The military retirement system cannot be overhauled without a concomitant overhaul of the basic promotion system.The up-or-out rules serve well to move the hot runners forward and speed promotion for future flags and chiefs of service. But they are incredibly wasteful of talent, motivation, and experience in forcing from service those who may be serving well and honorably in their current rank but fail to promote.

The Brits and many other militaries retain these passed-over officers, using their talent and experience in myriad ways and building deep expertise in subjects that the due-course and hot-runners just cannot get enough time with on their path to fame and glory.

The end to up-or-out would also significantly reduce the accession numbers of new officers, another cost saving. Average experience in the force would go up markedly. And this more enlightened approach could also open the door to extended command tours for those who perform well.

Our system was built on serving career needs ahead of mission. It hasn't changed for decades because those who benefit from the rules are in charge of them. The monkeys are running the zoo. No business in the world could be so wasteful of talent. End up-or-out.

(A personal note: I was always a beneficiary of the current system. Zero sour grapes here. 37 years continuous active duty.)

As printed in an essay published in US Naval Institute Proceedings May 2005...

"But of all our officer policies, none is as harmful and stupid as the one that throws away good officers at the peak of their abilities. Can’t get promoted? Go away. Up or out, my friend.

The two fantasies behind our draconian up-or-out policy are that we have endless access to gifted individuals and unlimited resources to grow new talent. Neither is real. There are never enough good people and the cost of continually recruiting, training, and grooming new officers is huge. It’s a fool’s bet that the ensign we’re recruiting can do more for the Navy than the lieutenant commander, commander, or captain we’re sending home early. We don’t motivate officers by threatening them with decimation and sending expensive, experienced talent out the door.

Up-or-out policy may be a sacred cow, but its wisdom is folly. It’s time we asked why such waste is tolerated; it's time to end up-or-out policies for officer promotion and retention –

• End the practice of mandatory retirement based solely on failure to promote.

• Permit officers to remain on active duty as long as their performance is sound and they meet the requirements of their assignments. Quit acting as the farm system for American business and let the individuals decide whether they want two careers … or just one, which they love, are good at, and serve with deep dedication.

• Recast officer personnel policies around two types, the fast-trackers who are continuously upward-mobile for ever-higher leadership positions and the rest, who may be sidetracked from becoming CNO, but have great talent, experience, and motivation for the Navy’s routine work."

The thoughts apply to all the US Services.

RD: The only issue I see with what you propose is that by keeping those who do not pass the up or out test, while they can develop a deep expertise, it can lead to a lack of new ideas, creativity, as well as hanging on to old ides that just don't work. Human nature is to become emotionally involved in the projects we start, even if they provide no use (FCS, etc...).
I would point out the French in WWI, with their octogenarian officers trying to run the war as a historical example.

Very interesting inside thoughts from RD. It would seem that there is some similarity in the armed forces to the far more haphazard corporate world where competent employees are eventually promoted to the level where they are no longer competent (the Peter Principle)? Adm. Halsey probably one of the most recognized figures from WW2 who was what was precisely needed in the shoestring back to the wall atmosphere of 1942 but was clearly out of his depth in the vastly more technically complex fleet operations of 1944-45.

Soldiersdiary already makes a good point. I'll build on that and say that no up and out results in stagnation. In a military with no end strength no problem. But we have plenty of young bucks looking for a path forward...when that path is blocked by ROAD personnel occupying a slot it destroys morale and therefore retention. You have to pay the bill one way or the other.

Also, at least from an Army perspective, the need for officers is desperate enough that short of commiting a major crime you are destined for almost certain selection all the way to O-5 and O-6 is likely within reach of many who wish to try for it. There's hardly any up or out right now because everyone is moving up - which to me is the more frightening and demoralizing aspect of the problem.

But what the enlisted personnel? While there might be a shortage within the Army, the USMC is starting to shrink it's numbers (officer and enlisted) after years of growth. Reenlistment is becoming more difficult, and I doubt that the opportunities for promotion are available within the USMC right now. The numbers that I've seen (from 2002) show active duty officers at about 200,000, while enlisted personnel were roughly 1.1 million.

