a

GAO

United States Government Accountability Office

Report to Congressional Committees

September 2004 MILITARY 

PERSONNEL

DOD Needs More Data 

Before It Can 

Determine if Costly 

Changes to the 

Reserve Retirement 

System Are Warranted

GAO-04-1005
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-04-1005.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Derek B. 

Stewart at (202) 512-5559 or 

stewartd@gao.gov. 

Highlights of GAO-04-1005, a report to 

congressional committees 

September 2004

MILITARY PERSONNEL

DOD Needs More Data Before It Can 

Determine if Costly Changes to the 

Reserve Retirement System Are 

Warranted 

The active duty and reserve component retirement systems require 20 years 

of service for vesting, provide annuities that are based on 2.5 percent of 

basic pay for every creditable year served, and offer options to participate in 

the government’s Thrift Savings Plan. Active duty members receive an 

immediate annuity upon retirement based on pay rates in effect on the date 

of retirement. Eligible reservists must wait until their 60th birthday to 

receive an annuity. The annuity of retired reservists who remain subject to 

recall is based on pay rates in effect when they reach their 60th birthday. 

Current data do not provide DOD with the information it needs to determine 

what changes, if any, to the reserve retirement system are needed. DOD has 

not established thresholds for attrition attributable to retirement and, 

without thresholds, it is not possible to assess the extent to which DOD is 

retaining the desired numbers of senior reservists or the extent to which 

retirement benefits influence decisions to leave or stay in the reserves. 

Nevertheless, GAO’s analysis of DOD data for selected periods when 

reservists were deployed shows that the overall makeup of the reserve force 

by years of service, age, and pay grade has remained relatively even and that 

overall reserve retention rates, to date, have remained relatively stable. DOD 

has, however, identified certain high-demand occupational specialties, such 

as military police, where retention rates have decreased. While these cases 

do not necessarily suggest that uniform retirement reform is required, they 

do suggest that targeted corrective actions of some sort may be needed. 

The estimated cost of lowering the age of receipt, coupled with an 

associated increase in retiree health care costs, is significant and considering 

the fact that military basic pay will continue to grow and health care costs 

will continue to rise, the longer-term cost will be significant. Importantly, all 

reservists—not just the minority of reservists who have deployed to recent 

operations—would be covered under this change. In addition, reservists who 

are experiencing increased deployments may not be the beneficiaries of a 

reduction in the age of receipt, given that only one in four reservists 

currently stays in the reserves long enough to retire. Finally, DOD has not 

studied changes to the reserve retirement system in the context of the total 

force. Changes, if not evaluated from a total force perspective, could result 

in a significant increased cost with little or no benefit and may produce 

unintended consequences on DOD’s active duty forces. 

Estimated 10-Year Increase in Appropriations of Five Legislative Proposals, Fiscal Years 

2005-2014 (dollars in billions) 

Increased 

costs 

Immediate 

annuity Age 55

Age 53 on a 

sliding scale 

Age 55 on a 

sliding scale

Age 55 with 

reduced 

annuity

Retirement fund $20.45 $7.60 $2.88 $2.88 $3.59

Health care $14.24 $6.03 $2.49 $2.39 NA

Total $34.69 $13.63 $5.37 $5.27 $3.59

Source: GAO analysis of DOD data. 

Since September 11, 2001, National 

Guard and Reserve personnel have 

served, and will continue to serve, 

a critical role in the Global War on 

Terrorism. As a consequence, 

Congress has focused attention on 

the fair treatment of reservists and 

directed GAO to review, among 

other things, the Department of 

Defense’s (DOD) reserve 

retirement system. Currently, five 

legislative proposals exist that 

would lower the age when eligible 

reservists can receive their 

annuities. GAO assessed (1) DOD’s 

reserve retirement system as 

compared to certain aspects of the 

active duty retirement system, 

(2) the extent to which DOD data 

suggest that changes to the reserve 

retirement system may be 

warranted, and (3) the potential 

costs and effects of the five 

legislative proposals. 

GAO recommends that DOD 

specify desired metrics for 

measuring the retention or attrition 

of senior officer and enlisted 

reservists most likely to be affected 

by changes to the reserve 

retirement system; determine if any 

gaps exist; identify changes, if any, 

to the current reserve retirement 

system that would address these 

gaps, to the extent that they exist; 

and evaluate any changes to the 

reserve retirement system in the 

context of the total force. In 

commenting on a draft of this 

report, DOD concurred with each 

of GAO’s four recommendations. 
Page i GAO-04-1005 Military Personnel 

Letter 1

Results in Brief 3 

Background 6 

The Reserve Component Retirement System Mirrors the Active 

Duty Retirement System but Has Differences 12 

The Extent to Which Changes Are Warranted to the Reserve 

Retirement System Is Unknown 17 

Proposed Changes to Retirement System Are Costly and Need to 

Be Made in Context of the Total Force 25 

Conclusions 31 

Recommendations for Executive Action 32 

Agency Comments 32 

Appendix I Scope and Methodology 34 

Appendix II Key Provisions of the Reserve Retirement Points 

System 38 

Appendix III Reserve Workforce Profile Data 40 

Appendix IV Attrition Rates for Reservists 47 

Appendix V Comments from the Department of Defense 51 

Appendix VI Related GAO Products 54 

Tables 

Table 1: Availability of Retirement Provisions 12 

Table 2: Estimated 10-Year Increase in Appropriations of Five 

Legislative Proposals between Fiscal Year 2005 and 2014 28 

Contents 
Page ii GAO-04-1005 Military Personnel 

Figures 

Figure 1: Organizational Chart of the Ready Reserve 8 

Figure 2: Percentage of Total Personnel, by Service, Serving on 

Active Duty or in One of the Reserve Components in 

Fiscal Year 2003 10 

Figure 3: Total DOD Reserve Component Retention Rates, and 

Retention Rates for Officer and Enlisted Reservists, 

Fiscal Years 1991 through 2003 23 

Figure 4: Reserve Enlisted Personnel Average Years of Service for 

Calendar Years 1991, 1997, and 2003 41 

Figure 5: Reserve Enlisted Average Age for Calendar Years 1991, 

1997, and 2003 42 

Figure 6: Reserve Enlisted Personnel Average Pay Grade for 

Calendar Years 1991, 1997, and 2003 43 

Figure 7: Reserve Officer Average Years of Service for Calendar 

Years 1991, 1997, and 2003 44 

Figure 8: Reserve Officer Average Age for Calendar Years 1991, 

1997, and 2003 45 

Figure 9: Reserve Officer Average Pay Grade for Calendar 

Years 1991, 1997, and 2003 46 

Figure 10: Reserve Attrition by Years of Service for 

Fiscal Year 1991 48 

Figure 11: Reserve Attrition by Years of Service for 

Fiscal Year 1997 49 

Figure 12: Reserve Attrition by Years of Service for 

Fiscal Year 2003 50 

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Page 1 GAO-04-1005 Military Personnel 

September 15, 2004 

The Honorable John W. Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Duncan Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

Over the past decade, the Department of Defense (DOD) has increasingly 

relied on members of the National Guard and Reserve to carry out its 

military operations domestically and abroad. At the end of fiscal year 2003, 

DOD had 1.2 million reservists.1

 Since September 11, 2001, DOD has called 

more than 335,000 reservists to active duty, and reservists will continue to 

serve a large critical role in the Global War on Terrorism. 

Congress has focused attention on the fair treatment of reserve 

component personnel as compared to their active duty counterparts. For 

example, in recent years Congress has improved health care benefits not 

only for reservists but for their families as well.2

 Currently, several 

legislative proposals are under consideration to change the reserve 

retirement benefit that would lower the age when eligible reservists can 

receive their annuities. 

 1

 For the purpose of this report, the term reserve component, or reservists, refers to the 

collective forces of the Army Reserve, the Army National Guard, the Naval Reserve, the 

Air Force Reserve, the Air National Guard, and the Marine Corps Reserve. 

2

 See GAO, Military Personnel: Observations Related to Reserve Compensation, 

Selective Reenlistment Bonuses, and Mail Delivery to Deployed Troops, GAO-04-582T

(Washington, D.C.: Mar. 24, 2004). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-04-1005 Military Personnel 

House Report 107-436 accompanying the Fiscal Year 2003 National 

Defense Authorization Act3

 directed us to review, among other things, 

DOD’s reserve component retirement system.4

 We assessed (1) DOD’s 

reserve retirement system as compared with certain aspects of the active 

duty retirement system, (2) the extent to which DOD data suggest that 

changes to the reserve retirement system may be warranted from a work 

force management perspective, and (3) the potential costs and effects of 

legislative proposals that address reserve retirement reform. 

