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thedrifter
08-06-08, 07:33 AM
Review calls for change to overseas COLA
By Jeff Schogol, Stars and Stripes
Mideast edition, Wednesday, August 6, 2008

ARLINGTON, Va. — A study commissioned by the Defense Department recommends fixing the cost-of-living allowance for troops and their families overseas so that they do not get less money if they do most of their shopping on base.

The recommendation is part of the 10th Quadrennial Review of Military Compensation, a study that is required by Congress.

Under the current overseas COLA system, when prices increase off base, servicemembers do more of their shopping on base, and that ends up decreasing their COLA, said Jan D. "Denny" Eakle, director of the QRMC.

"So as things become more expensive off-base and they would anticipate their COLA would go up, in fact, their COLA goes down because they begin shopping on base and we attribute commissary prices as greater part of the market basket," she said. "Our recommendation is that we fix those proportions so that military members are no longer penalized for making wise financial choices."

The Defense Department will consider this and the study’s other recommendations over the next six to 12 months, said Sheila Earle, principal director, deputy undersecretary of Defense (military personnel policy). Some of the recommendations would require new legislation if the department accepts them.

Another recommendation is that servicemembers get education vouchers that would allow them to send their children to primary and secondary schools of their choice, Eakle said. The money for the vouchers would come from the Impact Aid program.

"If they want their child to go to the local public school, they would just — the Impact Aid would stay right there," she said. "If, however, they wish to put their child in a different public school or a private school, they could take their Impact Aid dollars and use them to either offset private school tuition or to get them into a different public school."

Other recommendations dealt with revamping retirement benefits, such as giving servicemembers "Gate pays" after certain years of service.

Unlike re-enlistment or retention bonuses, these payments would not require a servicemember to sign a contract for additional service, but the hope is they will want to stay longer to receive future such payments and get full Tricare benefits, Eakle said.

The payments would augment, not replace, existing re-enlistment and retention bonuses, she said.

The study also recommends having the government make a contribution to the Thrift Savings Plan, she said.

"This is not a match," Eakle explained. "This is an outright contribution by the government."

Under the recommendation, the government would contribute 2 percent of a servicemember’s basic pay at two years of service; 3 percent at two years’ service; 4 percent at five years; and 5 percent after five years of service, she said.

But don’t expect the extra cash anytime soon.

The study recommends the services conduct an eight-year test before implementing any changes to the retirement system, Eakle said.

If the recommendations are adopted, servicemembers would be grandfathered under the current retirement system, though the Defense Department might give some the option to switch, Eakle said.

Ellie