The concerns I have with reducing or eliminating up-or-out and keeping officers beyond the normal 20-30-year retirement:

War is a young man's game. We'll see a greying of the officer force as more and more officers remain in into their 40s, 50s, and even 60s. With manpower and grade limits set by Congress, our inflow of young, qualified, and trainable new officers will be drastically cut, causing new problems down the road with a very stagnant officer population.

...and there were no alternative uses for the national-security dollar, you can run any damned retirement system you want. This is about efficiency (quit peeing money down a rathole) and effectiveness (that ensign is nowhere near as useful as that commander).

I was writing in the Navy context ... which according to SecDef Gates and many posting in this blog, is just about tapped out. So do we run our officer personnel system to reward careerists or to cut costs and improve the force?

There are no free goods.

Arrggghhh!! That's the problem though. If you're good at A in this system, you're not usually promoted to doing a higher level of A. You're promoted, and go and perform task B. Task B usually leading to an increasing emphasis on management tasks.

I've heard similar types of problems with the intelligence community from career analysts (the focus on management). The analyst didn't get promoted to higher levels of an analyst's job. Nope, the analyst's new job is overseeing, managing, and coordinating lots of other analysts. And so on. The IC has made a few efforts to try to combat this in recent years (CIA has a cadre of senior analysts now I believe). But in the military - if you have a servicemember that's darn good at doing task A, he gets rewarded by being promoted and sent to do task B, which could end up being completely different. And he could be awful at task B.

I'm afraid this might not be as clear as I'm intending for it to be. I think Rubber Ducky's earlier comment, that "But they are incredibly wasteful of talent, motivation, and experience in forcing from service those who may be serving well and honorably in their current rank but fail to promote" the crux here. Why would you fire someone for doing well at task A, but not well enough to be promoted and moved over to task B? In what other field/career/position/instition do you get fired for doing your job well, but not so well that you don't get promoted?

G2mil has covered this in detail. The biggest problem is that it will take decades to fix it, while all the four-stars think nothing is wrong since it chose them as the best and brightest.

First, GIs are already paid very well, but the Pentagon keeps it a secret. GIs make 2-3 times more than comparable Americans, not including benefits. The solution is for the Pentagon to cite these figures in recruiting commercials, but senior officers fear that Congress might freeze pay if they learn the truth. Here are the details.
http://www.g2mil.com/pay.htm

Here is the best transitional plan, delaying retirements until age 50. http://www.g2mil.com/Winter2007.htm
This costs nothing to implement and most everyone agrees its a good idea.

I realize that most don't click links, so here is the first part of that article to tickle interest:
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Most militaries have a retirement system, which becomes more costly every year as people live longer and the cost of new health care technology and drugs needed to keep the elderly alive rises rapidly. In 1950, American life expectancy was 68.2 years, which rose to 77.6 by 2003. This trend indicates that people joining the US military today at age 18 and retire at age 38 will receive retirement pay and full medical benefits for another 44 years until they die at 82 years of age. As a result, these servicemen will collect retired pay for TWICE as long as active duty pay.

This has caused personnel costs to soar. The US military now spends more on a force of 1.4 million active duty personnel than it did on 2.1 million personnel in 1983, even after adjusting for inflation. Most of this cost is the result of two decades of annual pay raises above the rate of inflation. These pay raises also increased eventual retirement costs, while retirees live longer each year. Prior to World War II, servicemen had to serve until age 60 to retire and collect a monthly retirement check. Back then, the US military paid the average retiree benefits for only around seven years since life expectancy was 67 years. Returning to that standard is possible, but will upset those who expect retirement checks in their middle-age.

It has become normal in the confused world of the US military for someone to "retire" and then take a job on a military base and earn another paycheck from the military, or through a contractor. This is very lucrative, but this "double dipping" is expensive and counterproductive since it encourages highly trained people to "retire" in their 40s. For example, during the wars in Afghanistan and Iraq, the US military had manning problems as many senior enlisted men retired so they could earn more money as security contractors funded by US military contracts.