A number of factors need to be considered when assessing the need for 

reserve retirement reform. Among them are the provisions of the active 

duty retirement system, the magnitude of any problemsfrom a 

workforce management and retention perspectivethat changes to the 

reserve retirement system might potentially foster, other factors such as 

costs to fund the retirement system and the health care benefits afforded 

to retired reservists,5

 and the impact on the active duty forces. Any 

proposed changes that would permanently expand benefits should also be 

considered in the context of the serious fiscal challenges facing this 

country. The long-term fiscal pressure created by the known demographic 

trends and rising health care costs, combined with increased homeland 

security and defense commitments, and moreover, the gap between the 

estimated costs of DOD’s transformation needs and likely budgetary 

resources, sharpen the need to carefully scrutinize the longer-term costs 

and implications before these changes are enacted into law. For fiscal year 

2004, DOD estimates that it will need approximately $15.1 billion to fund 

its current reserve component retirement system. 

To conduct our review, we reviewed DOD reserve retirement policies and 

studies conducted by DOD and others that address reserve retirement 

 3

 Public Law 107-314, Dec. 2, 2002. 

4

 This report is one of a series of GAO reports that address compensation and benefits 

for reserve personnel in response to this mandate. See GAO, Military Personnel: 

DOD Needs More Data to Address Financial and Health Care Issues Affecting Reservists, 

GAO-03-1004 (Washington, D.C.: Sept. 10, 2003); Military Personnel: DOD Needs to Assess 

Certain Factors in Determining Whether Hazardous Duty Pay Is Warranted for Duty in 

the Polar Regions, GAO-03-554 (Washington, D.C.: Apr. 29, 2003); and Military Personnel: 

Preliminary Observations Related to Income, Benefits, and Employer Support for 

Reservists During Mobilizations, GAO-03-549T (Washington, D.C.: Mar. 19, 2003). 

5

 Currently, retired reservists are eligible to participate in DOD’s managed health care 

system when they reach age 60. Four legislative proposals would reduce the age of 

eligibility. 
Page 3 GAO-04-1005 Military Personnel 

issues. We also collected and analyzed attrition data contained in DOD’s 

Reserve Components Common Personnel Data System as well as attrition 

and cost data from the Office of the Assistant Secretary of Defense for 

Reserve Affairs and the Office of the DOD Actuary. We reviewed 

three points in time1991, 1997, and 2003because these three points 

represent key periods when reservists were called to active duty to 

support military operations. These included Operations Desert Shield/ 

Desert Storm, military operations in the Balkans and Southwest Asia, and 

current operations in Iraq and Afghanistan. In addition, we analyzed the 

results of recent DOD web-based career satisfaction surveys that were 

administered to reservists in each of the components. Based on our review 

of databases we used, we determined that the DOD-provided data were 

reliable for our purposes. Finally, we interviewed officials in the Office of 

the Assistant Secretary of Defense for Reserve Affairs, the Office of the 

DOD Actuary, the DOD Office of the Assistant Secretary for Health Affairs, 

and DOD’s six reserve components the Army Reserve, the Army 

National Guard, the Naval Reserve, the Air Force Reserve, the Air National 

Guard, and the Marine Corps Reserve. We conducted our review from 

November 2003 through July 2004 in accordance with generally accepted 

government auditing standards. Further information on our scope and 

methodology appears in appendix I. 

The reserve component retirement system encompasses many of the 

aspects of the active duty retirement system, yet each system has certain 

unique provisions. For example, both systems require a minimum of 

20 years of service for vesting and eligibility for retirement benefits, 

provide retirement annuities that are based on 2.5 percent of basic pay for 

every creditable year served, and offer opportunities to participate in the 

federal government’s Thrift Savings Plan. The primary differences between 

the two systems are the age when active duty and reserve personnel 

receive their annuities and the effective pay rates that are used to calculate 

annuities. Eligible active duty military members receive an immediate 

annuity upon retirement that is based on pay rates in effect on the date of 

retirement. Eligible reservists must wait until age 60 to receive an annuity. 

The annuities of retired reservists who remain subject to recall are based 

on pay rates that are in effect when reservists reach their 60th birthday 

and, accordingly, their retirement is calculated at these higher pay rates. 

Current available data do not provide DOD with the information it needs 

to determine what changes, if any, to the reserve retirement system are 

warranted. While DOD has established enlisted personnel attrition ceilings 

as a performance metric for each of its six reserve components, it has not 

Results in Brief 
Page 4 GAO-04-1005 Military Personnel 

established attrition ceilings for its reserve officers. In addition, it has 

not established thresholds for attrition attributable to retirement. For 

example, almost 18,000 reservists, representing 2.1 percent of DOD’s 

selected reservists, retired from reserve duty in fiscal year 2003. Without 

thresholds or targets, however, it is not possible to assess the extent to 

which DOD is retaining the desired numbers of senior military members or 

to what extent retirement provisions influence decisions to leave or stay in 

the reserves. Furthermore, some retention rates may be artificially high 

because, at various times since September 11, 2001, DOD has implemented 

“stop loss” policies that have precluded servicemembers—both active and 

reserve—from separating from military service. Of all the services, the 

Army has made the greatest use of the stop loss policy. Nevertheless, our 

analysis of various DOD data for selected periods of time when reservists 

were called to active duty to support military operations reveals that the 

overall composition of the reserve force by years of service, age, and pay 

grade has remained relatively even and that DOD has not experienced 

significant declines in any of these variables. Similarly, departmentwide 

reserve retention rates for fiscal years 1991 through 2003 remained 

relatively stable, fluctuating between 76.5 and 82.9 percent, and the 

reserve components generally met their retention thresholds for enlisted 

personnel in recent years. In fiscal year 2003, for example, all components 

met their thresholds, with the exception of the Army National Guard and 

the Air National Guard who missed their thresholds by less than 1 percent. 

DOD has, however, identified certain high-demand occupational 

specialties where retention rates have decreased. While these cases do not 

necessarily suggest that uniform retirement reform is required, they do 

suggest that targeted corrective actions of some sort may be needed. For 

example, the retention rate for the military police within the Army Reserve 

dropped from approximately 67 percent in fiscal year 2000 to 49 percent in 

fiscal year 2003. Similarly, retention rates decreased for Army National 

Guard members in aviation—dropping from 80 percent to approximately 

30 percent in fiscal year 2002. Finally, recent responses by reservists to 

surveys administered DOD-wide reflect these retention statistics. 

Responses to questions about career intention indicated that most 

reservists intended to continue their service in the reserves. For example, 

in the most recent survey available—September 2003—67.3 percent of the 

reservists who responded to the survey indicated that they would continue 

in the reserves and noted that reserve retirement was one reason for 

joining the reserves. However, only 52.6 percent of respondents in the 

Army National Guard and 53.5 percent of respondents in the Army 

Reserve, who were or had been called to active duty, indicated that they 

would stay in the Guard or Reserves. 
Page 5 GAO-04-1005 Military Personnel 

The estimated cost of current legislative proposals to change the reserve 

component retirement system is significant and will have a number of 

associated effects. First, the estimated cost of lowering the age of receipt, 

from age 60 to as low as 53 with limitations—or, in some cases, lower—

will be significant, given that all reservists who qualify for retirement—and 

not just the minority of reservists who have deployed to recent 

contingency operations—would be covered under this change. Based on 

DOD data, our cost estimates of current legislative proposals are 

substantial, projecting that the cost of reserve retirement will increase 

from about $3 billion to over $20 billion, depending on the proposal, over 

the next 10 years. The Congressional Budget Office had not estimated the 

cost of the retirement benefit for all five legislative proposals at the time of 

our review. When associated health care costs are factored in, the total 

projected cost increase ranges from over $3 billion to almost $35 billion. 

Considering the fact that military basic pay will continue to increase and 

health care costs will continue to rise, the longer-term cost will continue 

to be significant. Second, lowering the age of receipt will align the reserve 

retirement system more closely with the active duty retirement system, 

but this change may not affect reservists who are experiencing increased 

deployments and associated hardships. Many of these reservists are not 

likely to be the beneficiaries of a reduction in the age of receipt of annuity, 

given that only one in four reservists currently stays in the reserves long 

enough to become eligible for retirement. Third, retirement is only one 

human capital management tool available to DOD’s workforce managers 

to compensate servicemembers for hardships experienced during their 

careers. For example, DOD has several special pays and allowances it can 

use to compensate deployed servicemembers, such as hazardous duty pay 

and family separation allowances. In addition, Congress has approved, but 

DOD has yet to implement, a special allowance for military personnel who 

experience frequent and/or long duration deployments. Fourth, DOD has 

recently identified a need to rebalance the reserve and active duty forces 

to reduce the stress on certain high-demand occupations. Better use of 

these human capital management tools can help DOD address the issues 

of equity and the increased use of reservists in military operations. Finally, 

DOD has not yet studied changes to the reserve retirement system in the 

context of the total force, even though these changes could have 

unintended consequences on DOD’s active duty forces. For example, if the 

reserve retirement system were changed to offer an immediate annuity 

after 20 years of creditable service, some personnel who have made career 

decisions to remain in active duty until retirement might be inclined to 

leave active duty and apply to serve their remaining time in a reserve 

component. 
Page 6 GAO-04-1005 Military Personnel 

This report contains recommendations that DOD (l) specify desired 

metrics for measuring the attrition rates of senior officer and enlisted 

reservists who are approaching retirement eligibility and, therefore, are 

most likely to be affected by changes to DOD’s reserve retirement system; 

(2) determine if gaps exist between the desired and actual rates of 

attrition; (3) identify changes, if any, to the current reserve retirement 

system that would address these gaps, to the extent that they exist; and 

(4) evaluate any changes to the reserve retirement system in the context of 

the total force. In written comments on a draft of this report, DOD stated 

that it concurred with each of the four recommendations. 

