act for Fiscal
Year 2002 to grant reenlisting service members who possess critical
skills the option to transfer a portion of their educational assistance
benefits to their spouse and dependents.[Footnote 10] With respect to
child care, DOD has made progress improving the quality, availability,
and affordability of military child care. DOD is working to expand
capacity to meet a range of child care needs, including initiatives to
extend care hours, subsidize the cost of obtaining child care at
commercial centers, offer cash incentives to increase the number of
family child care providers, and construct additional child development
centers on installations.[Footnote 11] Lastly, DOD has identified a
need to reach out to the two-thirds of military personnel and their
families who reside off of installations, to make them aware of their
benefits, and to deliver services to them. One approach DOD is taking
is to increase its use of the Internet by adding information and
transactional features to Web sites.
Opportunities Exist to Further Improve Benefits:
Although a number of family-friendly benefits are available to active
duty service members, opportunities exist to improve current benefits
in this area that could aid in the retention of military personnel. DOD
has planned initiatives for expanding its spousal employment assistance
program but lacks information on the effectiveness of employment
assistance services offered at installations. DOD authorizes 6 weeks of
paid leave for new mothers but does not offer extended time off for the
care of newborn or adopted children.
Spousal Employment Assistance:
DOD has begun to pay increased attention to employment assistance
for the military‘s 700,000 spouses, who must move frequently (on
average every 2 years) with their spouses to different parts of the
country or the world and face many challenges when trying to find work.
Many service members are in dual-income households, with spouses
contributing on average about 25 percent of the family‘s income. In
1999, 48 percent of officers‘ spouses and 55 percent of enlisted
members‘ spouses were employed in the civilian labor force, while
7 percent of officers‘ spouses and 8 percent of enlisted members‘
spouses were unemployed and seeking work.
Many working spouses are underemployed. According to a 2002 DOD study,
the spouses of military service members earn an average of 24 to
30 percent less than their civilian counterparts. In part, this wage
differential, which increases for those with higher levels of
education, is due to local labor market conditions. Some installations
are located in remote areas characterized by relatively poor labor
market conditions. Military spouses face several other employment
challenges, such as frequent relocations that make it difficult to
sustain a career and accrue retirement benefits. The families of junior
enlisted personnel face particular financial difficulties as the result
of housing and transportation costs, the high cost of credit, and child
care expenses. The income that spouses earn can help to mitigate some
of these problems. DOD believes spouse employment is necessary for many
military families to meet basic family expenses.
In the last few years, DOD has taken a number of steps to enhance its
spousal employment assistance program, which has been in existence
since 1985.[Footnote 12] DOD held a ’spouse employment summit“ in 2000
to identify needed actions. DOD is now focusing on establishing
partnerships with private-sector employers who can offer jobs with
’portable tenure,“ which enables spouses to relocate and stay with the
same employer. Other efforts include expanding employment preference
for spouses working in Europe and establishing partnerships with
federal agencies to increase private-sector career opportunities. For
example, DOD is developing a partnership with the Department of Labor
to resolve issues such as the different state residency and licensing
requirements for jobs in teaching, nursing, and child care. DOD is
seeking Labor‘s assistance to help spouses who work in these fields
overcome employment barriers when they relocate. The Navy and the
Marine Corps have also launched a partnership with a civilian
employment services firm at two installations. These initiatives are in
the early stages of development. As a result, it is too early to gauge
their effectiveness in promoting spousal employment.
At installations, DOD offers services to help active duty military
spouses find civilian jobs. Services include job searching and career
planning, skills assessments, training to facilitate entrance into the
workforce, resume writing, interviewing, and networking. Neither DOD
nor the services have systematically tracked demand for employment
assistance at installations or developed outcome oriented performance
measures to help evaluate which of these kinds of services provided by
installations contribute most effectively to spousal employment. DOD‘s
Social Compact proposed a number of metrics to measure spousal
employment and to assess progress made in meeting the goals of the
spousal employment assistance program. Some of the proposed measures
would track changes in spousal employment, the percentage of federal
and DOD jobs filled by military spouses, and the extent to which
services and policies are standardized. These proposed measures would
enable DOD to collect useful information on spousal employment issues.
However, none of them would track the extent that spouses use the
program or gauge the effectiveness of the services offered (such as
career counseling, interviewing, and training) in helping spouses find
jobs appropriate to their knowledge, skills, and abilities. As a
result, DOD cannot determine which services offered through its spousal
employment assistance program are most effective in achieving
programmatic goals.
Extended Time Off for New Parents:
DOD‘s Social Compact, the department‘s strategic human capital plan for
quality-of-life issues, states that retaining personnel is essential to
building and sustaining DOD‘s highly skilled workforce. It further
states that lifestyle values of American workers from which the
department draws are changing: People want more time for themselves and
their families, and they want more time at home. Wise employers are
selectively adopting new practices to strengthen their relationship
with the workers they want to keep, the Social Compact states. In this
regard, a benefit that offers the potential for helping the department
retain trained, experienced personnel is extended time off for new
parents. Up to 10 percent of active duty female service members become
pregnant each year, and there were about 75,000 military children under
age 1 as of March 2001. While new military mothers and fathers may take
time off after the birth of a child, the military does not offer
extended time off to new parents. New mothers may take 6 weeks of paid
convalescent leave, which is similar to sick leave in the private
sector. Both new mothers and new fathers may also use annual leave. The
services stated that they do not track information concerning the
number of women who separate from active duty service because of
parental responsibilities. We previously reported that of the 28,353
women without prior military service who enlisted in fiscal year 1993,
2,074 separated because of pregnancy between the 7th and 48th month of
enlistment. Another 706 separated because of parenthood. These
separations accounted for more than one-third of the attrition for
female enlistees who joined the services in 1993.[Footnote 13]
Replacing trained, experienced personnel who leave is expensive. DOD
estimated for fiscal year 1998 that it had spent $35,000 per enlistee
by the time enlistees had been recruited and trained for
6 months.[Footnote 14]
The U.S. Coast Guard--which is part of the Department of Transportation
in peacetime but operates under the Navy during wartime--has offered
extended time off for new parents since the early 1990s.[Footnote 15]
The agency‘s ’care of newborn children“ program permits eligible
officers and enlisted personnel to separate from active duty for a
period of up to 2 years.[Footnote 16] During the separation period,
members do not receive pay and benefits, but they may elect to join the
Coast Guard Reserve and receive reserve pay and benefits. Upon
completion of their separation period, the members are guaranteed
reappointment to active duty at the same grade or rate they held when
they left. Although the program was originally aimed at retaining
women, other factors such as the emergence of dual-income and single-
parent families, as well as other economic and cultural changes,
created the need for enhanced family care opportunities for both men
and women. Of 244 service members separated under the program as of
June 1999, 133 were women and 111 were men. The Coast Guard found that
47 percent of members who had separated under the program had returned
to active duty when their separation period ended.
In comparison, private-sector employers with more than 50 employees are
required by the Family and Medical Leave Act of 1993[Footnote 17] to
allow their employees to take 12 weeks of unpaid leave to meet family
obligations, such as maternity or paternity leave, adoptions, and care
for a spouse, child, or parent with serious health conditions. The act,
which also covers federal government civilians but not military
personnel, does not require private-sector employers to provide paid
time off. Paid maternity and paternity leave in the private sector
appears to be rare. In 1997, only 2 percent of employees had access to
paid family leave programs, according to the Bureau of Labor
Statistics. Of the nine private-sector companies we contacted, one
allowed employees to take up to 3 years of unpaid leave after the birth
of a child and to return to a comparable position. Another company gave
mothers 12 weeks paid leave with the option to take additional unpaid
time off. If she returned within 6 months, the company guaranteed her
position; if she returned after 1 year, the company guaranteed
employment, but not the same position.
DOD Offers Wide Array of Benefits for Active Duty Service
Members:
On the basis of our analysis, we found no significant gaps between the
types of benefits offered to active duty service members as part of the
military‘s benefit package and those offered by private-sector
employers. Most important, DOD offers all four of the core benefits
that are offered by most private-sector firms. These benefits are
retirement, health care, life insurance, and paid time off. As shown on
the following page in figure 2, DOD also offers a wide array of
additional benefits. (See app. III for a description of selected
military benefits.) Many private-sector firms offer additional employee
benefits as well.
On the basis of our prior work on military compensation and
DOD‘s compensation studies, we have noted several difficulties in
making direct comparisons between military and private-sector
benefits. Such comparisons must account for (1) the demands of military
service, such as involuntary relocation, frequent and lengthy
separations from family, and liability for combat; (2) certain
principles of military compensation that are absent in the private
sector, such as the principle that military compensation must work
equally well during peace or war; (3) the difficulty in identifying
appropriate private-sector industries and jobs to use as benchmarks for
the military; (4) difficulties associated with measuring the value of
employee benefits; and (5) military personnel practices--such as hiring
primarily at the entry level and ’up or out“ rules--that are uncommon
in the private sector.
For these reasons, we did not make direct analytical comparisons
between individual benefits offered by the military and those offered
by the private sector. For instance, we did not attempt to determine
whether the military retirement system is based on certain criteria,
more or less lucrative than private-sector pension plans. However, we
sought to identify the types of benefits found in the private sector--
both traditional and emerging benefits--and used this information to
determine whether there are potential gaps in the benefit package
offered to active duty service members.
Figure 2: Range of Military Benefits Offered to All Active Duty
Personnel:
[See PDF for image]
Notes:
The shaded areas of the figure indicate those benefits that are
typically considered core benefits in the private sector.
This chart is not a comprehensive listing of all benefits offered to
active duty military personnel.
[End of figure]
Private-sector employers take a great variety of approaches when
designing their benefit package. Even so, three thematic trends have
become evident over the last decade or two. Specifically, private-
sector companies are (1) offering a growing number and array of
benefits--such as long-term care insurance, convenience benefits, and
elder care assistance--while also making changes to their traditional
core benefits; (2) introducing more flexibility in their benefit
packages; and (3) adding benefits to help employees balance work and
life responsibilities. (See app. IV for information on trends in
specific benefits offered by private-sector firms.) While private-
sector firms use pay and benefits packages to attract and retain
employees, they are also concerned about controlling costs. Employers
increasingly are sharing a growing portion of benefit costs with
employees, particularly health care costs, while requiring them to
assume more responsibility for managing their benefits. Some employers
have reduced certain benefits or ceased to sponsor coverage. We
recently testified that the availability of employer-sponsored retiree
health benefits eroded during the late 1990s and that rising cost
pressures on employers may lead to further erosion of these
benefits.[Footnote 18]
Like the military, the private sector also has reacted to demographic
changes in the workforce. Since the 1970s, the American workforce has
become more educated, more heterogeneous, and older. The numbers of
dual-earner families, working women, and single parents have increased.
Employers have reacted by offering benefits aimed at helping employees
balance work and life demands. Since the 1980s, employers have begun
offering benefits such as dependent care assistance, parental leave,
flexible work schedules, and convenience services such as on-site
credit unions and cafeterias and health promotion programs. Flexible
schedules that allow employees to adjust the beginning and ending of
their work day, work more hours per day but shorter weeks, or share a
job with another part-time employee are some of the ways that employers
help employees to manage their work and family responsibilities.
Flexible benefit plans also help employees by allowing them to select
additional benefits that may help balance work-life priorities.