If the US military is to survive in a future where most people live past age 100, Generals must propose changes now so that new enlistees cannot collect a retirement check until age 50. After 20 years of service, they can transfer to a reserve status and pursue other careers, but they will not receive monthly retirement checks until age 50. They will retain medical benefits and access to base facilities. This is similar to the retirement system for reservists, who can "retire" after 20 years, but do not receive a monthly check until age 60. .....................
_____________________________

The rest is here: http://www.g2mil.com/Winter2007.htm

First, let me say that I think very highly of Nate Fick. One of my professors back in school. an Iraq War Vet, went to Grad School with Fick, and spoke the world of him. I've read Fick's book (a must read) and I think its outstanding.

His suggestion has merit, but I believe allowing soliders to stay in longer isn't the real issue. As others have alluded to, its ensuring the right guys are getting promoted, thus incentivizing them to stay in. This would involve revamping the promotion system and doing away with the mandatory promotions (i.e. over 95% promotion rate to Major and LTC).

I also think one fix would involve giving some opportunity for a more productive career after the rank of captain. I once saw T.X. Hammes give a lecture and make a great point about how the Army should not shy away from allowing Majors with more experience from getting second company commands, especially in specialized units, as opposed to just assigning them to staff positions for the second half of their career (unless they get a battalion command). I know this is a reason alot of guys say they leave after company command, because its basically all downhill from there. That said, people are going to leave the military for a host of reasons, and changing promotion systems and retirement options won't change the fact that most officers leave because they can earn much more money and live more comofortably in the civilian sector

While I am encouraged that Mr. Ricks addressed this topic, I know that educational benefits for spouses is far more interesting to the Pentagon. Some guy even got axed over that one.

Anyway, here is my take, that yes, company COs should be majors, XOs, captains, and replace one 2ndLt with a Master Sgt.
http://www.g2mil.com/FewerLts.htm

I think everyone will agree, then the idea will go away, as we discuss if TRICARE rates should rise after a 15 year freeze.

Nate is going to have MOAA and every retiree on his ass for his stance! Attrition from the ranks occur with or without war and the best and brightest usually separate. The question revolves around whether taxpayers can afford the current retirement system. Look across our countries at county and state government retirement systems. Unions run amuck and municipalities are going bankrupt with retirees at 50 collecting 90%-100% of their pay then signing on to work as consultants as soon as they retire.
http://www.californiapensionreform.com/database.asp

Fifty percent at twenty plus healthcare benefits will be enough for some but it's not really a "retirement" per say. The fact remains that the military is the best job out there for most ROAD (retire on active duty) scholars and reservists coming back on active duty due to recession or bored at their civilian career. And that nearly every veteran will eventually collect a disability check from the VA.

Good luck in trying to tackle this issue amid the worst economic climate in decades and two wars.

I agree with the idea on principle, but when I tried to think of what the alternative to up or out (alsoup AND out at 20) would look like in practice I realized it would probably end up looking a lot like the DoD civilian personnel system.

Pushing out retirement eligibility to 30 years will only serve as a disincentive to stay. Given the nature of the work and the promotion system, why would any sensible person agree to hitch their retirement to the possibility that they might survive a 30 year career?

Many other public service organization have 30 year retirements but they do not subscribe to the concept that the only goal in one's career is to get promoted to a management position. Fire departments that offer pensions beginning at 30 years service do not force-out capable individuals who have never gotten promoted above firefighter.

My indictment against the military's career ladder is the belief that one's life goal must be to stop doing the technical job that they have spent years learning how to do and assume management responsibilities. How many times do I have to hear chiefs telling mid-level enlisted people, "you need to show leadership, you won't get promoted by just being good at your job." The trouble is that there are many jobs where basic competency is a step or two below the expertise I need to get the job done. But where are my most experienced people? They're busy trying to be leaders. I need doers and the system we have is biased to not provide them.

Create pathways for people to stay in their jobs and maybe I'll get behind the suggestion that a 30 year retirement is the way to go.