DOD has relied on its reserve forces to varying degrees over time. Reserve 

personnel are eligible to receive compensation the same as that of active 

duty personnel when called to active duty. 

Since the end of the Cold War, there has been a shift in the way DOD has 

used its reserve forces. Previously, reservists were viewed primarily as an 

expansion force that would supplement active forces during a major war. 

DOD has since moved occupational specialties that are key to conducting 

any military operation into the reserve forces and, therefore, increasingly 

relies on reservists not only to supplement but also to replace active forces 

in military operations worldwide. Accordingly, DOD has called more than 

335,000 reservists to active duty since September 11, 2001. Today’s 

increased reliance on the reserve components is a product of a number of 

factors: evolving total force policies, effects of force downsizing, 

increasing mission demands, and the Abrams Doctrine. In the aftermath of 

the Vietnam War, former Chief of Staff of the Army General Creighton 

Abrams asserted his belief that U.S. armed forces should not go to war 

again without the involvement of the National Guard and Reserve, given 

that decisions to employ reservists would reflect the national intent of the 

public. This philosophy became known as the Abrams Doctrine, and it has 

profoundly influenced DOD’s national defense strategies and plans. In fact, 

and as pointed out in the Fiscal Year 2002 Annual Report of the Reserve 

Forces Policy Board,6

 DOD entered into the Global War on Terrorism 

dependent on the reserve components as the cumulative effect of 30 years 

of adherence to the Abrams Doctrine. In the Global War on Terrorism, the 

 6

 “Current and Future Challenges.” Reserve Component Programs: The Annual Report of 

the Reserve Forces Policy Board, Office of the Secretary of Defense, April 2003. 

Background 

Dependence on Reserves 

in Military Operations 
Page 7 GAO-04-1005 Military Personnel 

reserve components are considered full partners, providing nearly one-half 

of the personnel who currently comprise the total force. The Reserve 

Forces Policy Board cautioned that if DOD retains this doctrine, reserve 

forces will be committed for the duration of military operations and used 

and stressed as never before, adding that appropriate adjustments will be 

necessary to spread the burden and provide for the long-term 

sustainability of the force. 

At the end of fiscal year 2003, DOD had approximately 1.2 million Guard 

and Reserve members in the Ready Reserve. Within the Ready Reserve, 

there are three subcategories, the Selected Reserve, the Individual Ready 

Reserve,7

 and the Inactive National Guard.8 Figure 1 shows how the Ready 

Reserve is organized. 

 7

 The Individual Ready Reserve is comprised principally of individuals who (1) have had 

training, (2) have served previously in an active component or the Selected Reserve, and 

(3) have some period of their military service obligation remaining. Members may 

voluntarily participate in training for retirement points and promotion with or without pay. 

Within the Individual Ready Reserve, there is a special category of members who have 

volunteered to be called to active duty under 10 U.S.C. 12304 when needed. 

8

 The Inactive National Guard consists of National Guard personnel in an inactive status in 

the Ready Reserve who are attached to a specific National Guard unit. To remain in the 

Inactive National Guard, members must muster once a year with their assigned unit, but 

they do not participate in training activities. Inactive National Guard members may not 

train for points or pay and are not eligible for promotion. 

Composition of the 

Reserve Forces 
Page 8 GAO-04-1005 Military Personnel 

Figure 1: Organizational Chart of the Ready Reserve 

The Selected Reserve consists of reservists who serve in Selected Reserve 

units, as Individual Mobilization Augmentees,9

 as active Guard and Reserve 

members,10 and as full-time support assets, such as military technicians.11

DOD’s selected reservists serve in one of six reserve components: the 

Army Reserve, the Army National Guard, the Naval Reserve, the Air Force 

Reserve, the Air National Guard, and the Marine Corps Reserve. The Army 

National Guard and the Air National Guard comprise what is known as the 

National Guard. As of fiscal year 2003, the Selected Reserve had a total 

number of 875,072 members. All selected reservists are subject to being 

 9

 Individual Mobilization Augmentees are trained individuals assigned to an active 

component, Selective Service System, or Federal Emergency Management Agency 

organization’s billet, which must be filled on or shortly after mobilization. Individual 

Mobilization Augmentees participate in training activities on a part-time basis with an 

active component unit in preparation for recall in a mobilization. The inactive duty training 

requirement for Individual Mobilization Augmentees is decided by DOD component policy 

and can vary from 0 to 48 drills a year. A minimum of 12 days of annual training is required 

of all Individual Mobilization Augmentees. 

10 Active Guard and Reserve personnel are members of the Selected Reserve who are 

ordered to active duty or full-time National Guard duty for the purpose of organizing, 

administering, recruiting, instructing, or training the reserve component units. All Active 

Guard and Reserve members must be assigned against an authorized mobilization position 

in the unit they support. Units include the Navy Training and Administration of Reserve, 

and the Marine Corps Active Reserve programs. 

11 Military technicians—who provide full-time support to the reserve components—

concurrently serve as civilian employees and selected reservists and receive retirement 

annuities from both the federal civilian retirement system and the military reserve 

retirement system. 

Selected Reserve units

(includes military

technicians)

Selected

Reserve

Individual

Ready

Reserve

Inactive

National

Guard

Active

Guard/Reserve

Individual

Mobilization

Augmentees

Ready Reserve

Source: GAO presentation of DOD data.
Page 9 GAO-04-1005 Military Personnel 

called to active duty before reservists in any of the other reserve 

categories. The President has the authority to order up to 200,000 selected 

reservists to active duty involuntarily for any operational mission—for not 

more than 270 days—without declaring a national emergency. Therefore, 

reservists must be prepared to report for active duty within 24 hours. 

The purpose of each selected reserve component is to provide trained 

units and qualified persons available for active duty in the armed forces in 

times of war or national emergency, and at such other times as the 

national security may require, to fill the needs of the armed forces 

whenever needed.12 The National Guard is unique in that it has dual 

missions, both federal and state; when not in federal service, the Guard is 

available for use as provided by the constitution and laws of the state. The 

Guard is the only military force immediately available to a governor in 

times of emergency, including civil unrest and natural or manmade 

disasters. Under state law, the Guard provides protection of life and 

property and preserves peace, order, and public safety. 

Reliance on Guard and Reserve members varies from service to service. 

Figure 2 shows that, in fiscal year 2003, 53 percent of the Army’s soldiers 

served in the Army National Guard or the Army Reserve and that 

33 percent of Air Force military personnel served in the Air National 

Guard and the Air Force Reserve. Figure 2 also shows that the percentage 

of personnel serving in the Naval and Marine Corps Reserves was less than 

20 percent for both components. 

 12 10 U.S.C. 10102. 
Page 10 GAO-04-1005 Military Personnel 

Figure 2: Percentage of Total Personnel, by Service, Serving on Active Duty or in 

One of the Reserve Components in Fiscal Year 2003 

In 1948, Congress passed the Army and Air Force Vitalization and 

Retirement Equalization Act—which established the reserve retirement 

system—because it believed that reservists did not receive sufficient 

salary as an incentive for a career and that, as reservists approached 

mid-career, they would leave reserve service unless an additional incentive 

were offered to them. Congress established a retirement annuity, 

receivable at age 60 upon completion of at least 20 years of service, to 

provide them with this additional incentive. The sole purpose of reserve 

retirement is to provide a monetary incentive for qualified reserve 

personnel to retain membership in the reserve components and continue 

their training. This incentive provides the reserves with a pool of skilled, 

trained, and readily available personnel to augment active duty forces in 

times of national emergency. The reserve retirement system has remained 

essentially unaltered since enactment in 1948. The Assistant Secretary of 

Defense for Reserve Affairs, under the Office of the Under Secretary of 

Defense for Personnel and Readiness, is responsible for DOD’s reserve 

Pay and Benefits 

Percentage of personnel serving in active duty, guard, or reserve status

0

10

20

30

40

50

60

70

80

90

100

Army Air Force Marine

Corps

Navy

Army/Air Force/Marine Corps/Naval Reserve

Army National Guard/Air National Guard

Active duty personnel

47.0

67.2

81.2 81.3

33.1

19.4

19.9

13.4

18.8 18.7

Source: GAO analysis of DOD data.
Page 11 GAO-04-1005 Military Personnel 

retirement policy, and the reserve retirement system is funded through 

DOD’s reserve military personnel appropriations. 