Our work comparing the military‘s overall benefit package with the
array of benefits in the private sector showed that several military
benefits have their analogues or counterparts in the private sector. As
we noted earlier, the military offers benefits in the four core areas;
however, the military may structure its benefits differently. For
example, whereas the military retirement system requires 20 years of
service to be vested, private-sector firms typically have much shorter
vesting periods or no vesting period at all. However, military
personnel can begin receiving retirement pay and benefits as soon as
they attain 20 years of service and retire from active duty, but
private-sector employees typically must wait until at least age 55. The
military‘s health care benefit (TRICARE) is provided to service members
and their families through a network of more than 500 military
treatment facilities, supplemented by civilian providers.[Footnote 19]
The cost of this care to service members and their dependents is nil or
minimal. Active duty service members and their families enrolled in
TRICARE Prime do not pay enrollment fees, annual deductibles, or
copayments. Family members who use TRICARE Extra pay no enrollment fees
but are responsible for annual deductibles and cost shares of
15 percent. Family members who use TRICARE Standard also do not pay
enrollment fees. However, they pay a cost share of 20 percent plus the
difference between the TRICARE allowable charge and the doctor‘s
charge. Private-sector firms, in contrast, typically offer individual
and family health care through private insurers and normally require
employees to share the cost burden. According to the Bureau of Labor
Statistics, in 1999, medium and large private-sector employers paid the
full cost of health coverage for 25 percent of participants with
individual coverage and 15 percent of those with family coverage. Of
those participants required to contribute to their health coverage, the
average monthly cost was approximately $45 for individual coverage and
$151 for family coverage. In the core benefit area of life insurance,
DOD offers low-cost rates on group life insurance.
Service members pay $20 a month for the maximum $250,000 coverage. In
2001, coverage was extended to members‘ spouses and eligible
children.[Footnote 20] Finally, in the core benefit area of paid time
off, all service members receive 30 days annual leave and may carry
over as many as 60 days accrued leave to the next year. The military
offers numerous other forms of paid leave for specific reasons.
In some areas, the military offers benefits that would not normally be
available to civilians working for private-sector firms. For example,
service members and their dependents may obtain discount prices by
shopping at military commissaries (grocery stores) and exchanges
(department stores). They also have privileges to use an extensive
array of community facilities to include, among others, fitness
centers, swimming pools, officer and enlisted clubs, libraries,
community centers, hobby shops, and golf courses. Some private-sector
firms offer amenities such as fitness centers and company stores to
their employees, but few, if any, can match the breadth of facilities
and programs available on a military installation. It also would be
rare to find private-sector firms offering, as the military does, free
housing or housing allowances to all of their employees.
Military benefits, overall, have been enhanced in recent years. During
the 1990s, some service members expressed concerns that their pay was
falling behind that in the private sector and that their benefits were
eroding, particularly their health care and retirement benefits. Such
perceptions were cited as one cause of the retention problems the
military was experiencing at that time. Congress subsequently enacted
legislation to increase military pay and enhance benefits. These
efforts were aimed at improving the financial well-being and quality of
life of service members and at addressing recruiting and retention
problems. For example, Congress approved across-the-board pay raises of
4.8 percent for fiscal year 2000 and 3.7 percent for fiscal year 2001,
along with targeted pay raises to mid-level officers and enlisted
personnel.[Footnote 21] For fiscal year 2002, Congress approved pay
raises ranging between 5 and 10 percent, depending on pay grade and
years of service.[Footnote 22] Major enhancements to benefits included
the restoration of retirement benefits that had been cut:
for military service members who entered military service on or
after August 1, 1986,[Footnote 23] and increases in the basic housing
allowance to reduce out-of-pocket housing expenses for service members
not living in military housing.[Footnote 24]
Conclusions:
Many military spouses want to work, and many families need dual incomes
to meet basic expenses. However, frequent relocations associated with
the military lifestyle can hinder spousal employment and decrease
satisfaction with military life. The ability to assess the
effectiveness of the employment assistance service offered at military
installations is one critical step in developing this program. Doing so
could enable DOD to better target resources and tailor services to meet
the employment assistance needs of military spouses.
As competition with the private sector for qualified personnel
increases, DOD must continue to explore and evaluate benefits that
address changing workforce demographics, help meet mission needs, and
positively impact recruitment and retention efforts. The majority of
female service members are in their childbearing years, and up to
10 percent of servicewomen annually become pregnant while on active
duty. In addition, the emergence of dual-income and single-parent
families has created a need for enhanced family care opportunities and
flexibility for both men and women. The lack of extended time off for
parents following the birth or adoption of a child could be negatively
impacting retention. Moreover, replacing trained, experienced
personnel who leave is expensive. Because DOD does not track the number
of service members who separate due to parental responsibilities, the
magnitude of this issue is unknown.
Recommendations for Executive Action:
We recommend that the Secretary of Defense direct the Under Secretary
of Defense for Personnel and Readiness to:
* develop measures for tracking and assessing the effectiveness of
installation-level services offered through DOD‘s spousal employment
assistance program and:
* assess the feasibility, costs, and benefits of offering extended time
off to parents of newborn or adopted children as one way to increase
retention of trained, experienced personnel.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD concurred with our
recommendation on tracking and assessing the effectiveness of
installation-level services offered through DOD‘s spousal employment
assistance program. DOD partially concurred with our recommendation
to assess the feasibility, costs, and benefits of offering extended
time off to parents of newborn or adopted children. DOD stated that it
has contracted a study to evaluate the feasibility of implementing an
extended leave program for active duty military members. The study will
review leave programs at private-sector organizations and other
government agencies, including the U.S. Coast Guard. According to DOD,
the study will include an assessment of extended leave for new parents,
as well as other reasons for leaves of absence. The study is scheduled
for completion by September 30, 2002. We obtained and reviewed a
project description for the DOD study as well as a status report dated
August 2002. These documents indicate that DOD plans to address the
feasibility, costs, and benefits of extended maternity leave. The scope
of the study, however, is limited to active duty officers and does not
appear to address parental leave for new fathers. Our recommendation
was intended to apply to all active duty personnel, including enlisted
personnel and new fathers. If DOD conducts a follow-up study that
addresses these groups, then we believe it could satisfy the intent of
our recommendation.
DOD also provided technical comments that we incorporated as
appropriate. DOD‘s comments are reprinted in appendix V.
Scope and Methodology:
To identify demographic changes in the active duty force after 1973,
we obtained and analyzed relevant sections of two DOD reports,
2000 Population Representation in the Military Services and Profile of
the Military Community: 2000 Demographics Report, as well as additional
data from the Defense Manpower Data Center. We also obtained and
analyzed demographic data on the U.S. civilian labor force from the
Bureau of Labor Statistics. To identify the employee benefits available
to active duty service members, we reviewed DOD financial management
regulations, service budget documents, military compensation
background papers, DOD and service Web sites, and other department
documents. We also reviewed DOD studies on compensation, human capital,
and quality of life; research on military families and benefits, and
our prior studies on military benefits and personnel issues. We
interviewed officials at the Office of the Secretary of Defense, the
Army, the Navy, the Air Force, and the Marine Corps, and other
department officials. Based on our analysis of demographic changes in
the military, we focused particular attention on family-friendly
benefits, such as spousal employment assistance and child care.
To gather information on private-sector benefits, we conducted a
broad literature search of private-sector benefit practices and trends
and used survey results of medium and large employers from the
U.S. Bureau of Labor Statistics and several human resources consulting
firms. Sources included the following publications from the Bureau of
Labor Statistics: Monthly Labor Review, Compensation and Working
Conditions, and Employee Benefits in Medium and Large Establishments.
Although the studies we reviewed covered different time periods,
surveyed different employer populations, and asked different questions-
-thereby resulting in conflicting data on the prevalence of benefits--
their findings generally concurred on trends related to specific
benefits. We also interviewed representatives from nine companies that
have been recognized as innovative or effective in strategically
managing their human capital. The nine companies are Federal Express
Corp.; IBM Corp.; Marriott International, Inc.; Merck and Co., Inc.;
Motorola, Inc.; Sears, Roebuck and Company; Southwest Airlines Co.;
Weyerhaeuser Co.; and Xerox Corp., Documents Solution Group. We
previously reported on the key principles that underlie these
companies‘ human capital strategies and practices.[Footnote 25] We did
not make direct analytical comparisons between individual benefits
offered by the military and those offered by the private sector to
assess whether military benefits are more or less lucrative than those
offered by private-sector employers. However, we identified the types
of benefits found in the private sector--including core benefits and
emerging benefits--and used this information to determine whether there
were gaps in the benefit package offered to active duty service
members.
We conducted our review from March to July 2002 in accordance
with generally accepted government auditing standards. We obtained
comments on a draft of this report from DOD and incorporated
its comments where appropriate.
We are sending copies of this report to the Secretary of Defense. We
will also make copies available to appropriate congressional committees
and to other interested parties on request. In addition, the report
will be available at no charge at the GAO Web site at http://
www.gao.gov.
If you or your staff has any questions regarding this report, please
call me at (202) 512-5140. Key contributors to this report are listed
in appendix VI.
Derek B. Stewart
Director, Defense Capabilities and Management:
Signed by Derek B. Stewart:
[End of section]
Appendixes :
Appendix I: Active Duty Pay, Allowances, and Benefits:
This appendix lists active duty pays, allowances, and benefits that we
identified during our review. We compiled this list from Department of
Defense (DOD) financial management regulations, service budget
documents, military compensation background papers, DOD and service Web
sites, directives, and other department documents.
Table 1: Components of the Military Compensation System:
Pay/allowance/benefit: Basic pay; Major components: [Empty];
Subcomponents: [Empty].
Pay/allowance/benefit: Housing; Major components: * Basic allowance for
housing, domestic; Subcomponents: * Partial-domestic; * Substandard
family housing; * With dependents; * Without dependents.
Major components: Pay/allowance/benefit : * Basic allowance for
housing, overseas; Subcomponents: Pay/allowance/benefit : * With
dependents; * Without dependents.
Major components: Pay/allowance/benefit : * Government housing;
Subcomponents: Pay/allowance/benefit : [Empty].
Pay/allowance/benefit: Subsistence; Major components: * Basic
allowance for subsistence; Subcomponents: * Augmentation for separate
meals; * Authorized to mess separately; * Leave rations; * Partial; *
Rations-in-kind not available.
Major components: Pay/allowance/benefit : * Subsistence-in-kind;
Subcomponents: Pay/allowance/benefit : * Subsistence in messes; * Food
service regionalization; * Special rations; * Operational rations; *
Augmentation rations; * Sale of meals.
Major components: Pay/allowance/benefit : * Family subsistence
supplemental allowance; Subcomponents: Pay/allowance/benefit :
[Empty].
Pay/allowance/benefit: Continental United States cost of living
allowance; Major components: [Empty]; Subcomponents: [Empty].
Pay/allowance/benefit: Incentive pay, hazardous duty, and aviation
career pay; Major components: * Chemical munitions; * Dangerous viruses
(or bacteria) lab duty pay; * Demolition pay; * Flight deck duty pay; *
Experimental stress duty pay; Subcomponents: [Empty].
Major components: Pay/allowance/benefit : * Flying duty pay;
Subcomponents: Pay/allowance/benefit : * Aviation career, officers; *
Aviator continuation pay; * Career enlisted flyer pay; * Crew members,
enlisted; * Crew nonrated; * Noncrew member.
Major components: Pay/allowance/benefit : * High-altitude low-opening
pay; * Parachute jumping pay; * Special warfare officer pay (extended
active duty); Subcomponents: Pay/allowance/benefit : [Empty].
Major components: Pay/allowance/benefit : * Submarine duty pay;
Subcomponents: Pay/allowance/benefit : * Continuous monthly submarine
duty pay; * Incentive pay for operational submarine duty.
Major components: Pay/allowance/benefit : * Surface warfare officer
continuation pay; * Toxic fuels (or propellants) duty pay; * Toxic
pesticides duty pay; Subcomponents: Pay/allowance/benefit : [Empty].
Pay/allowance/benefit: Special pay; Major components: * Biomedical
science; * Civil engineer corps accession bonus; Subcomponents:
[Empty].
Major components: Pay/allowance/benefit : * Dental officers;
Subcomponents: Pay/allowance/benefit : * Accession bonus; * Additional
special pay; * Board-certified pay; * Multiyear retention bonus; *
Variable special pay.
Major components: Pay/allowance/benefit : * Diving duty pay; *
Enlistment bonus; * Foreign language proficiency pay; * Hardship duty
pay; * High-deployment per-diem allowance; * Hostile fire pay/imminent
danger pay; * Judge advocate continuation pay; Subcomponents: Pay/
allowance/benefit : [Empty].
