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GAO-09-726R 1 (2009-07-06)

handle is hein.gao/gaobaanol0001 and id is 1 raw text is: I GA 0 T M WAccountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 July 6, 2009 Congressional Committees Subject: Military Personnel: Reserve Compensation Has Increased Significantly and Is Likely to Rise Further as DOD and VA Prepare for the Implementation of Enhanced Educational Benefits Compensation has been an important tool used by the military services to attract and retain qualified people since the Department of Defense (DOD) transitioned to an all-volunteer force in 1973. While the level of military compensation has increased for active duty, reserve, and guard servicemembers, the basic structure of military compensation has remained unchanged. DOD provides active duty personnel and reservists' with a compensation mix consisting of cash, such as pay and allowances; noncash benefits, such as education assistance and health care; and deferred compensation, such as retirement pensions and extended access to health care benefits. In past reports, we have raised a number of concerns about the effectiveness of DOD's approach to compensation. For example, in our 2005 report on the challenges facing the United States in the 21st century, we emphasized the need for a baseline review of all major federal programs and policies, including military compensation, to ensure that they are efficiently and effectively meeting their objectives, particularly in light of concerns about the affordability and sustainability of federal spending.2 In 2005 and 2007, we assessed the active duty and reserve compensation systems and found the cost to provide compensation was substantial and rising.' We also found that DOD's piecemeal approach to compensation involved increasing or making changes to compensation without completely understanding the impact that these changes might have on recruitment and retention. As DOD increasingly relies on the reserve components to carry out its military operations domestically and abroad, DOD and Congress have taken steps to improve recruitment and retention by increasing compensation. One example involves expanding educational benefits for mobilized reservists. The recently enacted Post 9-11 Veterans Educational Assistance Act 'For the purposes of this report, the terms reserve component, reserves, and reservists refer to the collective forces of the Army Reserve, the Army National Guard, the Navy Reserve, the Air Force Reserve, the Air National Guard, and the Marine Corps Reserve. 2GAO, 21 Century Challenges: Reexamining the Base of the Federal Government, GAO-05-352T (Washington, D.C.: February 2005). 3GAO, Military Personnel: DOD Needs to Improve the Transparency and Reassess the Reasonableness, Appropriateness, Affordability, and Sustainability of its Military Compensation System, GAO-05-798 (Washington, D.C.: July 19, 2005) and Military Personnel: DOD Needs to Establish a Strategy and Improve Transparency Over Reserve and National Guard Compensation to Manage Significant Growth in Cost, GAO-07-828 (Washington, D.C.: June 20, 2007). GAO-09-726R Reservists' Educational Benefits

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