Reservists are currently entitled to a range of pay and benefits, depending 

on whether they are serving in part-time drilling or activated full-time duty 

status. When in normal part-time drilling status, reservists receive basic 

pay13 on a prorated basis and are entitled to such benefits as unlimited 

access to commissaries, certain health care benefits, educational benefits, 

and life insurance. Reservists activated for contingency operations are 

eligible to receive the same compensation and benefits as active duty 

personnel.14 While serving on active duty, reservists are entitled to basic 

pay and special pays and allowances at equivalent rates for active duty 

personnel and full health care benefits for themselves and their 

dependents. 

By law,15 DOD is required to undertake a comprehensive review of military 

compensation every 4 years, and DOD compiles the findings and 

recommendations of these reviews into a report known as the Quadrennial 

Review of Military Compensation. In 1986, DOD was tasked by the 

President to perform an evaluation of the benefits and costs of reserve 

compensation. The resulting Sixth Quadrennial Review of Military 

Compensation was the first comprehensive review of reserve 

compensation that employed analytical models to assess the effects of the 

existing reserve compensation system and evaluate the costs and benefits 

of alternatives. The most recent quadrennial review assessed the 

effectiveness of current military compensation policies in recruiting and 

retaining a high-quality force. The Ninth Quadrennial Review of Military 

Compensation was conducted in 2002. 

 13 Basic military compensation consists of basic pay, basic allowance for housing, basic 

allowance for subsistence, and the federal tax advantage. The federal tax advantage is to 

account for the tax-free status of housing and subsistence allowances. It is the added 

amount of taxable income that servicemembers would have to receive in cash if housing 

and subsistence allowances were to become taxable in order for them to be as well off in 

after-tax income as they are under the existing system. Basic compensation does not 

include special and incentive pays and other allowances, such as deployment pays. 

14 For a listing of benefits, see Military Personnel: Active Duty Benefits Reflect 

Changing Demographics, but Opportunities Exist to Improve, GAO-02-935

(Washington, D.C.: Sept. 18, 2002). 

15 37 U.S.C. 1008(b). 
Page 12 GAO-04-1005 Military Personnel 

Both active duty and reserve component retirement systems operate under 

the same military compensation principles. Differences exist between 

them because the reserve retirement system was not intended to be 

comparable to active duty retirement when it was created in 1948. 

Similarities between the systems include a minimum of 20 years of 

service for vesting and eligibility for retirement benefits, a calculation of 

retirement pay at 2.5 percent of basic pay for every creditable year 

served, and an opportunity to participate in the federal government’s 

Thrift Savings Plan. The primary differences between the two systems are 

(1) the age when active duty and reserve personnel receive their annuities 

and (2) the effective pay rates that are used to calculate annuities. An 

eligible active duty military member receives an immediate annuity upon 

retirement that is based on pay rates in effect on the date of retirement. An 

eligible reservist must wait until age 60—the age at which federal civilian 

employees could retire in 1948—to receive an annuity. Retired reservists 

who remain subject to recall receive an annuity that is based on pay rates 

in effect when they reach age 60, and, accordingly, the retirement is 

calculated at these higher pay rates. Table 1 shows various retirement 

provisions that are available to active duty and reserve personnel. 

Table 1: Availability of Retirement Provisions 

Retirement 

provisions 

Annuity 

after 

20 years 

of service 

Thrift 

Savings 

Plan 

Thrift 

Savings 

Plan 

matching 

funds 

Annuity 

based on 

2.5 percent 

of creditable 

years of 

service 

Receipt of 

annuity upon 

retirement 

Receipt of 

annuity at 

age 60 

Annuity 

based on 

effective 

basic pay 

rates at date 

of discharge 

Annuity 

based on 

higher 

effective 

basic pay 

rates at 

age 60 

Active duty 

personnel X X Xa

 X X X 

Reserve 

personnel X X X X Xb

 X 

Source: GAO. 

a

DOD has the authority to offer matching funds to active duty members serving in critical occupations 

but had not exercised this authority as of July 2004. See 37 U.S.C. 211(d). 

b

An option exists for reservists to separate entirely from the reserves upon completing 20 years of 

qualifying service. Those reservists who select this option are no longer subject to being called to 

active duty. However, their retirement annuities, which they do not receive until age 60, are based on 

pay rates that were in effect at the date of separation from the service. 

The Reserve 

Component 

Retirement System 

Mirrors the Active 

Duty Retirement 

System but Has 

Differences 
Page 13 GAO-04-1005 Military Personnel 

The active duty and reserve component retirement systems contain many 

of the same aspects, but they were not intended to be the same. 

Similarities between the retirement systems are due to the fact that the 

underlying principles for both retirement systems are the same. The 

purpose of the military compensation system—of which retirement is one 

part—is to attract, retain, and motivate the number of quality personnel 

needed to maintain the desired level of national security. DOD has said 

that the military retirement systems—both active duty and reserve—

should support and complement force management requirements (e.g., 

youth, vigor, and career development opportunities); be integrated into the 

military compensation system; and be structured to replace and maintain 

income for retirees. Both retirement systems have the shared purpose of 

maintaining a pool of skilled, trained, and readily available personnel 

subject to recall during time of war or national emergency. 

Differences between the retirement systems exist, however, because the 

reserve retirement system was originally intended to compensate civilian 

reserve retirees differently than active duty retirees. The active duty 

retirement system, which was created in the mid-1800s, was originally 

intended to provide for the separation of older officers with over 40 years 

of service to obtain a youthful and vigorous officer force, and improve 

promotion opportunities for younger officers. This active duty retirement 

system has been substantially modified over time. For example, the 

provision enabling active duty military personnel to retire after 20 years 

was first introduced in 1915. More than 30 years later, the 20-year 

provision was adopted for all active duty officers and enlisted personnel in 

all services. When the reserve component retirement system was created 

in 1948, Congress and the War and Navy Departments did not intend that it 

should be comparable to the active duty retirement system. In contrast, 

the purpose of the reserve retirement system was to improve retention, as 

opposed to encouraging attrition, by providing a financial incentive for 

qualified personnel to maintain their reserve affiliation and continue 

training in the reserves. Establishing age 60—the age at which federal 

civilian employees could retire in 1948—as the age at which reservists 

would be eligible to receive retirement annuities provided a mechanism to 

retain reservists for a longer period of time while compensating civilian 

reserve retirees differently than active duty retirees.16

 16 In 1967, Public Law 90-83, Sec. 1(75) created an entitlement for federal civilian employees 

to receive an annuity at age 55 with 30 years of service or at age 60 with 20 years of service. 

The Active Duty and 

Reserve Component 

Retirement Systems 

Were Not Intended to 

Be the Same 
Page 14 GAO-04-1005 Military Personnel 

Both the active duty and the reserve component retirement systems 

require 20 years of service for vesting and benefit eligibility. The fact that 

neither the active duty nor the reserve component retirement system 

provides for reduced annuities if personnel serve less than 20 years 

provides a strong incentive for servicemembers to either leave the military 

after serving only a few years or stay in the military for 20 years or longer. 

For active duty members, each year of service counts as a qualifying year 

for retirement purposes. Reservists must earn a minimum of 50 points, 

each year, for the year to qualify for retirement purposes. Reservists 

typically train one weekend each month and earn 4 points for each 

weekend (two drills per day). In addition, they earn 1 point for each day of 

annual active duty training (typically 12 points for a 2-week period) and an 

additional 15 points annually for being a member of a reserve unit. 

Reservists earn an additional point for each day that they are called to 

serve on active duty. Between fiscal year 1992 and fiscal year 2001, 

reservists earned, on average, 64 retirement points per year. In fiscal year 

2003, reservists earned, on average, 138 retirement points. The increase is 

likely due to the number of reservists who were called to active duty. 

Appendix II provides a more detailed discussion of the reserve retirement 

points system. 

Generally speaking, both retirement systems apply a rate of 2.5 percent 

to the number of creditable years served and then apply this rate to 

servicemembers’ basic pay to determine retirement annuities.17 In the case 

of reserve personnel, the number of creditable years served is, essentially, 

a prorated number of calendar years of service. (Specifically, reserve years 

of creditable service are calculated by dividing a reservist’s accumulated 

retirement points by 360—roughly, the number of days in a year.) 