Major components: Pay/allowance/benefit : * Medical officers;
Subcomponents: Pay/allowance/benefit : * Additional special pay; *
Board-certified pay for nonphysician health care providers; * Board-
certified pay; * Diplomate pay for psychologists; * Incentive special
pay; * Medical officer retention bonus; * Multiyear special pay; *
Variable special pay.
Major components: Pay/allowance/benefit : * Optometrists; ; * Nuclear
accession bonus; * Nuclear officer incentive pay; Subcomponents: Pay/
allowance/benefit : * Monthly special pay.
Major components: Pay/allowance/benefit : * Nurse corps officers;
Subcomponents: Pay/allowance/benefit : * Incentive special pay for
certified registered nurse anesthetists; * Registered nurse accession
bonus.
Major components: Pay/allowance/benefit : * Pharmacy medical;
Subcomponents: Pay/allowance/benefit : [Empty].
Major components: Pay/allowance/benefit : * Reenlistment bonus;
Subcomponents: Pay/allowance/benefit : * Regular; * Selective.
Major components: Pay/allowance/benefit : * Responsibility pay; *
Scientific/engineering bonus; Subcomponents: Pay/allowance/benefit :
[Empty].
Major components: Pay/allowance/benefit : * Sea and foreign duty;
Subcomponents: Pay/allowance/benefit : * Duty at certain places; *
Overseas extension pay; * Sea duty.
Major components: Pay/allowance/benefit : * Special duty assignment
pay; Subcomponents: Pay/allowance/benefit : [Empty].
Major components: Pay/allowance/benefit : * Veterinarians;
Subcomponents: Pay/allowance/benefit : * Monthly special pay; *
Diplomate pay.
Pay/allowance/benefit: Relocation; Major components: * Dependent
travel allowance; * Dislocation and departure allowances; * Personal
money allowance; * Storage of personally owned vehicle; Subcomponents:
[Empty].
Major components: Pay/allowance/benefit : * Reimbursement for pet
quarantine fees; Subcomponents: Pay/allowance/benefit : [Empty].
Major components: Pay/allowance/benefit : * Family separation
allowance; Subcomponents: Pay/allowance/benefit : * Afloat; * On
permanent change of station, no government quarters; * On permanent
change of station, dependents not authorized; * On temporary duty.
Major components: Pay/allowance/benefit : * Permanent change of station
travel allowances; Subcomponents: Pay/allowance/benefit : * Accession
travel; * In-place consecutive overseas tours and overseas tour
extension incentive program; * Nontemporary storage; * Operational
travel; * Rotational travel; * Separation travel; * Temporary lodging
facilities; * Training travel; * Travel of organized units.
Major components: Pay/allowance/benefit : * Station allowances,
overseas; Subcomponents: Pay/allowance/benefit : * Cost-of-living,
bachelor; * Cost-of-living, regular; * Interim housing allowance; *
Moving-in housing; * Temporary lodging.
Pay/allowance/benefit: Temporary duty travel allowances; Major
components: * Actual expense allowance; * Miscellaneous reimbursable
expenses (taxi fares, tolls, etc.); * Monetary allowance in lieu of
transportation; * Reimbursement for cost of transportation; *
Subsistence allowance; Subcomponents: [Empty].
Pay/allowance/benefit: Uniform or clothing allowances; Major
components: * Cash clothing replacement; Subcomponents: * Basic; *
Special; * Standard.
Major components: Pay/allowance/benefit : * Extra clothing;
Subcomponents: Pay/allowance/benefit : * Civilian clothing allowances
for officers and enlisted personnel clothing allowances; *
Supplementary; * Temporary duty civilian.
Major components: Pay/allowance/benefit : * Initial clothing;
Subcomponents: Pay/allowance/benefit : * Special initial clothing; *
Standard initial clothing.
Major components: Pay/allowance/benefit : * Miscellaneous clothing
provision; Subcomponents: Pay/allowance/benefit : * Lost or damaged
clothing.
Pay/allowance/benefit: Children and youth programs; Major components: *
Child development system; Subcomponents: * Child development center; *
Family child care; * Resource and referral programs; * School-age care
programs.
Major components: Pay/allowance/benefit : * Youth programs;
Subcomponents: Pay/allowance/benefit : [Empty].
Pay/allowance/benefit: Death and burial benefits; Major components: *
Burial benefits; * Burial costs; * Continued health benefits for
surviving family members; * Continued privileges at commissaries,
exchanges, and other installation facilities for families; * Continued
government housing or housing allowance for families; * Death gratuity
payments; * Dependency and indemnity compensation; * Federal income tax
exemption; * Funeral honors; * Montgomery GI Bill death benefit; *
Payment for unused leave; * Survivor and dependent education;
Subcomponents: [Empty].
Pay/allowance/benefit: Dependent education; Major components: * DOD
dependent schools; * DOD domestic dependent elementary and secondary
schools; Subcomponents: [Empty].
Pay/allowance/benefit: Disability benefits; Major components: *
Disability retired pay; * Disability severance pay; * Veterans Affairs
disability compensation; * Veterans Affairs disability pension;
Subcomponents: [Empty].
Pay/allowance/benefit: Discount shopping; Major components: *
Commissaries; * Military exchanges; Subcomponents: [Empty].
Pay/allowance/benefit: Education assistance; Major components: * Adult
continuing education; * Army and Navy college funds; * Basic skills
education; Subcomponents: [Empty].
Major components: Pay/allowance/benefit : * Commissioning programs;
Subcomponents: Pay/allowance/benefit : * Direct commissioning; *
Officer Candidate School/Officer Training School; * Reserve Officer
Training Corps; * Service academies.
Major components: Pay/allowance/benefit : * Education savings plan; *
Montgomery GI Bill; * Navy College Assistance/Student Headstart; *
Student loan repayment; * Technical/vocational programs; * Tuition
assistance; Subcomponents: Pay/allowance/benefit : [Empty].
Pay/allowance/benefit: Family support services; Major components: *
Chaplains; * Counseling; * Crisis assistance; * Deployment and
mobilization assistance; * Exceptional Family Member Program; * Family
advocacy programs; * Family life education; * Information and referral
services; * Parenting programs; * Personal finance management; *
Relocation Assistance Program; * Sexual Assault Victim Intervention
Program; * Spouse Employment Assistance Program; * Transition
Assistance Program; Subcomponents: [Empty].
Pay/allowance/benefit: Health care; Major components: * TRICARE;
Subcomponents: * Prime; * Extra; * Standard; * Dental plan; *
Prescription plan; * Special needs dependents.
Major components: Pay/allowance/benefit : * Continued health care
benefit program for separating service members; Subcomponents: Pay/
allowance/benefit : [Empty].
Pay/allowance/benefit: Life insurance; Major components: * Service
Members‘ Group Life Insurance; * Supplemental Survivor Benefit Plan; *
Survivor Benefit Plan; * Veterans‘ Group Life Insurance; Subcomponents:
[Empty].
Pay/allowance/benefit: Miscellaneous; Major components: * Adoption
expenses/reimbursement; * Commuting subsidies; * Legal assistance; *
Long-term care insurance; * Space available travel; * Transition
assistance; * Veterans Affairs guaranteed home loan program; * Veterans
Affairs, other; Subcomponents: [Empty].
Pay/allowance/benefit: Paid time off; Major components: * Absence over
leave or liberty; * Administrative absence; * Advance leave; * Annual
leave; * Convalescent leave; * Educational leave of absence; *
Emergency leave; * Environmental and morale leave programs; * Excess
leave; * Graduation leave; * Leave awaiting orders as a result of
disability proceedings; * Leave in conjunction with permanent change of
station; * Leave in conjunction with temporary duty; * Leave travel in
connection with consecutive overseas assignments; * Liberty pass; *
Proceed time; * Public holidays; * Reenlistment leave; * Rest and
recuperation absence for qualified enlisted service members extending
duty at designated locations overseas; * Rest and recuperation program;
* Sick-in-quarters; * Special leave accrual for service members
assigned to hostile fire or imminent danger areas, certain deployable
ships, mobile units, or other duty; * Special liberty pass;
Subcomponents: [Empty].
Pay/allowance/benefit: Privileges at military facilities; Major
components: * Auto, crafts, and hobby shops; * Consolidated package
stores; * Family, youth, and community centers; * Laundry and dry-
cleaning services; * Libraries; * Movie theaters; * Morale, welfare,
and recreation deployment support; * Officer, noncommissioned officer,
and enlisted clubs; * Open messes; * Recreation and fitness facilities
and services; * Transient quarters; Subcomponents: [Empty].
Pay/allowance/benefit: Retirement/savings benefits; Major components:
* Armed forces retirement home; * Continued privileges at military
installations after retirement; Subcomponents: [Empty].
Major components: Pay/allowance/benefit : * Retirement; Subcomponents:
Pay/allowance/benefit : * High-3 plan; * Redux/career status bonus
choice; * Final basic pay.
Major components: Pay/allowance/benefit : * Uniformed services savings
deposit program; * Thrift savings plan; * Travel of family members to
place of retirement; * Travel, shipment, and storage of household goods
for retirees; * TRICARE for retirees and their family members; *
Veterans benefits for retirees; Subcomponents: Pay/allowance/benefit :
[Empty].
Source: GAO analysis.
[End of table]
[End of section]
Appendix II: Demographic Trends in the Active Duty Military:
This appendix shows demographic changes that have occurred in the
active duty military since 1973, when the draft ended and the military
became an all-volunteer force. The appendix also shows selected
demographic changes that have occurred in the U.S. civilian labor
force. In cases where data was not available going back to 1974, we
went back as far as possible.
The active duty force has undergone several demographic changes since
the military became an all-volunteer force in 1973. It has become older
and better educated, and it has seen increases in the representation of
minority and female service members (see figs. 3-5).
Figure 3: Composition of the Active Duty Force by Age Group
(1974-2000):
[See PDF for image]
Note: Percentages may not add to 100 due to data coded as ’unknown.“:
Source: GAO analysis of DOD data.
[End of figure]
Figure 4: Education Levels of the Active Duty Force (1974-2000):
[See PDF for image]
Note: Data excludes warrant officers.
Source: GAO analysis of DOD data.
[End of figure]
Figure 5: Minority and Female Representation in the Active Duty Force
(1974-2000):
[See PDF for image]
Note: Minority groups include African-American, Hispanic, Native
American/Alaskan Native, and Asian-American/Pacific Islander.
Source: GAO analysis of DOD data.
[End of figure]
Some of the demographic changes in the active duty military generally
reflect trends in the U.S. civilian labor force during this time period
(see figs. 6-8).
Figure 6: Median Age of Employed U.S. Civilians (1974-2000):
[See PDF for image]
Source: GAO analysis of Bureau of Labor Statistics data.
[End of figure]
Figure 7: Education Level of U.S. Civilian Labor Force (1992-2000) :
[See PDF for image]
Note: The Bureau of Labor Statistics did not track this data prior to
1992.
Source: GAO analysis of Bureau of Labor Statistics data.
[End of figure]
Figure 8: Minority and Female Representation in the U.S. Civilian Labor
Force (1974-2000):
[See PDF for image]
Note: Data for minorities includes workers who are black or of Hispanic
origin.
Source: GAO analysis of Bureau of Labor Statistics data.
[End of figure]
Although reliable data on married military personnel is not available
for 1973-77, various DOD studies cite statistics showing that the
percentage of married enlisted personnel increased from approximately
40 percent of the force in 1973 to approximately 50 percent in 1977.
After dropping slightly from 1977 to 1980, the enlisted marriage rate
rose again through the mid-1990s. The overall marriage rate--including
both enlisted personnel and officers--has remained at 50 percent or
higher since 1980 (see fig. 9).
Figure 9: Marriage Rates in the Active Duty Military (1980-2000):
[See PDF for image]
Source: DOD.
[End of figure]
In the U.S. civilian labor force, the proportion of married workers
decreased between 1974 and 2000 (see fig. 10).
Figure 10: Marriage Rates in the U.S. Civilian Labor Force (1976-2000):
[See PDF for image]
Source: GAO analysis of Bureau of Labor Statistics data.