With all due respect to Mr Fick, I saw Generation Kill and was on his side every time; there are some of us in the military that aren’t using it as a stepping stone to something else. I enlisted in the Washington National Guard in 1993, I am now an officer on Active Duty and I plan to stay in as long as the powers that be let me. I didn’t join the military for the retirement benefit, although I will admit it is a nice benefit to have. I joined because I love what I do. Taking away retirement or pushing the retirement benefit back to 30 years would be a slap in the face of the hard working soldiers both enlisted and officer that worked hard and earned that benefit. Mr. Fick claims that the 20 years of service retirement is a “relic of an age when twenty years in the Army left a veteran a broken man with blown joints, no hearing”. Is that not still the case? I know plenty of people that retire today with all of these medical issues and more. Multiple deployments will do that to a person. Sure there are some people out there who will suck up the benefits that probably don’t deserve it but the military is not the only place where that happens.

I can see Fick's point on the 20 year system being a relic of another time, but Mr. King also counters with the fact that there are still many invidicuals weathered beyond their years due to multiple deployments. I would also offer that the 20 year retirement provides a finishing line and goal that many military families strive for together, the reality is it does provide a safety net that a lot of folks would like to have. I would suspect that the prospects of "one more tour and I can retire" has kept a lot of marriages together, as they pack up to move one more time, or mom/dad ships off for another 16 month engagement. I think 20 years of service also takes a pretty severe emotional wear and tear on a family.

Reserve component soldiers have to wait to age 60 to collect retirement, and most municipal and corporate retirement programs don't allow beneficiaries to collect before at least age 60 without reducing the monthly payments, so perhaps leadership should consider something similiar for active duty retirees. It's unrealistic for us to think we can continue to pay these kinds of benefits when life expectancy of the average American and the average military retiree continue to rise. And something that's always struck me as unfair is the disparity between the time in which those retiring from active duty can collect vs those retiring from the reserve components. I retired from the Army Reserve after serving 10 years on active duty and 14 in the reserve, which included deployment to the first gulf war and to then Afghanistan, yet I must wait until age 60 to collect. I get no credit toward all the active duty time I served or the deployments on which I've gone. I know several reservists who have been deployed numerous times and unless they stay two consective years on active duty just prior to retirement, they don't get to collect retirement until age 60. That needs to be fixed. But every time reservists bring up the disparity between the age at which active vs reserve can collect retirement, we're told anything less than age 60 is too young (Sec. Rumsfeld's answer one time to a National Guardsman serving in Iraq) or that somehow our service counts for less because it's not 20 continuous years on active duty. It's simply unfair. But considering our fiscal picture, it's also unrealistic to continue to allow people to collect retirement 20 years before what's considered the standard age of retirement virtually anywhere else in America.

I think there's a broad consensus that "up or out" needs to go, for most if not all military officer specialities. Pilots, for example, can continue to fly for 30 years -- albeit not all those years in fighter-types -- and this would be efficient resource utilization. For combat infantry and related MOS's, there certainly should be age and/or physical fitness constraints. But I've long felt that the main up or out selection ought to come around the 4-year point, about the time an officer is at or eligible for O-3 rank, and by which time his suitability for continued military service ought to be evident. Once selected, there's little point in doing annual efficiency reports on everyone -- there might be optional "very good" or "unfit" reports for distinguished accomplishments or conspicuous screwups, which could be issued at any point in an officer's career and would be the basis for promotion or non-retention, with some kind of cash payout or limited retirement benefit for the latter. But if you were doing an acceptable job and officer staffing requirements were basically unchanged, you would remain at the O-3 rank, with step increases & COLA to keep pay competitive.

One step would be to establish (Retired on Active Duty) slots for base and training support. Older GIs could get these "jobs" which they could stay in until age 60 so long as they perform well. They would no longer be considered for promotion, need not meet military grooming, weight, and fitness standards nor wear a uniform.

For example, an E-8 helo mechanic who now MUST retire after 28 years at age at age 45, where he still gets 70% of base pay and free medical. Would he like to become an instructor at Fort Rucker for 15 years? The military gets him for the net 30% of his pay, plus housing. How about a 50-year old Colonel near retirement. Would he like to spend 10 years at West Point?

Their retirement would still be capped at 75%, but I suspect there would be far more applicants than slots. I'd even reduce the civilian labor force to make room. They might make more money if they retired and took another job, but most love the military and would rather stay in.