Typically, current active duty servicemembers who retire after serving 

20 years on active duty receive retirement annuities that are equivalent to 

50 percent of average basic pay over their last 3 years of service. Current 

active duty servicemembers who retire after serving 30 years on active 

duty receive retirement annuities that are equivalent to 75 percent of their 

 17 For active duty servicemembers who entered the service prior to September 8, 1980, this 

rate is applied to a servicemember’s final basic pay at the date of retirement. For most 

reservists who entered the service prior to September 8, 1980, this factor is applied to basic 

pay rates in effect on the retired reservist’s 60th birthday. For active duty servicemembers 

who entered the service on or after September 8, 1980, this factor is applied to a 

servicemember’s average basic pay during the last 36 months of service. For most 

reservists who entered the service on or after September 8, 1980, this factor is applied to 

the average annual basic pay rates in effect during the 3 years prior to the reservist’s 

60th birthday. 

The Active Duty and 

Reserve Component 

Retirement Systems Have 

Similar Features 
Page 15 GAO-04-1005 Military Personnel 

final basic pay.18 In contrast, current reserve members who retire after 

serving all 20 years in the reserves, and who earn only the minimum 

50 required points in each of those years, would receive annuities that will 

be equivalent to approximately 7 percent of basic pay. Most reservists, 

however, earn more than 50 points each year. Reservists can apply a 

maximum of 90 points each year toward their retirement calculation—

earned from their weekend drills and annual 2-week period of active duty 

training—but can apply up to 365 points each year if they are called to 

active duty. Reservists who are called to active duty will earn more points, 

which will translate into a higher retirement annuity, if they serve their full 

20 years. In addition, many reservists previously served some time on 

active duty before affiliating with one of the reserve components. 

Therefore, while their retirement annuities will be significantly less than 

the annuities of their active duty counterparts, the annuities of retired 

reservists who served on active duty at points during their careers will be 

greater than 7 percent of basic pay. 

Beginning in fiscal year 2001, both active duty and reserve personnel 

became eligible to participate in the federal government’s Thrift Savings 

Plan on a voluntary basis. The Thrift Savings Plan is a tax-deferred savings 

and investment plan only available to currently employed federal 

government employees and provides active duty and reserve 

servicemembers the opportunity to contribute additional funds to their 

retirement. Service secretaries have the legislative authority, if they 

choose, to provide matching funds for active duty personnel in critical 

military occupational specialties, but not for reservists. Agency officials 

frequently cite monetary recruitment and retention incentives as effective 

for hard-to-fill positions.19 To date, the service secretaries have not used 

this human capital flexibility for any active duty military personnel. 

 18 An active duty servicemember has the option of retiring under an alternative retirement 

system, known as REDUX, which reduces the percentage factor of 2.5 percent—and, 

therefore, the amount of the annuity—for each year that a servicemember retires with less 

than 30 years of service. However, this alternative retirement system also provides a 

servicemember with a $30,000 bonus at 15 years of service. The system, which was made 

voluntary in fiscal year 2000, was designed to encourage longer-term retention by providing 

an incentive for servicemembers who complete 20 years of service, and who are otherwise 

eligible, to remain on active duty beyond 20 years. 

19 GAO, Human Capital: Effective Use of Flexibilities Can Assist Agencies in Managing 

Their Workforces, GAO-03-2 (Washington, D.C.: Dec. 6, 2002). 
Page 16 GAO-04-1005 Military Personnel 

One significant difference between the active duty and reserve retirement 

systems is the age at which retirees receive their annuities. Active duty 

personnel immediately qualify for receipt of an annuity after 20 years of 

service, should they decide to retire, that compensates them for lost 

income potential. The Defense Science Board Task Force on Human 

Resources Strategy stated in a 2000 report that many, if not most, active 

duty retirees suffer a “second-career” earnings loss when transitioning to 

the civilian sector in their 40s or 50s and that immediate receipt of 

retirement pay reduces the financial penalty associated with the transition 

to a second career. As a result, the immediate annuity provides a strong 

incentive for active duty personnel to retire when eligible. Reservists 

similarly become eligible for retirement upon completing 20 years of 

service, but they are not eligible to receive an annuity until their 

60th birthdaythe age at which federal civilian employees could retire 

when the reserve retirement system was enacted. The incentive for 

reservists to separate once retirement eligibility is achieved is not as 

strong, given that their retirement annuity is delayed until they reach 

age 60. 

A second significant difference between the two retirement systems is the 

basic pay rate that is used to calculate retirement annuities. Active duty 

retirement pay is based on basic pay rates that are in effect when active 

duty servicemembers retire. Reserve retirement pay is calculated 

differently, depending on retirement options that reservists select. 

Reservists who attain 20 years of qualifying service for retirement 

purposes and who elect to retire can, if otherwise eligible, (1) continue 

their affiliation in the reserves in a nondrilling status, (2) transfer to retired 

reserve status in which they retain their reserve affiliation but are not 

required to train, or (3) request a discharge. Reservists who continue their 

reserve affiliation in a nondrilling status do not drill or receive basic pay, 

but they can acquire additional retirement points.20 In addition, they 

remain subject to being involuntarily called back to active duty. Reservists 

who transfer to retired reserve status do not earn basic pay or additional 

retirement points. They are, however, also subject to being involuntarily 

called back to active duty. Retirement pay for reservists who retain some 

form of affiliation with the reserves, and who are subject to involuntary 

recall to active duty until they reach age 60, is based on pay rates that are 

in effect on the reservists’ 60th birthday. Accordingly, this provision 

 20 For example, reservists who are in a nondrilling status can earn additional retirement 

points by successfully completing correspondence courses. 

The Main Differences 

between the Two Systems 

Are the Age of Receipt of 

Annuity and the Effective 

Pay Rates Used to 

Calculate Annuities 
Page 17 GAO-04-1005 Military Personnel 

creates an incentive for reservists to retain their affiliation with the 

reserves until age 60 in order to benefit from the calculation of their 

annuity at the higher pay rate. Reservists who request a discharge from the 

reserves once they become retirement eligible are not subject to being 

called back to active duty. They also do not receive their annuities until 

their 60th birthday, but their retirement annuities are derived from basic 

pay rates in effect at the date of discharge. 

Current available data do not provide DOD with the information it needs 

to determine what changes, if any, to the reserve retirement system are 

warranted. While DOD has established enlisted personnel attrition ceilings 

as a performance metric for each of its six reserve components, it has not 

established attrition ceilings for its reserve officers. In addition, it has not 

established thresholds or targets for attrition attributable to retirement. In 

fiscal year 2003, for example, 2.1 percent of DOD’s selected reservists 

retired from reserve duty. Without thresholds or targets, it is not possible 

to assess the extent to which DOD is retaining the desired numbers of 

senior military members or the extent to which retirement provisions 

influence decisions to leave or stay in the reserves. Furthermore, some 

retention rates may be artificially high because, at various times since 

September 11, 2001, DOD has implemented “stop loss” policies that have 

precluded servicemembers—both active and reserve—from separating 

from military service. Of all the services, the Army has made the greatest 

use of this policy. Nevertheless, our analysis of various DOD data for 

selected periods of time when reservists were called to active duty to 

support military operations reveals that the overall composition of the 

reserve force by years of service, age, and pay grade has remained 

relatively even and that DOD has not experienced significant declines in 

any of these variables. Similarly, departmentwide reserve retention rates 

for fiscal years 1991 through 2003 remained relatively stable, fluctuating 

between 76.5 and 82.9 percent and the reserve components generally met 

their retention thresholds for enlisted personnel in recent years. In fiscal 

year 2003, for example, all components met their thresholds, with the 

exception of the Army National Guard and the Air National Guard who 

missed their thresholds by less than 1 percent. DOD has, however, 

identified certain high-demand occupational specialties where retention 

rates have decreased. While these cases do not necessarily suggest that 

uniform retirement reform is required, they do suggest that targeted 

corrective actions of some sort may be needed. For example, the retention 

rate for the military police within the Army Reserve dropped from 

approximately 67 percent in fiscal year 2000 to 49 percent in fiscal year 

2003. Similarly, the retention rate decreased for Army National Guard 

The Extent to Which 

Changes Are 

Warranted to the 

Reserve Retirement 

System Is Unknown 
Page 18 GAO-04-1005 Military Personnel 

members in aviation, dropping from 80 percent to approximately 

30 percent in fiscal year 2002. Finally, recent responses by reservists to 

surveys administered DOD-wide reflect these retention statistics. 

Responses to questions about career intent indicated that most reservists 

intended to continue their service in the reserves. For example, in the 

most recent survey available—September 2003—67.3 percent of all 

reservists who responded indicated that they would continue in the 

reserves and noted that reserve retirement was a reason for joining the 

reserves. 