[End of figure]
[End of section]
Appendix III: Selected Employee Benefits for Active Duty Service
Members:
This appendix summarizes selected benefits that the federal government
provides to active duty service members and their dependents. DOD lacks
an authoritative listing of its employee benefits. To compile this
list, we drew from several sources, including DOD and service
directives, background papers, studies, and Web sites.
Child and Youth Programs:
Child Development System:
Members with children or custodial rights can obtain child care through
a variety of DOD-sponsored programs tailored for children ages 6 weeks
to 12 years. These programs include accredited, centralized on-
installation care; on-or off-installation in-home care by certified
providers (usually military spouses) as well as extended hour, ill-
child, and hourly care; before-and after-school programs and holidays
and summer vacation care for school-age children; and resource and
referral programs. The government subsidizes many care options. The
military services may offer discounts of up to 20 percent to service
members who have more than one child enrolled in centralized on-
installation care.
Exceptional Family Member Program:
The Exceptional Family Member Program is a mandatory enrollment program
for active duty members with family members who have exceptional
medical needs or learning disabilities that require special medical
treatment, education, or counseling. The primary goal of the program is
to assist service members in providing for the special needs of their
exceptional family members before, during, and after relocation
required by the change of duty assignment. Although support varies by
installation, typical programs help families access and use various
medical and social services and educational programs, obtain
information and referrals, coordinate assignments, and confirm the
availability of required services when reassigned. In January 2001, DOD
launched an Internet site, the Special Needs Network, to help members
and their families research assignments and connect with care
coordinators and service providers.
Youth Programs:
Youth programs provide service members‘ children ages 12 to 18
with social, recreation, and athletic programs at more than 470 youth
facilities at 280 geographic locations worldwide. Military youth may
participate in 4-H, Boys and Girls Clubs activities, and team sports,
as well as activities such as parties, support groups, and community
services offered through teen centers. In addition, a youth sponsorship
program, supplemented by a military teen Web site--Military Teens on
the Move--helps military youth acclimate to frequent relocations. DOD
recently expanded its youth program to focus on school-age care, at-
risk behaviors, and prevention programs.
Death and Burial Benefits:
Burial Benefits:
The Department of Veterans Affairs will provide a casket, a government
headstone or marker, and a burial flag at no cost to a deceased service
member or veteran. In addition, service members and veterans who have
completed service requirements are eligible for burial in a Department
of Veterans Affairs national cemetery. Reserve component members
entitled to retired pay as a result of 20 years of creditable service
are also eligible, as are spouses and minor children of eligible
veterans and service members. The National Defense Authorization Act
for Fiscal Year 2002 authorizes a travel allowance for family members
to attend burial ceremonies for deceased members who die while on
duty.[Footnote 26]
Burial Costs:
DOD reimburses up to $4,850 for a member‘s burial expenses, depending
on the type of arrangements. DOD also provides travel for next of kin.
In addition, the Department of Veterans Affairs will pay a burial
allowance of up to $2,000 if the veteran‘s death is service-connected.
In some cases, it also will pay the cost of transporting the remains of
a service-disabled veteran to the national cemetery with available
gravesites that is nearest the home of the deceased. In certain
instances, the Department of Veterans Affairs will pay a $300 plot
allowance when a veteran is buried in a cemetery that is not under
U.S. jurisdiction.
Continued Health Benefits for Surviving Family Members:
Surviving family members of a deceased active duty service member
remain eligible for health care benefits under TRICARE at active duty
dependent rates for a 3-year period following the service member‘s
death.[Footnote 27] According to DOD, they may choose to enroll or
remain enrolled in TRICARE Prime, where available, with no enrollment
fees and no cost-shares or deductibles. At the end of the 3-year
period, their TRICARE eligibility continues at the retiree dependent
rates.
Continued Military Privileges for Surviving Family Members:
The unmarried surviving spouse and qualified dependents of a deceased
member are eligible for unlimited shopping privileges at military
commissaries and exchanges. Survivors of a service member who dies
while on active duty are provided rent-free government housing for
180 days after the death of the service member or a tax-free housing
allowance for that portion of the 180-day period when they are not in
government housing. The amount of the allowance is based on the
member‘s grade at the time of death.
Death Gratuity Payments:
Survivors of a service member who dies while in active service and
retirees who die within 120 days of retirement as a result of a
service-connected injury or illness receive an immediate cash payment
of $6,000. This payment is to assist in meeting financial needs before
survivor benefits, if any, become available.
Dependency and Indemnity Compensation:
The Department of Veterans Affairs provides a monthly nontaxable
payment to the unremarried surviving spouse of a service member who
dies from a service-connected disability. Payment also may be provided
to a member‘s unmarried children under age 18, to children between ages
18 and 23 if attending a Veterans Affairs-approved school, to disabled
children, and to the parents of a deceased service member if they meet
certain income requirements. The surviving spouse of a service member
who died after January 1, 1993, receives $935 a month, plus $234 for
each dependent child. The monthly payment for parents of deceased
veterans varies with their income.
Funeral Honors:
DOD provides an honor guard detail for the burial of an eligible
veteran, folding and presentation of the American flag to the next of
kin, and playing of ’Taps“ during the burial of current and former
active duty and Selected Reserve members.
Montgomery GI Bill Death Benefit:
The Department of Veterans Affairs will pay a designated survivor a
special Montgomery GI Bill[Footnote 28] cash death benefit in the event
of the service-connected death of an individual while he or she is on
active duty or within 1 year after his or her discharge or release. The
deceased must either have been entitled to educational assistance under
the Montgomery GI Bill program or have been a program participant who
would have been entitled, except for the high school diploma or length-
of-service requirement.
Survivor and Dependent Education:
Surviving spouses and children are eligible for up to 45 months of
education benefits to be used for associate, bachelor, or graduate
degrees; courses leading to a certificate or diploma from business,
technical, or vocational schools; and apprenticeships. Payments to a
spouse end 10 years from the date the individual is found eligible or
from the date of the death of the veteran. Spouses who have passed the
period of eligibility may be eligible for education loans. During the
first 2 years after the end of their eligibility period, eligible
spouses may borrow up to $2,500 per academic year to continue a full-
time course leading to a college degree or to a professional or
vocational objective that requires at least 6 months to complete.
Children are eligible to receive education benefits between their 18th
and 26th birthdays. Monthly payments of $670 for full-time attendance
at educational institutions and lesser amounts for part-time attendance
are available. Loans are based on financial need.
Tax Benefits:
When a member of the Armed Forces dies while in a combat zone in active
service, or as a result of wounds, disease, or injury while so serving,
special tax forgiveness rules apply. Additionally, special favorable
tax rules apply when an individual dies as a result of wounds or injury
that was incurred outside the United States in a terroristic or
military action.[Footnote 29] Generally, benefits received from the
Department of Veterans Affairs by a survivor of a deceased member are
exempt from levy by the United States or any agency thereof with
respect to indebtedness the deceased may have had to the United
States.[Footnote 30]
Unused Leave:
Survivors of a deceased member are entitled to payment for the
deceased‘s unused accrued leave, if any. The amount of the payment is
based on the member‘s basic pay at the time of death.
Disability:
Veterans Disability Compensation:
The Department of Veterans Affairs offers tax-free monthly payments
to a member who has a service-connected disability. The amount of the
payment varies based on the extent of disability, the veteran‘s marital
status, and the number of dependents. In 2002, monthly payments
ranged from $103 to $2,163 plus allowances for spouse and children
where applicable.
Veterans Disability Pension:
The Department of Veterans Affairs offers monthly payments to eligible
wartime veterans with limited income, a permanent disability, and an
inability to work. Payments vary according to the veteran‘s income,
number of family members, and capacity for self-care. If a veteran is
receiving any income, an equivalent offset is subtracted from this
payment. The annual basic pension for a single veteran in 2002 was
$9,556. A veteran with one dependent received $12,516. For each
additional dependent, the pension increased by $1,603.
DOD Disability Retirement Pay:
A service member may qualify for disability retirement pay if the
member has a permanent and stable disability that is not the result of
intentional misconduct or willful neglect and the member has at least
20 years of service. If the member does not have 20 years of service,
the member may still qualify for disability retirement if the
disability is at least 30 percent and meets certain other
criteria.[Footnote 31]
DOD Disability Severance Pay:
Members with less than 20 years of active service who are separated
from active duty because of service-connected minor disabilities are
eligible to receive a lump-sum payment. This lump-sum payment is
directed at members who are less than 30 percent disabled and
physically unable to perform the military duties of their respective
office or grade. Payments are based on 2 months‘ basic pay for each
year of active service, not to exceed 12 years‘ basic pay.[Footnote 32]
Discount Shopping:
Commissaries:
Active duty service members, their dependents, and retirees can
purchase discounted grocery items at more than 280 commissaries
worldwide. Because commissaries sell food and household items free of
local sales tax and at cost, plus a 5-percent surcharge to help defray
operational expenses, customers can save more than 30 percent on their
purchases compared to commercial supermarkets. According to DOD, a
family of four can save about $2,400 annually by shopping at
a commissary.
Military Exchanges:
Active duty service members, their dependents, and retirees may
purchase a variety of goods and services at 1,522 military exchanges
worldwide. Exchanges are similar to department stores, selling apparel,
footwear, household appliances, jewelry, cosmetics, food, and other
merchandise. Some exchanges offer gas stations, florist shops, optical
shops, fast food restaurants, and liquor stores.
Education Assistance:
Education Savings Plan:
The National Defense Authorization Act for Fiscal Year 2002 authorized
service secretaries to establish an education savings plan.[Footnote
33] Service members who sign up for at least another 6 years of active
duty in a critical skill area may receive a bonus of $5,000 to $30,000
in U.S. savings bonds. Generally, service members who have completed
fewer than 3 years of service and who commit to at least 6 years of
additional service are eligible to receive savings bonds worth $5,000;
service members who have completed between 3 and 9 years of service and
make the requisite service commitment are eligible to receive savings
bonds worth $15,000; and service members who have completed 9 years of
service are eligible to receive savings bonds worth $30,000 after
committing to the required additional service.
Montgomery GI Bill:
The Montgomery GI Bill[Footnote 34] provides educational assistance to
active duty members and veterans who enter active duty after June 30,
1985. Members may use the assistance for degree and certificate
programs, as well as for on-the-job training and correspondence
courses.[Footnote 35]
Eligible individuals upon first becoming members of the Armed Forces or
first entering on active duty contribute $1,200 through basic pay
reductions of $100 per month during their first 12 months of service
unless they make an election not to receive educational assistance
under the program.[Footnote 36]
Members who choose not to participate in the program must formally
decline enrollment and, with some exceptions, cannot enroll in the
program at a later time. Veterans must receive an honorable discharge
to continue to participate. Educational benefits are available while on
active duty after meeting active duty service requirements and
generally for up to 10 years after a veteran‘s discharge from active
duty.[Footnote 37] The amount of payment of educational assistance
varies depending on the obligated period of active duty upon which the
entitlement is based.[Footnote 38]
The National Defense Authorization Act for Fiscal Year 2002 authorizes
the service Secretaries to allow a service member with critical skills
or in a military specialty requiring critical military skills who has
served a minimum of 6 years and who agrees to serve for at least 4
additional years to transfer up to 18 months of unused basic Montgomery
GI Bill educational benefits to his or her spouse or children. A
service member‘s spouse may use transferred benefits after the member
completes the 6 years of service in the Armed Forces. A member‘s child
who is at least 18 years old or has a high school diploma may use
transferred benefits after the parent completes 10 years of service in
the Armed Forces. [Footnote 39]
Voluntary Education:
An active duty member who voluntarily enrolls for education or training
in an educational institution during off-duty time may receive tuition
assistance. While the services can pay all or a portion of tuition
costs or expenses, service members may use a portion of their
Montgomery GI Bill benefits to pay for the remaining tuition.