Here is a very specific plan for ending up or out, really phasing it out.
http://www.g2mil.com/let.htm

The key element is that promotion boards would also serve as retention boards. If someone is passed over but performing well, he is retained. Poor performers may be forced out, or some because of manpower overages in their field, but ideally over 90% of passed over officers are retained.

Reviewing passed over officers each year would be a huge burden, so passed over officers would not be considered for promotion until four years later. For example, a Major flying C-130s may be passed over at the 20-year mark, then the 24-year mark, then the 28-year mark and 32-year marks, then retiring after 35 years of service. He's a good pilot, but just not senior command material.

Officers may be promoted later in their careers due to increases in force structure, wartime service, or manpower shortages. It may become common for most officers to be passed over during their first try since they are compared to more experienced officers passed over twice before.

The problem is getting the Services to accept fundamental change.

Perhaps the best approach would be to ignore the Services and have the directives come from Congress, as did Goldwater- Nichols and the National Security Act of 1947 and its updates. Perhaps the Services aren't the solution, they are the problem.

Bruce Catton, the great Civil War historian, had this line about the military mind, which "steps from one undeniable truth to another until it arrives in a land of crippling nonsense." Indeed. Great description of our military retirement system and promotion policies.

Fick is here hitting on something that's been a bete noire of mine for a while; I think the pension system is entirely screwy and damaging. But I'm hating his remedy.

Basically I think what you want to do is get rid of the pension entirely, at least for officers. A lot of officers, especially in warfighting areas, don't have the civilian job opportunities they do in the military (or can't easily leverage their military experience past the first few years for those opportunities), and the pension creates a terrible incentive for them.

If you've logged ten years in uniform, you got no retirment from Army. You have a powerful incentive to "go along to get along" because you have ten years' investment towards a pension that you risk by stepping out of uniform and you want the next ten not to be painful. I'm not saying -- and I don't think Fick is -- that officers are so explicitly motivated by money, but incentives matter and that kind of money and security can and probably does go a long way towards helping you rationalize that what your superiors are telling you is the gospel truth.

At a time when people like LTC Nagl have been telling us how important it is that mid-career officers speak up and challenge the system when they have to, I find it distressing that few people have addressed this exact problem which most acts against the independence of mid-career officers.

Don't extend pensions to 30 years. Get rid of them, and lots of other officer benefits, too. Maybe give us a defined contribution plan like many of the civilians we serve -- I'd give up my pension in a heartbeat for a match on my TSP contributions, mostly because of the independence (and confidence in what motivates my decisions) that such an arrangement would buy me.

I agree with the author that the 20 year retirement system may be anachronistic, but I think a major overhaul would have to occur to replace it; I am not sure that Congress is up to the task. I have often wondered if we would be better served to have a tiered defined retirement plan starting at around 10 years (reduced benefits from what we currently receive) with full benefits (the current 50% or whatever that may be) at 30 years. I think that it would have the potential of "culling" some of the poor to mediocre officers and NCOs who stay in just to reach 20 years of service and perhaps giving an incentive for keeping some of the talented personnel we inevitably lose. That being said, it is important to remember that while military members have the availability of the TSP as well as the pension, they do not receive matching funds like many civilians do. The current pension system is a great incentive in lieu of having matching funds for someone who has made the commitment to stay in the service.

I am not sure that waiting until 30 years for retirement is reasonable unless pay increased substantially. Many of my peers, myself included, entered the service at a substantially reduced pay over what they could have made in the civilian sector. Even with the pay raises that have come with promotions, I still lag the earning potential of my peers I graduated with in college. To expect us to stay in the military for 30+ years for retirement benefits seems very unrealistic especially considered that the retirement system in its current form is all or nothing for those that leave prior to 20 years of service as well as the demands that the wars in Iraq and Afghanistan have placed on indiviuduals and families over the last 9 years.

Contributed by MAJ Stuart Rinkleff, Student, Command and General Staff College, United States Army Combined Arms Center, Fort Leavenworth, KS
The view expressed are those of the author and do not reflect the official position of the Department of the Army, the Department of Defense or the U.S. Government.