DOD does not have complete data to properly identify whether changes to 

the reserve retirement system are needed. Our prior work21 has shown that 

one of the critical success factors for strategic human capital management 

is the use of reliable data to make human capital decisions. A fact based 

performance-oriented approach to human capital management is crucial 

for maximizing the value of human capital as well as managing relative 

risks. Accordingly, DOD has established enlisted personnel attrition 

ceilings as a performance metric, for each of its six reserve components, 

which vary by component. For example, for fiscal years 2003 through 

2005, the attrition ceilings range from a low of 12 percent in the Air 

National Guard to a high of 36 percent in the Naval Reserve. According to 

DOD, these ceilings represent the maximum number of losses deemed 

acceptable in a given fiscal year that are not to be exceeded. However, 

DOD has not established attrition ceilings for its reserve officers.22 An 

official within the Office of the Assistant Secretary of Defense for Reserve 

Affairs stated that DOD historical data indicate that military officers tend 

to be more career-focused than enlisted personnel. While on occasion 

there are some officer retention issues, DOD has generally found that 

long-term officer retention is more stable and higher than enlisted 

personnel retention. Consequently, DOD has not identified a need for 

establishing officer attrition ceilings. 

 21 GAO, Exposure Draft: A Model of Strategic Human Capital Management, 

GAO-02-373SP (Washington, D.C.: March 2002). 

22 DOD prefers to measure attrition rates rather than retention rates, given that only a small 

portion of the reserve population is eligible for reenlistment during any given year. In 

assessing enlisted personnel retention trends in the reserve components, DOD computes 

enlisted personnel attrition rates against established annual targets by dividing total losses 

from a reserve component in a given fiscal year by the average personnel strength for that 

component in the same year. 

Current Available Data Do 

Not Provide DOD with 

Complete Information 
Page 19 GAO-04-1005 Military Personnel 

Furthermore, DOD has not established similar ceilings for the subset of 

reserve attrition that can be attributed to retirement for officers or enlisted 

personnel. For example, 17,959 reservists, representing 2.1 percent of the 

Selected Reserve, retired from selected reserve duty in fiscal year 2003. 

Without ceilings or targets against which to measure attrition attributable 

to retirement, however, it is not possible to assess the extent to which 

DOD is retaining the desired number of senior reserve officer and enlisted 

personnel or to determine whether changes to the reserve retirement 

system are needed to manage the force. In other words, without targets, 

DOD cannot determine if 2.1 percent attrition due to retirement is 

desirable. 

Identifying or establishing retirement goals would be beneficial to DOD for 

several reasons. First, retirement is a force-shaping tool. As we previously 

stated, the purpose of DOD’s retirement systems—both active and 

reserve—should support force management requirements (e.g., youth, 

vigor, and career development opportunities) in addition to replacing or 

maintaining income for retirees. Second, retirement policies provide the 

primary financial incentive available to those senior personnel most likely 

to be affected by retirement policies. According to DOD’s Sixth 

Quadrennial Review of Military Compensation, reserve retirement 

provisions begin to shape the retention decisions of military personnel 

with as little as 5 to 7 years of service, and the effect of these provisions 

on retention decisions gradually increases as servicemembers approach 

20 years of service. This can be attributed, in part, to the fact that DOD’s 

retirement systems do not provide reduced annuities to members who 

serve less than 20 years. DOD officials have observed that the retirement 

incentive has a noticeable retention effect that begins at the 12th to 14th 

year of service. DOD assumes that most personnel who have more than 

14 years of service have decided to make a career out of the military and 

will stay until they are eligible for retirement, and DOD data show that 

attrition rates decline as servicemembers approach 20 years of service. 

Accordingly, DOD does not offer retention bonuses to military members 

who have served 14 years or longer. Third, retirement is a very expensive 

force-shaping tool. As noted earlier, for fiscal year 2004, DOD estimates 
Page 20 GAO-04-1005 Military Personnel 

that it will need about $15.1 billion to fund its current reserve retirement 

system.23

Finally, DOD does not have the best data available to determine if changes 

are needed because it has implemented “stop loss” policies in recent years 

that have precluded servicemembers—both active and reserve—from 

separating from military service. As a result, retention rates may be 

artificially high. At various times since September 11, 2001, all of the 

services have employed stop loss policies for both active duty personnel 

and reservists at different times and in different ways. Stop loss policies 

include, but are not limited to, the following examples. The Air Force was 

the first service to use “stop loss” and invoked it for the entire Air Force 

between September 2001 and January 2002. The Navy soon followed by 

implementing stop loss for certain specialties between September 2001 

and February 2002. The Marine Corps instituted stop loss for certain 

specialties beginning in December 20, 2001, and terminated all stop loss in 

May 2003. The Army began using stop loss in November 2001 and, as of the 

issuance of this report, the Army is the only service operating a stop loss 

policy.24 Many within and outside of DOD are concerned about the impact 

that lifting stop loss in the Army will have on attrition. While some fear 

that servicemembers will leave the military in great numbers, others 

encourage caution, suggesting that while a spike in attrition might occur, it 

would be prudent to wait to see if the spike is temporary or long lasting. It 

is important to note that a number of Army personnel affected by the stop 

loss policy had already planned to leave the service upon completion of 

their military obligation. Thus, some service members’ departure is simply 

delayed. 

DOD should not only be able to measure the degree to which its 

retirement system is meeting its goals but also assess how well the 

retirement system helps the organization achieve its goals and pursue its 

 23 Until 1984, the amount appearing in the DOD budget under military retirement reflected 

the annual amount paid to current retired military personnel or their survivors. In 1984, 

Congress directed DOD to switch to an accrual method for accounting for military 

retirement in the budget process. (10 U.S.C. 1465(c).) An accrual method attempts, instead, 

to reflect the liability arising from future retirees in current budgets. This mechanism 

assumes that DOD will contribute a constant percentage of an individual servicemember’s 

pay annually to the accrual account. 

24 Current Army policy prevents active and reserve component members from leaving the 

service from the time their unit is alerted until 90 days after their unit returns from active 

duty. 
Page 21 GAO-04-1005 Military Personnel 

mission. This assessment would then enable DOD to determine if changes 

to its reserve retirement system are needed from a workforce management 

perspective. The fact that DOD has established attrition goals for its 

reserve enlisted personnel is helpful. However, establishing goals for the 

subset of attrition that is attributable to retirement would provide DOD 

with even more meaningful data. For example, if overall attrition remained 

constant but retirement attrition decreased, this trend could suggest that 

the attrition was occurring at earlier career points and that fewer 

servicemembers were deciding to make the military reserves a career. We 

have previously reported that high-performing organizations identify their 

current and future human capital needs and then create strategies for 

identifying and filling gaps.25 The types of data that can inform workforce 

planning efforts include, but are not limited to, the size and shape of the 

workforce, skills inventory, attrition rates, and projected retirement rates 

and eligibility. We previously testified26 that it is important to consider the 

impact of retirement on the age and experience distribution of the force, 

but that DOD lacked critical data needed to assess alternatives to the 

existing retirement system. DOD also testified that retirement benefits 

help shape the force by creating a reserve force with certain 

characteristics and a specific distribution of personnel by rank and years 

of service. However, officials in DOD’s Office of the Assistant Secretary of 

Defense for Reserve Affairs told us that they currently do not have any 

way to empirically measure the retention effects of the reserve retirement 

system. According to a 2001 study conducted for the 9th Quadrennial 

Review of Military Compensation, DOD should (1) assess whether the 

current skill, experience, and age composition of the reserves are 

desirable and, if not, what they should look like now and in the future and 

(2) develop an accession and retention model to evaluate how successful 

varying combinations of compensation and personnel management 

reforms would be in moving the reserves toward that preferred 

composition. 

 25 See GAO-02-373SP. 

26 See GAO-03-549T. 
Page 22 GAO-04-1005 Military Personnel 

Our analysis of DOD workforce profile data over three points in time—

1991, 1997, and 200327—for enlisted and officer reservists, by years of 

service, age, and pay grade, does not demonstrate that significant gaps 

have occurred in the reserve component workforce that might suggest that 

changes to the reserve component retirement system are warranted from a 

workforce management perspective. In fact, our analysis revealed that, on 

average, reserve enlisted personnel had more years of service and were 

slightly older in 2003 than in 1991. For example, the average years of 

service of reserve enlisted personnel was 1 to 3 years higher, for all 

components, in calendar year 1997 than it was in calendar year 1991 and, 

with the exception of the Marine Corps Reserve (which dropped by 

1 year), the average years of service was the same at the end of calendar 

year 2003 as it was at the end of calendar year 1997. Correspondingly, the 

average age for all enlisted reservists was 1 to 3 years older in calendar 

year 1997 than in calendar year 1991. For the most part, average pay 

grades remained constant over the three points in time. Similarly, our 

analysis of reserve officers revealed that, on average, they also had 

more years of service and were slightly older in 2003 than in 1991. Their 

average pay grades remained constant across all components and points in 

time. More detailed force profile data are presented in appendix III. 