Commissioned officers are not eligible for this benefit unless they
agree to remain on active duty for a period of 2 years after the
completion of the training or education paid for.[Footnote 40]
Family Support Services:
Deployment and Mobilization Support:
Deployment and mobilization support programs help service members and
their families prepare for and cope with the challenges associated with
mobilization, remote assignments, and deployments. Programs address a
range of issues that may arise prior to, during, and upon return from
deployments. Programs may include briefings on available support
services; free telephone, video electronic mail, and teleconferencing
calls; and benefits such as a free oil change for the family‘s personal
vehicle. Upon return from deployment, commanders may elect to provide
workshops to help members and their families readjust to life together.
Family Advocacy Programs:
Family Advocacy Programs assist members and their families with
problems resulting from spouse and child abuse, child neglect, and
child sexual molestation. These programs offer prevention,
intervention, and treatment resources at no cost to military family
members.
Parenting Programs:
Parenting programs help military families address specific problems,
teach and build skills, enhance family self-sufficiency, and prevent
child abuse. These voluntary programs include parent education classes
as well as parent support groups. Two core parenting classes are the
New Parent Support Program and the Healthy Parenting Initiative. Aimed
at first-time parents, the New Parent Support Program offers home
visits by nurses who can answer parents‘ questions about infant care.
The Healthy Parenting Initiative provides resources to deal with
stressors such as frequent deployments, intermittent single parenting,
and separation from extended family support networks.
Personal Financial Management Program:
The Personal Financial Management Program provides financial education,
training, and counseling to members and their families in the areas of
personal finance, budgeting, debt management, and retirement planning.
Relocation Assistance Program:
The Relocation Assistance Program helps active duty service members and
their families prepare for moves and adjust to life at new
installations. The program provides pre-move destination information,
relocation counseling, and settling-in services. Members located
overseas may also obtain intercultural training. Typical programs
address information on the shipment and storage of household goods,
financial planning, permanent change of station entitlements, and child
care. A special Web site provides information about more than 300
military installations. The services may offer additional seminars and
programs tailored to members‘ needs. Such programs include information
seminars for spouses and new military families and the loan of
household items for use prior to the arrival of personal
household goods.
Spouse Employment Assistance Program:
The Spouse Employment Assistance Program provides information and
referral services to military spouses to facilitate their employment in
the civilian labor market. These services address various aspects of
the job search and career planning process, the acquisition of skills
that will facilitate entrance into the workforce, and the development
of portable careers. Military spouses also may receive preferential
consideration for competitive service positions in DOD located outside
the United States and preference for hiring in positions in
nonappropriated fund activities. Additionally, spouses of members may
receive preference in hiring for any position in DOD above grade GS-7
if the spouse is among persons determined to be best qualified for the
position and if the position is located in the same geographical area
as the permanent duty station of the member.[Footnote 41]
Transition Assistance Program:
The Transition Assistance Program provides services to departing
military members to help them adjust to civilian life and obtain jobs.
Services include employment assistance, leave, and relocation
assistance for personnel overseas. Members and their families are
eligible to use these services for up to 180 days after separation. In
2001, DOD launched a Web site that offers courses on conducting job
searches, writing resumes, and using the Internet to find jobs.
Health Care:
Continued Health Care Benefit Program:
Members leaving the military before retirement can purchase health care
benefits to cover medical bills incurred by them and their families
while between jobs. The Continued Health Care Benefit Program mirrors
TRICARE Standard medical coverage. Members who enroll in the program
within 60 days after separation from active duty or loss of eligibility
for military health care can purchase coverage for up to 18 months for
themselves and dependents and up to 36 months for others such as
unmarried former spouses.
Dental:
Active duty service members are entitled to dental care in more than
400 military dental treatment facilities on a space available basis. If
care is unavailable either because the member is remotely located or
because unavailable specialty care is needed, civilian dentists may
provide care. Family members may enroll in the TRICARE Dental Program,
which requires monthly premiums and copayments. For example, basic
restorative services, such as fillings, are covered at 80 percent, and
the family member is responsible for the remaining 20 percent of costs.
It allows up to $1,200 per year for general dentistry and a lifetime
orthodontic maximum of $1,500 for each enrollee. The dental program
covers a wide range of diagnostic, preventive, and restorative
services, including dental x-rays, exams, cleaning, fluoride
applications, fillings, root canals, and crowns.
TRICARE:
DOD provides health care to active duty members and their dependents
through TRICARE, a managed care program. Care is provided in more than
500 military treatment facilities worldwide, supplemented by civilian
providers. TRICARE offers beneficiaries three health care options:
Prime, Standard, and Extra. Active duty personnel are required to
enroll in TRICARE Prime. This program offers care in military treatment
facilities and does not require enrollment fees or copayments from
active duty beneficiaries for care or drugs obtained from military
treatment facilities.
Dependents may choose to enroll in TRICARE Prime where available or may
elect to receive care under TRICARE Extra, a preferred provider option,
or under TRICARE Standard, a fee-for-service option. Beneficiaries
obtaining care under Extra and Standard are subject to deductibles and
a cost share of 15 or 20 percent, depending on the program enrolled.
They may also be subject to a $3 charge for generic drugs and a $9
charge for brand name drugs purchased from the national mail order
pharmacy or at retail network pharmacies. The charge for nonnetwork
pharmacies is the greater of $9 or 20 percent of total cost. The
National Defense Authorization Act for Fiscal Year 2002[Footnote 42]
requires the Secretary of Defense to establish a program to provide
extended benefits to eligible dependents which may include benefits for
dependents who are mentally retarded, have a serious physical
disability, or have an extraordinary physical or psychological
condition. These extended benefits may include comprehensive health
care services and case management services.
Housing:
Military members are eligible to receive one of three types of housing,
depending on their rank, marital status, and whether they reside on-or
off-installations. Military personnel who have one or more family
members living with them are eligible to apply for and occupy military
family housing located on installations. Single junior-enlisted members
are required to live in barracks where they may share a room with a
communal bathroom and telephone down the hall. Military members living
off of installations are entitled to a basic housing allowance in order
to be able to afford housing in the local civilian housing market. This
allowance is determined by the member‘s pay grade and dependency status
as well as the cost of suitable civilian housing for the member‘s
income level in the geographic area. Members stationed overseas who are
not furnished government housing are eligible for an overseas housing
allowance based on dependency status.
Life Insurance:
Service Members‘ Group Life Insurance:
Service members‘ Group Life Insurance is a government-sponsored program
that provides insurance coverage to members of the Armed Forces. Under
the program, active duty members and others automatically are insured
for $250,000. Members may elect less coverage or no coverage. The
premium rate, as set by the Secretary of Veterans Affairs, is $20 a
month for the maximum $250,000 coverage. Monthly premiums for less than
the maximum coverage are $0.80 per $10,000. Beginning in November 2001,
coverage was extended to members‘ spouses and children.[Footnote 43]
Service members may purchase up to $100,000 coverage for spouses, but
no more coverage than is held by the service member. Premiums for
spouse coverage vary based on actuarial principles. Coverage for
eligible dependents is free and automatic.
Survivor Benefit Plan:
The Survivor Benefit Plan provides members who reach retirement
eligibility an opportunity to leave a portion of their retired pay to
their survivors. The plan complements social security survivor benefits
with a monthly annuity payment to eligible spouses and dependents.
Payments equal 55 percent of what the members‘ retired pay would have
been had they been retired. When survivors reach the age of 62,
payments drop to 35 percent of retired pay. Payments are offset by
Dependency and Indemnity Compensation and are adjusted annually for
cost-of-living increases. Under the National Defense Authorization Act
for Fiscal Year 2002, surviving spouses of some active duty service
members are also authorized to receive Survivor Benefit Plan
benefits.[Footnote 44]
Veterans‘ Group Life Insurance:
Veterans‘ Group Life Insurance provides a maximum of $250,000 renewable
5-year coverage for members released from active duty. Service members‘
Group Life Insurance may be converted to this plan. Conversion is
available to members who have full-time Service members‘ Group Life
Insurance coverage as well as those with part-time coverage under
certain conditions that render them uninsurable at standard premium
rates. Members of the Individual Ready Reserve and Inactive National
Guard may also enroll. Coverage is limited to the maximum amount of
Service members‘ Group Life Insurance held while the service member was
on active duty or in the Reserves. Veterans‘ Group Life Insurance
premiums range from $11 to $84 per month per $100,000 in coverage,
varying with the service member‘s age.
Miscellaneous:
DOD Dependent Schools:
Children of active duty service members can obtain free elementary
through high school education at schools located on installations in
the United States and overseas. DOD Dependent Schools educate more
than 76,000 military children in 154 schools in 13 countries. Seventy
Domestic Dependent Elementary and Secondary Schools at 17 installations
located in seven states, Guam, and Puerto Rico educate more than 34,000
military children.
Legal Assistance:
Service members and their families can receive free legal advice and
assistance from judge advocates or civilian attorneys for many
personal, noncriminal matters. These matters include personal tax
questions; adoption assistance; child and spouse support; wills,
estates, and trusts; debts and bankruptcy; notary public services;
leases; and advice on Soldier and Sailors‘ Civil Relief Act[Footnote
45] protection.
Department of Veterans Affairs Guaranteed Home Loan Program:
Members may obtain guaranteed home loans from the Department of
Veterans Affairs in order to purchase homes, make home improvements,
and refinance home loans. These loans require no down payments, limit
closing costs, provide for assumable mortgages, and allow prepayment
without penalty. The Department of Veterans Affairs guarantees
25 percent of home loans up to $50,750; 40 percent of home loans up to
$36,000; and 50 percent of home loans up to $45,000, subject to the
amount of the entitlement that the veteran has available. An active
duty veteran who buys a home pays a funding fee ranging from 1.25 to
3 percent of the loan amount depending on the amount of the down
payment and whether the member has other Veterans Affairs loans.
Privileges at Military Facilities (Morale, Welfare, and Recreation):
Service members and their families have access at installations to
morale, welfare, and recreation programs that are aimed at meeting
their physical, social, and cultural needs. These programs include
fitness centers, golf courses, movie theaters or free movies,
automotive skills development, crafts and hobby programs, guest
quarters, swimming pools, enlisted clubs, game rooms and arcades,
coffeehouses, intramural sports, bowling centers, libraries, chapels,
rifle and pistol ranges, outdoor recreation, and exchanges,
commissaries, and discounts on special events and off-installation
recreation areas.
Transportation Incentive Program:
Active duty service members may be eligible to receive reimbursements
of up to $100 per month for transportation expenses associated with
using public transportation and van pools when commuting to and
from work.
Space Available Travel:
Space Available Travel permits military members and their families to
travel free or for a small fee on military transportation, space
permitting. Family members may use this benefit to accompany an active
duty service member on immediate family emergencies and on house-
hunting trips related to a pending permanent change of station move.
Paid Time Off:
Annual leave:
Members accrue leave at the rate of 2-1/2 days per month of active
service. Members may not accumulate more than 60 days of leave as of
the end of the fiscal year except when they enter a duty type or
situation during which it is unlikely that leave may be used.
Convalescent Leave:
Service members who are determined unfit for duty by their commanding
officer or hospital command receive leave for a period of up to 30 days
per hospitalization. Following pregnancy, service members normally
receive 42 days (6 weeks) leave per a doctor‘s instructions.
Educational Leave of Absence:
Eligible members may use up to 2 years of leave to pursue an
educational program. Although members continue to receive basic pay for
their applicable pay grades and to accrue leave, they do not receive
housing or other allowances.
Graduation Leave:
Graduates of the military academies may be granted leave of not more
than 60 days to be used within 3 months of graduation and before
reporting for permanent duty. This leave does not count against the
officer‘s annual leave.
Public Holidays:
Except when prevented by military operations, members observe U.S.
public holidays as established by federal statutes.
Sick-in Quarters:
Members may be excused from duty for treatment or medically directed
self-treatment in homes, barracks, or other nonhospital facilities.
This leave does not count against annual leave.
Retirement and Savings:
Retirement:
Military members presently are covered by one of three separate
retirement systems, depending on when they joined the military. All
three systems require no contribution from the service member, allow
retirement after 20 years of service, and have no vesting before
20 years. Benefits received are based on years of service and salary.
Service members who joined the military before September 8, 1980, are
covered under the Final Pay plan. This plan bases retired pay on final
basic pay multiplied by 2.5 percent per year of service less any excess
over:
75 percent of pay upon which the computation is based.[Footnote 46]
Service members who joined the military after September 7, 1980, and
before August 1, 1986, receive retirement benefits under the High-3
plan. High-3 gives members (1) 50 percent of their average basic pay
for the highest 3 earning years before retiring at 20 years of service
and (2) an additional 2.5 percent for each year beyond 20 years of
service, to a maximum of 75 percent for 30 years of service. Members
who joined the Armed Forces after July 31, 1986, may choose between the
High-3 Plan and a revised retirement plan enacted under the Military
Retirement Reform Act of 1986[Footnote 47] (sometimes referred to as
Redux) upon reaching their 15th year of service. Under Redux, a member
who elects to receive a bonus and signs a written agreement to remain
on active duty until the member has completed 20 years of active duty
service will receive a $30,000 lump-sum bonus, and must remain in the
Redux plan.
Thrift Savings Plan (Uniformed Services Plan):
Service members may contribute up to 7 percent of their basic pay in
the Thrift Savings Plan, a retirement savings and investment program
that offers participants the same type of savings and tax benefits that
many private corporations offer their employees under ’401(k)“ plans.
The retirement income that service members receive from their accounts
depends on the amount contributed during working years and the earnings
on these contributions. Service members may contribute a portion of
their monthly base pay up to the 2002 Internal Revenue Service limit of
$11,000 to any or all of five funds. Service members enrolled in the
plan may also contribute any amount of incentive pay or special pay,
including bonuses. Service members serving in critical military
specialties, as designated by service Secretaries, and who agree to
serve on active duty for 6 years are eligible to receive matching
contributions of up to 4 percent of basic pay. The government matches
each of the first 3 percent and half of the next 2 percent.
[End of section]
Appendix IV: Trends in Selected Private-Sector Employee Benefits:
This appendix summarizes trends in selected employee benefits offered
by medium and large U.S. employers to their full-time
employees.[Footnote 48] To compile this list, we drew from several
sources, including the U.S. Bureau of Labor Statistics‘ Monthly Labor
Review (1989-1991 and 1999-2001), Compensation and Working Conditions
(1996-1998 and 2000), and Employee Benefits in Medium and Large Private
Establishments (1995 and 1997); surveys conducted by human resources
consulting firms;[Footnote 49] and our interviews with representatives
from nine companies that have been recognized as innovative or
effective in strategically managing their human capital. Although the
studies we reviewed covered different time periods, surveyed different
employer populations, and asked different questions--thereby resulting
in conflicting data on the prevalence of benefits--their findings
generally concur on trends related to specific employee benefits.
Accidental Death and Dismemberment:
Accidental death and dismemberment coverage provides benefits in
addition to existing group life insurance if a covered worker dies or
is injured as a result of an accident. Coverage is almost always a
component of group life insurance. However, employees who have the
option to choose their benefits through a flexible benefits program may
be able to receive accidental death and dismemberment coverage without
life insurance. Accidental death and dismemberment benefit payments
usually equal 100 percent of a worker‘s basic life insurance. Plans
also may pay partial benefits for the accidental loss of an eye, a leg,
or an arm. In 1999, 57 percent of employees in medium and large
U.S. companies had accidental death and dismemberment coverage compared
with 69 percent in 1993.
Child Care Assistance:
Employers sponsor a variety of programs to assist employees with child
care responsibilities. The range of corporate-sponsored child care has
continued to grow since the 1980s and now includes on-and off-site
child care, emergency, sick, and backup child care services when
regular child care is unavailable; care for mildly ill children or when
schools are closed due to holidays; referral services; and dependent
care flexible spending accounts, among other programs. A survey
conducted by a human resources consulting company found that, in 2000,
dependent care flexible-spending accounts were the most prevalent form
of child care assistance, followed by employer-sponsored child care
resource and referral services. Five of the nine companies we contacted
offered employees flexible spending accounts for dependent care. In
1999, 10 percent of employees at medium and large companies had access
to employer-sponsored or -funded child care either on-site or off-site.
Few companies--mainly very large corporations--offer before and after
school care, care during holidays and vacations, or care for mildly ill
children.
Convenience Benefits:
Convenience benefits are services and products provided at the
workplace in order to allow employees to perform errands conveniently
and efficiently, thus helping them better balance their work and home
responsibilities. Some convenience benefits have existed for some time,
while others have been implemented only recently. Examples include
health promotion programs, on-site credit unions, dry cleaning
services, cafeterias, take-home meals, minor automotive servicing, and
commuting assistance.[Footnote 50] The prevalence of these services
varies by type. For example, in 2000, 25 percent of employers
subsidized employees‘ parking and mass transit costs through commuter
assistance programs, according to a human resources consulting firm. In
comparison, 66 percent of employers provided on-site credit unions, and
76 percent provided health promotion programs in 2000.
Elder Care Assistance:
An emerging benefit, elder care assistance, consists of time off--paid
or unpaid leave--to care for an elderly dependent, employer-paid or
sponsored adult day care, and resource and referral information. The
percentage of employers offering elder care assistance has increased
since the 1990s in part due to the aging workforce and the passage of
the Family and Medical Leave Act of 1993,[Footnote 51] which requires
employers to provide up to 12 weeks of unpaid, job-protected leave to
eligible employees so they may care for a parent who is seriously ill.
In 1993, 31 percent of employees were eligible for some form of elder
care benefits, compared with 3 percent in 1989. A human resources
consulting firm found that 43 percent of surveyed companies offered
elder care resource and referral programs in 2000, up from 27 percent
in 1998. The Family and Medical Leave Act of 1993 applied to all nine
companies we contacted; however, none offered paid time off to care for
family members.
Employee Assistance Programs:
Employee assistance programs provide information and referrals to help
employees cope with alcohol and substance abuse, family problems,
stress, and psychiatric problems. An increasing number of programs also
provide information and counseling services related to financial
planning, legal assistance, pre-marriage and marriage counseling,
college planning, and spouse job placement assistance for relocation.
Four of the nine companies we contacted offered employee assistance
programs that included counseling and referral services. According to
the Bureau of Labor Statistics, 54 percent of employees had access to
employee assistance programs in 1999.
Flexible Benefits:
Flexible benefits, also called cafeteria plans, allow employees to
tailor their benefit packages to their specific needs. Companies use
flexible benefits as one approach to meet the needs of their
increasingly diverse workforces, while containing costs. Flexible
benefits allow employees to choose among plans within a given benefit
area or to design individual benefit packages by selecting specific
benefits from among several types. Employees may choose from a variety
of health care and life insurance options, various levels of sickness
and accident insurance, long-term disability insurance, additional
vacation and sick leave days, dependent care, adoption assistance, and
legal assistance benefits. According to the Bureau of Labor Statistics,
the percentage of employees in medium and large companies with access
to flexible benefits increased from 5 percent in 1988 to 13 percent
in 1999.
Flexible Spending Accounts:
Some companies permit employees to allocate funds for dependent care
expenses, health care deductibles, coinsurance, and other costs not
covered by health care plans through flexible spending accounts. These
accounts provide employees with a pretax savings account into which
employees deposit a defined amount of money each pay period. According
to the Bureau of Labor Statistics, the percentage of employees in
medium and large companies eligible for flexible spending accounts
increased from 12 percent in 1988 to 21 percent in 1999. Eight of the
nine companies we contacted offered flexible spending accounts to
offset child or health care expenses.
Flexible Work Arrangements:
Flexible work arrangements give employees greater flexibility in
choosing the times that they begin and end their workdays and weekly
schedules. Common types of flexible schedules include job sharing,
telecommuting, flexible work hours, compensatory time arrangements, and
gliding schedules that require a specific number of hours of work each
day but permit employees to vary their arrival and departure times.
According to the Bureau of Labor Statistics, in 1997 approximately
28 percent of full-time employees had flexible work schedules--almost
double the percentage in 1985. A survey by a human resources consulting
firm showed increases in the prevalence of various flexible work
options between 1998 and 2000. The survey showed, for instance, that
the percentage of employers offering compressed work weeks increased
from 42 to 50 percent, telecommuting on a regular basis increased from
30 to 44 percent, and flextime increased from 36 to 45 percent.
Life Insurance:
Life insurance provides designated beneficiaries with cash payments on
the death of a family member or other individual. Group life insurance
coverage for employees is a standard part of most employee benefit
packages. Plan coverage is most commonly one to two times base salary,
up to certain dollar limits. The percentage of full-time employees in
medium and large companies that participated in employee-sponsored life
insurance plans decreased from 94 percent in 1989 to 70 percent in
1999. A 2001 survey by a human resources consulting firm found that
94 percent of the organizations surveyed offered employer-paid life
insurance for their employees. All nine of the companies we surveyed
offered life insurance to their employees. At some companies, employees
have the option of purchasing supplemental life insurance that provides
additional coverage. Employees usually pay the entire cost of the
supplemental insurance premiums.
Although few employers pay for life insurance for spouses or
dependents, some employers offer voluntary life insurance for these
groups. Generally, employees pay the full cost of this benefit,
purchasing a minimum of $10,000 for spouse coverage and between $5,000
and $10,000 for each dependent child. In 2000, 72 percent of employers
surveyed by a major human resources consulting firm offered this
benefit, compared with 64 percent in 1996. Eight of the nine companies
we contacted extend life insurance coverage to their employees‘ spouses
and dependents.
Living benefits are increasingly popular. They provide a portion of
life insurance benefits to employees who have terminal or long-term
illnesses. When offered, this benefit is commonly a standard component
of group life insurance policies rather than an optional benefit rider.
According to a major human resources consulting firm, the prevalence of
this benefit increased from 40 percent in 1998 to 46 percent in 2000.
Long-Term Care Insurance:
Employer-sponsored long-term care insurance is an emerging but still
relatively rare benefit that provides coverage for employees, their
spouses, and less frequently for parents and grandparents. Long-term
care insurance policies pay for all or part of long-term custodial and
maintenance care provided for a period generally longer than 30 days to
individuals with functional impairments that inhibit total independent
living. Services are provided by nursing homes and assisted living
facilities, as well as through home health care, hospice, and respite
care. Although less common, some policies may cover physical, speech,
occupational, and respiratory therapies. Employers may offer this
coverage to employees on a voluntary basis, requiring employees to pay
the entire premium, but at group rates. Premiums vary by age, with
older employees paying more than younger employees. Policy costs can
increase if employees select optional inflation protection that
automatically increases future benefits based on a schedule. According
to an insurance association, the number of employers offering long-term
care insurance as an employee benefit increased from 135 in 1990 to
about 3,200 in 1999. However, a 1999 study estimated that only 6 to
9 percent of eligible employees took advantage of employer-provided
group long-term care insurance where it was available.[Footnote 52] In
2002, federal employees, active duty service members, selected Reserve
members, retirees, and qualified family members became eligible to
obtain long-term care insurance through the federal government.
Health Insurance:
Employers typically offer several types of health care insurance plans.
The three most common types of plans are health maintenance
organizations, fee-for-service, and preferred provider organizations.
According to the Bureau of Labor Statistics, 76 percent of full-time
employees in medium and large firms were covered by their employer‘s
medical care plan in 1997. Of these employees, 33 percent were enrolled
in health maintenance organizations, up from 17 percent in 1991;
40 percent were enrolled in preferred provider organizations, compared
with 16 percent in 1991; and 27 percent were enrolled in fee-for-
service plans in 1997, compared with 67 percent in 1991.
Traditionally, employers have subsidized health insurance heavily.
However, employees increasingly are paying a greater portion of
premiums or copayments and deductibles. According to the Bureau of
Labor Statistics, 75 percent of all full-time employees participating
in medical plans in 1999 were required to contribute toward the cost of
individual coverage, compared with 51 percent in 1991. Eighty-
one percent of all employees were required to contribute to the cost of
family coverage in 1999, compared with 69 percent in 1991. The average
monthly employee contribution for single coverage in 1999 was $48,
compared with about $27 in 1991; the average monthly employee
contribution for family coverage was about $170 in 1999, compared with
$97 in 1991.