In general, reservists had more years of service and were older than their 

active duty counterparts. In calendar year 2003, for example, reserve 

officer and enlisted personnel served an average of 17 and 11 years, 

respectively, compared to active duty officers and enlisted personnel, who 

served an average of 11 and 8 years, respectively. The average age of 

reserve officers was 40 in calendar year 2003, and the average age of active 

duty officers was 35. The average age of reserve enlisted personnel was 33 

in calendar year 2003, and the average age of active duty enlisted 

personnel was 28. The average pay grade of reserve officers was O-3 in 

calendar year 1991 and O-4 in 1997 and 2003, while the average pay grade 

for active duty officers was O-3 in all three calendar years. The average 

reserve enlisted pay grade was E-5 in all three calendar years. The average 

active duty enlisted pay grade was E-4 in calendar year 1991 and E-5 in 

calendar years 1997 and 2003. 

 27 The three points in time—1991, 1997, and 2003—were selected because they coincided 

with major military events—Operations Desert Shield/Desert Storm, military operations in 

Southwest Asia and the Balkans, and current military operations in Iraq and Afghanistan, 

respectively. 

Analysis of DOD 

Workforce Data Does Not 

Suggest That Changes to 

the Reserve Retirement 

System Are Warranted 

Reservists Compared to 

Active Duty Counterparts 
Page 23 GAO-04-1005 Military Personnel 

An analysis of retention rates also did not indicate problems to suggest 

that changes to the reserve retirement system are needed. Retention of 

reservists between fiscal year 1991 and fiscal year 2003 remained relatively 

stable, fluctuating between 76.5 and 82.9 percent. Retention rates for 

reserve enlisted personnel were just slightly lower, fluctuating between 

75.1 and 82.3 percent, and retention rates for officers were somewhat 

higher, ranging between 83.7 and 87.4 percent. Figure 3 shows reserve 

retention rates for officers, enlisted personnel, and all reservists from 

fiscal year 1991 through fiscal year 2003. 

Figure 3: Total DOD Reserve Component Retention Rates, and Retention Rates for Officer and Enlisted Reservists, 

Fiscal Years 1991 through 2003 

In general, the reserve components met DOD-established thresholds for 

enlisted personnel attrition in recent years. In fiscal year 2003, all 

components met their goals, with the exception of the Army National 

Guard and the Air National Guard, which missed their targeted thresholds 

by less than 1 percent. In fiscal years 2001 and 2002, all components met 

their goals, except for the Army National Guard, which missed its targeted 

thresholds by approximately 2 percent each year. Finally, in fiscal year 

Retention Rates Have 

Remained Fairly Constant 

Overall 

Percentage

68

70

72

74

76

78

80

82

84

86

88

90

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Years

Officers

Total DOD reserve component

Enlisted

Source: GAO analysis of DOD data.

86.6

84.7 85.1

83.7

84.5

83.7 84

85.7

87.4

80.4

79.6

78 77.9 77.5 77.4

76.5

78.1

82.9

82.3

76.9

75.1

76.4 76.1 76.8 76.9

78.5 79.1 79.3 79.1

80.4 80.8

86.8 86.6 86.3 86.8

80.4 80.2

81.3 81.7
Page 24 GAO-04-1005 Military Personnel 

2000, all components met their targeted thresholds except for the Army 

Reserve, which missed its threshold by less than 1 percent. 

We also examined the career points at which attrition occurred. 

Our analysis of retention data shows that relatively little attrition 

occurred among reservists with more than 14 but less than 20 years of 

service—those reservists most likely to be affected by retirement policies. 

(See appendix IV for more information on attrition of reserve personnel, 

by years of service, for fiscal years 1991, 1997, and 2003.) 

DOD has, nonetheless, identified certain high-demand occupational 

specialties where retention rates have decreased. These cases do not 

necessarily suggest that uniform retirement reform is required. However, 

they do suggest that DOD may need to take targeted corrective action, 

using any number of human capital management tools available to DOD, to 

address those specialties that are experiencing significant attrition. 

Personnel in the fields of aviation, special forces, security, intelligence, 

psychological operations, and civil affairs, for example, have experienced 

a pace of operation two to seven times higher than those of the average 

reservist. Retention rates for military police in the Army Reserve, for 

example, decreased from approximately 67 percent in fiscal year 2000 to 

49 percent in fiscal year 2003. Similarly, retention decreased for Army 

National Guard members in aviation, dropping from 80 percent in fiscal 

year 2000 to approximately 30 percent in fiscal year 2002. Additionally, 

from fiscal year 2000 to 2002, the retention rates of Marine Corps Reserve 

members in civil affairs were consistently lower than the overall retention 

rates for the entire Marine Corps Reserve. 

Responses by reservists to questions about career intention in recent 

surveys administered by DOD indicate that, if given a choice, most 

reservists intended to continue their service in the reserves. These surveys 

were conducted during 2000 and in May and September of 2003.28

Responses by reservists in the 2000 survey indicated that 71.8 percent of 

respondents intended to stay in the reserves. This percentage remained 

 28 A more recent survey was conducted in April 2004, the results of which should be 

available by fall 2004, according to officials in the Office of the Assistant Secretary of 

Defense for Reserve Affairs. 

Retention Problems 

Have Surfaced in 

Some High-Demand 

Occupational Specialties 

Recent DOD-wide Survey 

Responses Reflect 

Retention Data 
Page 25 GAO-04-1005 Military Personnel 

relatively stable at 71.4 percent in May 2003, but it dropped to 67.3 percent 

in September 2003. Responses from reservists in each of the components, 

who had been or were deployed overseas, however, showed greater 

variation. For example, in the most recent survey available—September 

2003—67.3 percent of the reservists who responded to the survey 

indicated that they would continue in the reserves, and a majority of 

reservists noted that reserve retirement was a reason for joining the 

reserves. However, only 52.6 percent of respondents in the Army National 

Guard and 53.5 percent of respondents in the Army Reserve, who were or 

had been called to active duty, responded that they would stay in the 

Guard or Reserves.29 In the September 2003 survey, more than one-half of 

the respondents cited the opportunity to earn a retirement pension as a 

factor that influenced their decision to join the Guard or Reserves. About 

68.8 percent of higher graded officers (O-4 to O-6) and 66.5 percent of 

higher graded enlisted personnel (E-5 to E-9) cited the reserve retirement 

system as a reason to join the Reserves, compared with 50.5 percent of 

lower graded officers (O-1 to O-3) and 37.5 percent of lower graded 

enlisted personnel (E-1 to E-4).30

The estimated cost of current legislative proposals to change the reserve 

retirement system is significant and will have a number of associated 

effects. First, the estimated cost of lowering the age of receipt, from age 60 

to as low as 53 with limitations—or, in some cases, lower—will be 

significant, given that all reservists who qualify for retirement—and not 

simply the minority of reservists who have deployed to recent contingency 

operations—would be covered under this change. Based on DOD data, our 

cost estimates of the five current legislative proposals are substantial, 

indicating that the cost of reserve retirement will increase by a range of 

almost $3 billion to over $20 billion, depending on the proposal, over the 

next 10 years. The Congressional Budget Office had not estimated the cost 

 29 The following question was asked in the 2000, May 2003, and September 2003 surveys: 

“Suppose that you have to decide whether to continue to participate in the National 

Guard/Reserve. Assuming you could stay, how likely is it that you would choose to do so?” 

Respondents were asked to select from one of the following five response categories: very 

likely, likely, neither likely nor unlikely, unlikely, very unlikely. 

30 The following question was asked in the September 2003 survey: “How much did each of 

the following contribute to your decision to join the National Guard/Reserve?” Of the 

several different items listed after this question, we analyzed responses to the following: 

"Opportunity to earn credit toward a military pension." Respondents were asked to select 

from one of the following five response categories: not at all, little influence, some 

influence, great influence, very great influence. 

Proposed Changes to 

Retirement System 

Are Costly and Need 

to Be Made in Context 

of the Total Force 
Page 26 GAO-04-1005 Military Personnel 

of the retirement benefit for all five legislative proposals at the time of 

our review. When associated health care costs are factored in, the total 

projected increase ranges from more than $3 billion to nearly $35 billion 

over the same period. Considering the fact that military basic pay 

will continue to grow and health care costs will continue to rise, the 

longer-term cost will continue to be significant. Second, lowering the 

age of receipt will align the reserve retirement system more closely with 

the active duty retirement system, but may not affect reservists who are 

experiencing increased deployments and associated hardships. Many of 

these reservists are not likely to be the beneficiaries of a reduction in the 

age of receipt of annuity, given that only one in four reservists currently 

stays in the reserves long enough to become eligible for retirement. Third, 

retirement is only one human capital management tool available to DOD’s 

workforce managers to compensate servicemembers for hardships 

experienced during their careers. DOD’s workforce managers can consider 

making targeted investments in specific human capital approaches. In 

addition to changes to the retirement system that would have a broad 

effect, DOD also has more targeted approaches available to it. For 

example, DOD has several special pays and allowances it can use to 

compensate servicemembers, such as hazardous duty pay and family 

separation allowances. In addition, Congress has approved, but DOD has 

yet to implement, a special allowance for servicemembers who experience 

excessive deployments. Fourth, DOD has recently identified a need to 

rebalance the reserve and active duty forces to reduce the stress on 

certain high-demand occupations. Better use of these human capital 

management tools can help DOD address the issues of equity and the 

increased use of reservists in military operations. Finally, DOD has not yet 

studied changes to the reserve retirement system in the context of the 

total force, even though these changes could have unintended 

consequences on DOD’s active duty forces. For example, if the reserve 

retirement system were changed to offer an immediate annuity after 

20 years of creditable service, some personnel who have made career 

decisions to remain on active duty until retirement might be inclined to 

leave active duty and apply to serve their remaining time in a reserve 

component. 