Almost all health plans provide coverage for outpatient prescription
drugs and require the insured to pay copayments. Today, most plans
allow employees to obtain long-term supplies of maintenance
prescription drugs at reduced cost. Two common delivery methods for
prescription drugs are mail order services for long-term supplies of
maintenance drugs and a prescription drug card for use at retail
pharmacies. Because the cost of prescription drugs has increased
annually by 10 to 15 percent for several years, employers are moving
toward multiple-tier copay structures where participants pay more for
brand name drugs than generics, and more for drugs not on the plan‘s
formulary.
Some employers offer limited dental and vision coverage in connection
with their health insurance plans, the cost of which employees may or
may not share. Most dental plans cover preventative and restorative
services such as routine exams, x-rays, fillings, root canal therapy,
and periodontics within a calendar-year maximum benefit. Some employers
offer voluntary dental coverage plans. Although these plans provide
coverage at less costly group rates, employees pay the entire premium.
According to the Bureau of Labor Statistics, in 1999, 43 percent of
employees participated in dental care plans, compared with 57 percent
in 1995 and 62 percent in 1993. Fee-for-service plans were the most
likely to offer dental care, with 85 percent doing so in 1995. In
contrast, only 8 percent of health maintenance organizations offered
dental coverage in 1995. Vision care benefits provide a variety of
services to plan participants that may not be covered by regular health
insurance plans. These services include eye examinations, eyeglasses,
and contact lenses. Since the late 1980s, the provision of vision care
benefits has been declining gradually. According to the Bureau of Labor
Statistics, 25 percent of employees at medium and large companies
participated in vision benefits in 1999, compared with 35 percent in
1988.
Paid Time Off:
Employers offer paid time off benefits consisting of vacation days,
sick leave, personal leave, funeral leave, and leave to meet court and
military obligations as part of a standard benefits package. While most
companies continue to maintain separate leave categories, an increasing
number are combining sick days and vacation days into a single plan
called a paid time off bank. A human resources consulting firm found
that 18 percent of companies responding to a survey had paid time off
banks in 2000, compared with 6 percent in 1997.
Among employers who maintain separate leave plans, the amount of paid
time off has remained relatively stable since the 1980s. Employers
offer an average of 9 paid holidays annually. The number of paid
vacation days varies with employee tenure, ranging from about 10 days
for employees with 1 year of service up to 22 days for employees with
30 years of service. According to the Bureau of Labor Statistics, in
1997, 23 percent of all employees may carry over a specified amount of
unused vacation leave annually; 49 percent must use their leave within
the year earned; 13 percent may cash in unused vacation time; and
10 percent may carry over and cash in unused leave.[Footnote 53]
Sick leave policies vary greatly. Some employers provide a fixed number
of sick days annually, while others do not limit the number of allowed
days. Some of the nine companies we contacted provided a fixed number
of sick days annually, ranging from 5 to 12 days, and others
incorporated sick days into paid time off banks. According to the
Bureau of Labor Statistics, 53 percent of all employees were covered by
sick leave plans in 1999.
Few employers offer paid family leave to new biological or adoptive
parents. Rather, most permit employees to take 12 weeks of unpaid
maternity or paternity leave and adoptive and foster care leave in
accordance with the Family and Medical Leave Act of 1993.[Footnote 54]
According to the Bureau of Labor Statistics, unpaid family leave
covered 93 percent of full-time employees at medium and large companies
in 1997, compared with 84 percent in 1995. Paid maternity and paternity
leave in the private sector appears to be rare. In 1997, only 2 percent
of companies offered paid leave, according to the Bureau of Labor
Statistics. Of the nine companies we contacted, one allowed employees
to take up to 3 years unpaid leave after the birth of a child and to
return to a comparable position. Another company gave mothers 12 weeks
paid leave with the option to take additional unpaid time off. If she
returns within 6 months, the company guarantees her position; if she
returns after 1 year, the company guarantees employment, but not the
same position.
Personal Financial Employee Education:
Personal financial employee education initially was a benefit reserved
for executive-level employees, but at some companies it has gradually
been made available to all employees. Employers offer personal
financial employee education as a way to increase participation in
401(k) plans, increase employee contribution levels, comply with
Employee Retirement Income Security Act of 1974[Footnote 55]
regulations, and decrease potential liability for losses. According to
a March 2001 human resources consulting firm report, 76 percent of
surveyed employees received some type of financial planning services at
work. The top financial planning services offered included retirement
planning, insurance advice, and investment and tax planning.
Relocation Assistance:
Some employers reimburse employee expenses associated with relocation
and increasingly are offering relocation assistance to entry-level
employees. As a result, employers are developing tiered relocation
programs for new and current hires that offer a specific range of
benefits based on salary, grade level, or category, such as renter
versus homeowner and long-versus short-term assignments. Most of the
companies we contacted offered some form of relocation assistance to
employees. Three of these companies limited assistance by job or
operational and specific career development requirements for the
company. For example, one of these has a robust relocation assistance
program for employees who relocate frequently. One company covers all
relocation expenses under a standard and graduated package. Other
companies provide relocation assistance in limited circumstances based
on an employee‘s job level. For instance, front-line employees may
receive a flat lump sum reimbursement, while more senior managers
receive additional money or services.
Standard features of relocation assistance packages include shipment or
storage of household goods, temporary living expenses, and house-
hunting trips. Some employers are providing predecision orientation
trips in addition to house-hunting trips, and also may offer housing
differential assistance programs to renters and homeowners to assist
with extreme discrepancies in housing costs in certain high-cost areas.
A 2001 survey by a relocation consulting firm found that 94 percent of
companies with relocation programs reimbursed closing costs on new home
purchases. Some employers also offer mortgage assistance through
national lenders that provide competitive interest rates. According to
the survey, 53 percent of polled companies identified spouse employment
issues as a reason employees were reluctant to relocate. As a result,
some corporations include spousal assistance in their relocation
program.
Retiree Health Benefits:
Since World War II, many employers who voluntarily sponsor health
insurance as an employee benefit have offered health benefits to their
retirees as well. We reported in May 2001 that employer-sponsored
retiree health benefits have been declining gradually since at least
1997.[Footnote 56] According to a human resources consulting firm,
fewer than one-third of large employers offered health benefits to most
retirees in 2000--a drop of 8 percentage points since 1997. Many
employers that continue to offer coverage have reduced the terms of
coverage by tightening eligibility requirements, increasing the share
of premiums retirees pay for health benefits, or increasing copayments
and deductibles, thereby contributing to a gradual erosion of benefits.
Retirement Plans:
Employers typically offer a defined benefit plan, a defined
contribution plan, or a combination of these plans. Defined benefit
plans provide a fixed pension benefit at retirement. In contrast,
defined contribution plans specify employer and employee contributions
but do not guarantee future benefits. Although the basic provisions of
employer-sponsored defined benefit plans have been relatively stable
for the past two decades, defined contribution plans have supplemented
or supplanted defined benefit plans. According to the Bureau of Labor
Statistics, 50 percent of full-time employees were enrolled in defined
benefit plans in 1997, compared with 59 percent in 1991, and 57 percent
were enrolled in defined contribution plans in 1997, compared with
48 percent in 1991. All nine of the companies that we contacted offered
some form of retirement plan. All the companies offered a 401(k) plan,
and three offered a company stock purchase plan.
Recent trends in 401(k) plans include higher matching contributions,
faster vesting and eligibility, and more investment options.
Eligibility ranges from immediate to 1 year and is growing shorter as
the workforce becomes more mobile. According to the Profit Sharing/
401(k) Council of America, 37 percent of employees in surveyed
companies were immediately eligible to participate in 401(k) plans in
2000, and they could select from an average of 12 investment funds.
Many companies offer to match employee contributions. However, employer
matches vary considerably, ranging from 25 percent to 100 percent of
employee pay contributions in 2000. According to the Profit Sharing/
401(k) Council of America, the most popular type of fixed match is
$0.50 per $1.00 up to the first 6 percent of pay contributed. Some
employers weight the match more heavily toward the first 2 percent or
3 percent of pay contributed by employees. A survey conducted by a
human resources consulting firm found that almost one-third of polled
companies offer immediate vesting of employer matching contributions.
Others offer vesting for matching contributions over a period of 3 to
5 years. At the nine companies we contacted, allowable contributions to
401(k) plans ranged from 1 percent to 50 percent of pretax base pay.
Nearly all of these companies provided matching contributions ranging
from $0.50 to $1.00 for every dollar contributed by employees. In most
cases, the plans offered immediate vesting.
Employers are beginning to offer a ’hybrid“ plan that combines elements
of defined benefit and defined contribution plans. We reported in 2000
that about 19 percent of 1999 Fortune 1000 firms had begun sponsoring
cash balance plans, an emerging type of defined benefit plan that
resembles a defined contribution plan.[Footnote 57] Cash balance plans
allow workers to accrue higher pension benefits earlier in their
careers than they would under most traditional defined benefit plans.
Cash balance plans also allow more mobile workers to secure and retain
higher benefits, even when they change jobs, than they would under most
defined benefit plans.
Short-and Long-Term Disability:
Short-term disability benefits protect employees against lost income
resulting from nonwork-related illnesses or accidents. These benefits
include paid sick leave plans that replace earnings for a fixed number
of days per year, as well as sickness and accident plans that replace a
portion of earnings for a fixed period of time, generally 6 to
12 months. The majority of participants have their benefits paid by
their employer through funded plans, usually self-insured or insured by
carriers. The two most common ways to provide benefit payments are
either as a percentage of employee earnings or as a flat dollar amount.
According to the Bureau of Labor Statistics, 49 percent of employees at
medium and large companies participated in short-term disability plans
in 1999, compared with 55 percent in 1997. According to one consulting
firm, short-term disability plans pay covered employees their full
salaries for the first month of disability and then a short-term
disability benefit ranging from 60 to 70 percent of their salaries for
up to 3 months of disability.
Long-term disability benefits, which begin after short-term disability
benefits expire, provide a percentage of pay for disabilities that
prevent an employee from performing any occupation that the person is
reasonably suited to do by training, education, or experience.
According to the Bureau of Labor Statistics, 36 percent of employees at
medium and large firms participated in long-term disability plans in
1999, compared with 43 percent in 1997. Over the past few years there
has been little change in cost-sharing for long-term disability
insurance or the level of coverage. Most benefit plans continue to
provide 60 percent of pay. According to a study by a human resources
consulting firm, in 2000, the average monthly premium was $0.47 per
$100 coverage.
Survivor Income Insurance:
Survivor income insurance plans provide monthly benefits to a deceased
employee‘s survivors. While life insurance usually provides a lump-sum
benefit, a survivor income plan generally pays a monthly benefit.
Benefits may be a fixed monthly amount or a percentage of the deceased
employee‘s salary. Benefits are usually paid for a limited period, such
as 24 months. Some plans continue payment until a surviving spouse
marries or reaches age 65 or until dependent children reach a certain
age. According to the Bureau of Labor Statistics, 5 percent of
employees participated in survivor income insurance plans in 1999; this
percentage remained unchanged from 1994.
Tuition Assistance:
Tuition assistance benefits reimburse employees for job-related
courses, courses related to future jobs within the company, degree-
related courses, and--less commonly--for nonjob-related courses.
Employers may reimburse eligible employees for both degree programs and
on a course-by-course basis. Many employers limit eligibility to full-
time salaried employees and require employees to fulfill a minimum
service period of 6 months to 1 year prior to becoming eligible for
this benefit. Although most employers who offer this benefit pay a
portion of educational expenses, such as tuition and book costs, most
impose limits on reimbursement amounts through maximum reimbursement
levels or limits on the number of courses per term or per year.
Reimbursement varies by company and may be based on obtaining certain
grades, completion of courses, and the employee‘s agreement to remain
with the company for a specified period of time. Eight of the nine
companies we contacted offered some form of tuition assistance. They
limited assistance to tuition costs and books with total reimbursement
ranging from $1,000 to $5,250, or three courses per semester. One
company required employees to maintain a grade of ’C“ or better. Three
of the nine companies required employees to remain with the company for
a certain time period, generally up to 3 years. According to the Bureau
of Labor Statistics, 55 percent of employees had access to this benefit
for work-related courses and 17 percent were eligible for nonwork-
related educational assistance in 1999, compared with 65 percent and
18 percent, respectively, in 1995. However, few employers provide
educational assistance for employees‘ dependents. Only one of the nine
companies we contacted offered merit-based scholarships for employees‘
dependents, but even these were extremely limited in number.
[End of section]
Appendix V: Comments from the Department of Defense:
ASSISTANT SECRETARY OF DEFENSE 4000 DEFENSE PENTAGON WASHINGTON, DC
20301-4000:
AUG 22 2002:
FORCE MANAGEMENT POLICY:
Mr. Derek B. Stewart:
Director, Military and Civilian Personnel Issues U.S. General
Accounting Office:
Washington, DC 20548:
Dear Mr. Stewart:
This is the Department of Defense (DoD) response to the GAO draft
report GAO-02-935, ’Military Personnel: Active Duty Benefits Reflect
Changing Demographics, but Opportunities Exist to Improve,“ dated July
29, 2002 (GAO Code 350202).
The GAO was asked to review the active duty benefit structure.
Specifically, the objectives were to determine: 1) how DoD has changed
benefits in response to demographic changes in the active duty military
since the advent of the all-volunteer force in 1973 and, 2) how the
military‘s overall benefit package compares with the array of benefits
offered by private sector firms. I am encouraged by your findings
noting that DoD‘s benefits have kept pace with demographic changes in
the active duty force and there are no significant gaps in the benefits
offered by the military in comparison to those available in the private
sector. At the attachment, I‘ve addressed the two recommendations you
identified as areas with opportunities in which we can improve. Also,
under separate cover, my staff is routing several technical corrections
for your consideration.
On behalf of the DoD, I want to take this opportunity to commend GAO
for its efforts in conducting this comprehensive study of military
benefits. Certainly, the men and women of the Armed Forces who serve
this Nation deserve the best support that we can provide them. And, in
that regard, I appreciate the work GAO has done to ensure that they
receive no less.
Sincerely,
Charles S. Abell:
Signed by Charles S. Abell:
Attachment: As stated:
GAO-02-935/GAO CODE 350202:
’MILITARY PERSONNEL: ACTIVE DUTY BENEFITS REFLECT CHANGING
DEMOGRAPHICS, BUT OPPORTUNITIES EXIST TO IMPROVE“:
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Under Secretary for Personnel and Readiness to develop
measures for tracking and assessing the effectiveness of installation-
level services offered through DoD‘s spousal employment assistance
program. (Page 25/Draft Report):
DoD RESPONSE: Concur. The DoD Spouse Employment Working Group is
aggressively pursuing a variety of initiatives to improve spousal
employment opportunities, such as providing job search training and
resolving issues with differing state residency licensing requirements
for teaching, nursing, etc. The capacity to gather pertinent
information on spousal employment exists within the network of
installation-level Family Support Centers. The office of the Deputy
Assistant Secretary for Military Community and Family Policy will track
and assess this data on a recurring basis.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Under Secretary of Defense for Personnel and Readiness to
assess the feasibility, costs, and benefits of offering extended time
off to parents of newborn or adopted children as one way to increase
retention of trained, experienced personnel. (Page 25/Draft Report):
DoD RESPONSE: Partially Concur. The Department has contracted a study
to evaluate the feasibility of implementing an extended leave program
that will be offered to active duty military members. This is a
comprehensive review of programs being currently offered in civilian
organizations and other government agencies to include the U.S. Coast
Guard. An assessment of extended leave for new parents, as well as
other reasons for leaves of absence, will be examined. This study is
scheduled for completion by September 30, 2002.
[End of Section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Brenda S. Farrell (202) 512-3604:
Acknowledgments:
Thomas W. Gosling, Stacey E. Keisling, Krislin M. Nalwalk, Stefano
Petrucci, and Lois L. Shoemaker also made significant contributions to
the report.
FOOTNOTES
[1] The U.S. Bureau of Labor Statistics defines a benefit as ’non-wage
compensation provided to employees.“ We use the term to include such
benefits as retirement, health care, and educational assistance, as
well as certain programs and services that support military members and
their families, including child care, spousal employment assistance,
and relocation assistance.
[2] For purposes of this review, we obtained data on medium and large
employers. The Bureau of Labor Statistics defines ’medium and large
employers“ as those having 100 or more employees.
[3] See U.S. General Accounting Office, Military Personnel: Active Duty
Benefits Reflect Changing Demographics, but Continued Focus Is Needed,
GAO-02-557T (Washington, D.C.: Apr. 11, 2002).
[4] Pub. L. 106-65, sec. 641, Oct. 5, 1999; Pub. L. 106-398, sec. 752,
Oct. 30, 2000.
[5] Our estimate may understate the total amount appropriated for
military compensation because funds for certain benefits are aggregated
into higher-level budget categories and therefore are not visible in
the budget.
[6] Pub. L. 99-145, Title VIII, secs. 801 et. seq. at 806, Nov. 8,
1985.
[7] Pub. L. 101-189, sec. 661, Nov. 29, 1989.
[8] DOD Instruction 1342.22, Dec. 30, 1992.
[9] Pub. L. 106-398, secs. 752 and 722, Oct. 30, 2000.
[10] Pub. L. 107-107, sec. 654, Dec. 28, 2001.
[11] In 2000, DOD calculated that it needed 215,000 child care spaces
to meet the demand. At that time, DOD offered approximately 170,000
child care spaces--a shortfall of about 45,000 spaces.
[12] Congress has urged DOD to provide further employment assistance
for military spouses. The National Defense Authorization Act for Fiscal
Year 2002 directed the Secretary of Defense to examine existing DOD and
other federal government, state, and nongovernmental programs with the
objective of improving retention by increasing the employability of
military spouses and assisting these spouses in gaining access to
financial, educational, and employment opportunities through these
programs. Pub. L. 107-107, sec. 571, Dec. 28, 2001.
[13] See U.S. General Accounting Office, Military Attrition: Better
Data, Coupled With Policy Changes, Could Help the Services Reduce Early
Separations, GAO/NSIAD-98-213 (Washington, D.C.: Sept. 15, 1998).
[14] This figure includes enlistee‘s pay and allowances as well as the
cost of the services‘ recruiting and training infrastructure. See GAO/
NSIAD-98-213.
[15] The major national defense missions assigned to the Coast Guard
include maritime interception, deployed port operations/security and
defense, peacetime engagement, and environmental defense operations.
[16] Participation is limited to commissioned officers at the O-3 rank
or above who have served on active duty in the Coast Guard for at least
5 years; warrant officers who have completed a 3-year probationary
period; and temporary regular officers with at least 3 years of active
duty service. Enlisted members at the E-4 rank or above with more than
4 years of Coast Guard active duty service may also participate. Both
officer and enlisted members must demonstrate satisfactory performance.
Approval is based on the needs of the service and may be denied to
personnel who serve in specialties or ratings that have a critical
shortage. Members may use the separation program only once in their
career.
[17] Pub. L. 103-3, Feb. 5, 1993.
[18] See U.S. General Accounting Office, Retiree Health Insurance: Gaps
in Coverage and Availability, GAO-02-178T (Washington, D.C.: Nov. 1,
2001).
[19] DOD requires active duty service members to enroll in TRICARE
Prime, a managed care program. Their dependents may choose health care
coverage from among three options--(1) TRICARE Prime; (2) TRICARE
Extra, a preferred provider option; or (3) TRICARE Standard, a fee-for-
service option.
[20] Pub. L. 107-14, sec. 4, June 5, 2001.
[21] Pub. L. 106-65, sec. 601, Oct. 5, 1999; Pub. L. 106-398, sec. 601,
Oct. 30, 2000.
[22] Pub. L. 107-107 in sec. 601 sets forth pay tables that reflect the
pay increases effective Jan. 1, 2002.
[23] Pub. L. 106-65, sec. 641, Oct. 5, 1999.
[24] Pub. L. 106-398, sec. 605, Oct. 30, 2000.
[25] See U.S. General Accounting Office, Human Capital: Key Principles
From Nine Private Sector Organizations, GAO/GGD-00-28
(Washington, D.C.: Jan. 31, 2000).
[26] Pub. L. 107-107, sec. 638, Dec. 28, 2001.
[27] 10 U.S.C. secs. 1079(g) and 1086(c)(2)(B).
[28] See Veterans‘ Educational Assistance Act of 1984, Pub. L. 98-525,
Oct. 19, 1984.
[29] 26 U.S.C. sec. 692.
[30] 38 U.S.C. sec. 5301.
[31] 10 U.S.C. sec. 1201.
[32] 10 U.S.C. sec. 1212. See also Military Compensation Background
Papers, Fifth Edition, Sept. 1996, DOD Office of the Secretary of
Defense, Chapter III.C.2.
[33] Pub. L. 107-107, sec. 622, Dec. 28, 2002.
[34] Veterans‘ Educational Assistance Act of 1984, Pub. L. 98-525, Oct.
19, 1984.
[35] 38 U.S.C. sec. 3002.
[36] 38 U.S.C. sec. 3011.
[37] 38 U.S.C. sec. 3031.
[38] 38 U.S.C. sec. 3015.
[39] Pub. L.107-107, sec. 654, Dec. 28, 2001.
[40] 10 U.S.C. sec. 2007.
[41] Pub. L. 99-145, sec. 806, Nov. 8, 1985.
[42] Pub. L. 107-107, Title VII, Dec. 28, 2001.
[43] Pub. L. 107-14, sec. 4, June 5, 2001.
[44] Pub. L. 107-107, sec. 642, Dec. 28, 2001.
[45] 50 U.S.C. App. 530.
[46] 10 U.S.C. secs. 1402 and 1406.
[47] Pub. L. 99-348, July 1, 1986; 10 U.S.C. sec. 1410.
[48] The U.S. Bureau of Labor Statistics defines medium and large
private companies as those with 100 or more employees.
[49] Deloitte & Touche, Deloitte & Touche and Pension & Investments
2001 Annual 401(k) Benchmarking Survey (New York: Deloitte & Touche,
2001); Employee Benefit Research Institute, EBRI Databook on Employee
Benefits (Washington, D.C.: EBRI, 1997); Hay Group, The Hay Report:
Compensation and Benefits Strategies for 2001 and Beyond (Philadelphia,
Pa.: Hay Group, Inc., 2001); Hewitt Associates, Survey Findings: Design
and Administration of Educational Reimbursement Plans (Lincolnshire,
Ill.: Hewitt Associates LLC, 1999); Hewitt Associates, Survey
Highlights: Managing Time Off 2000/2001 (Lincolnshire, Ill.: Hewitt
Associates LLC, 2001); William M. Mercer and Bright Horizons Family
Solutions, Work/Life Initiatives 2000 Survey Report (New York: William
M. Mercer, Incorporated, 2001); and William M. Mercer, Spotlight on
Benefits: A 2001 Study of Benefit Plans (Louisville, Ky.: William M.
Mercer, Incorporated, 2001).
[50] Other convenience benefits include entertainment and tickets, on-
site banking and postal services, company stores, travel planning,
photo developing, free or subsidized meals at work, preferred parking
for pregnant employees, florists, shoe repair, prescription drug
deliveries, barbers, personal shopping, pet care, car inspections,
casual dress days, and personal use of company computers and the
Internet.
[51] Pub. L. 103-3, Feb. 5, 1993.
[52] GAO-01-563T.
[53] Data was not available from 5 percent of medium and large
companies in 1997 concerning their paid leave policies.
[54] Pub. L. 103-3, Feb. 5, 1993.
[55] Pub. L. 93-406, Sept. 2, 1974.
[56] U.S. General Accounting Office, Retiree Health Benefits: Employer-
Sponsored Benefits May be Vulnerable to Further Erosion, GAO-01-374
(Washington, D.C.: May 1, 2001).
[57] U.S. General Accounting Office, Cash Balance Plans: Implications
for Retirement Income, GAO/HEHS-00-207 (Washington, D.C.: Sept. 29,
2000).
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