Members of the 108th Congress introduced five legislative proposals that 

would reduce the age at which retired reservists can receive their 

annuities from age 60 to something lower. The rationale often given for 

these proposals is that reserve benefits, such as retirement, should be 

enhanced in light of the frequency and duration of deployments that many 

reservists are experiencing. One of these proposals would allow reservists 

Legislative Proposals Are 

Designed to Lower the Age 

of Receipt 
Page 27 GAO-04-1005 Military Personnel 

who served 20 years to retire and receive their annuities, immediately, at 

any age. A second proposal would allow reservists who served 20 years to 

leave the service and receive their annuities beginning at age 55. A third 

proposal would reduce the age of receipt from 60 to as low as age 53—on 

a sliding scale—by 1 year for every 2 additional years served beyond 

20 years of service. For example, reservists who served 22 years would be 

eligible to receive their annuities at age 59, and reservists who served 

24 years would be eligible to receive their annuities at age 58. Under this 

proposal, reservists would have to serve 34 years to be eligible to receive 

annuities at age 53. A fourth proposal follows the same model but 

establishes 55 as the minimum age at which reservists could begin to 

receive annuities. Finally, a fifth proposal would retain eligibility of receipt 

at age 60 but allow reservists to apply for receipt of reduced annuities at 

younger ages. For example, the annuities of reservists who applied to 

receive their annuities at age 55 would be reduced by 12.5 percent. 

The estimated cost of lowering the age of receipt of retirement annuities 

will be substantial and has long-term budgetary implications. Based on 

data provided by DOD’s Office of the Actuary, we estimate that lowering 

the age would cost DOD an additional $2.88 billion to $20.45 billion in 

appropriated dollars, depending on the proposal, over the next 10 years.31

Reserve retirees would also be eligible, under four of the legislative 

proposals, for DOD-provided health care benefits for each year that the 

age of receipt is lowered. Using estimates of projected numbers of retirees 

and assumptions regarding the demographic characteristics of military 

personnel and their families provided by DOD’s Office of the Actuary, and 

average health costs for personnel and their dependents provided by 

DOD’s Office of Health Affairs, we calculated that DOD would incur 

additional health care costs ranging from $2.39 billion to $14.24 billion. 

Table 2 presents estimates of increased appropriations that would need to 

be paid into the Military Retirement Fund to finance the increased 

retirement benefits. The increased costs of even the most modest 

reduction in the age of receipt can be expected to be largenearly 

$3 billion between fiscal year 2005 and 2014. More generous proposals, 

such as allowing reservists who have fulfilled 20 satisfactory years of 

service to begin receiving retirement annuities immediately, could 

 31 The Congressional Budget Office had not estimated the cost of the retirement benefit for 

all legislative proposals at the time of our review.

Estimated Cost Increases 

Will Be Substantial and 

May Not Target Reservists 

Most Affected 
Page 28 GAO-04-1005 Military Personnel 

increase appropriations by over $20 billion during fiscal years 2005 and 

2014. Table 2 also presents estimated associated increases in health care 

appropriations. 

Table 2: Estimated 10-Year Increase in Appropriations of Five Legislative Proposals 

between Fiscal Year 2005 and 2014 

Dollars in billions 

Increased 

costs 

Immediate 

annuity Age 55

Age 53 

on a 

sliding scale 

Age 55 

on a 

sliding scale

Age 55 with 

reduced 

annuity

Retirement fund $20.45 $7.60 $2.88 $2.88 $3.59

Health care 14.24 6.03 2.49 2.39 NAb

Totala $34.69 $13.63 $5.37 $5.27 $3.59

Source: GAO analysis of DOD data. 

a

These dollar figures include the effects of inflation. When the effects of inflation are removed, the 

total dollar estimates would be approximately 8 percent lower. The net present value, or the funds 

that would need to be invested in fiscal year 2005 to fund the additional appropriations through fiscal 

year 2014, ranges from $4.28 billion to $28.1 billion. 

b

This proposal precludes members from receiving retiree health benefits until age 60. 

It should be noted that the numbers reported in table 2 underestimate the 

costs of any of these proposals because they do not include the past 

service liability created by the proposals. In addition, these estimates 

assume that retention among personnel not yet eligible for retirement 

would remain unchanged from recent experience. Officials in DOD’s 

Office of the Actuary suggested that improvements in retirement benefits 

could lead to increases in retention and, therefore, produce a greater 

number of retirees and higher costs than projected in this report. 

Importantly, these costs are even more substantial, given the fact that all 

reservists who qualify for retirement—and not just the minority of 

reservists who have been called to active duty for recent contingency 

operations—would be covered under any change to the reserve 

component retirement system. Since 1991 and Operations Desert 

Shield/Desert Storm, about one-fourth of all reservists who have served 

in the reserves were called to active duty. Data, as of March 2004, show 

that about 28 percent of the Ready Reserve have been called to active 

duty—either domestically or abroad, for both short and long durations—in 

support of current military operations since September 11, 2001. While all 

the services have been affected, certain components and specialties 

have been affected more than others. Furthermore, DOD’s actuary has 

calculated that about only one person in four who enters the reserves—
Page 29 GAO-04-1005 Military Personnel 

whether directly from civilian life or from active service—will retire from 

the reserves. While lowering the age of receipt would align the reserve 

retirement system more closely with the active duty retirement system, it 

might not, as a result, affect those reservists who are experiencing 

increased deployment and associated hardships. 

Retirement is only one human capital management tool available to shape 

the workforce, and it is not clear how influential it is on a servicemember’s 

decision to leave or stay. That decision is a complex, highly individual 

decision. Many factors, such as the availability of civilian jobs, family 

considerations, and satisfaction with military life, can influence a 

servicemember’s decision. We previously found that, when given a choice, 

servicemembers have tended to prefer immediate compensation to 

compensation that is deferred.32 The Congressional Budget Office found 

that new recruits would place a value of 4 cents on every dollar to be paid 

to them in 20 years.33 Consequently, compensation such as bonuses may be 

more effective at increasing overall retention than changes to the reserve 

retirement system. 

DOD has several special pays and allowances to further compensate 

servicemembers who are experiencing excessive deployments. For 

example, servicemembers who are away from their permanent duty 

station for more than 30 consecutive days receive a family separation 

allowance to help offset the additional expenses that may be incurred by 

their dependents. In addition, servicemembers deployed for less than 

30 days may be eligible to receive regular per diem, which ranges from 

$20 to $533 per day, depending upon the location. Furthermore, Congress 

has approved, but DOD has yet to implement, a high-deployment 

allowance designed to compensate certain servicemembers for lengthy as 

well as frequent shorter deployments. There are also a number of special 

pays and allowances intended to compensate servicemembers for 

hardships associated with deployments and incentive pays to induce 

members to acquire a particular skill or volunteer for certain career fields 

experiencing staffing shortages. 

 32 See GAO, Military Retirement: Proposed Changes Warrant Careful Analysis, 

GAO/T-NSIAD-99-94 (Washington, D.C.: Feb. 25, 1999). 

33 See Congressional Budget Office, Military Compensation: Balancing Cash and 

Noncash Benefits (Washington, D.C.: Jan. 16, 2004). 

Retirement Is Only One 

Tool Available to DOD’s 

Workforce Managers 
Page 30 GAO-04-1005 Military Personnel 

Another way to address possible retention problems in high-demand 

occupations is to alleviate the stress placed on reservists by transferring 

functions between active duty and reserve components. DOD recently 

published a report identifying the need to rebalance the forces—reserve 

and active duty—to ease stress on units and individuals serving in 

occupational specialties that are in high demand, such as military police, 

civil affairs and intelligence.34 DOD has undertaken studies to balance its 

military forces by (1) moving skills and functions that are found almost 

exclusively or predominately in the reserve components, such as civil 

affairs, into the active force and (2) reassigning personnel within the active 

and reserve components out of low-demand specialties, such as heavy 

artillery, into high-demand capabilities, such as military police and civil 

affairs. It should be noted, however, that these efforts are in the early 

planning stages and may take several more years to complete. 

DOD has not yet studied changes to the reserve retirement system from a 

total force perspective, even though it relies on the total force—both 

active duty and reserve component personnel and units—to conduct its 

military operations. Today, DOD cannot conduct operations without 

contributions from both active duty and reserve personnel, given that 

missions no longer reside solely within the active duty forces. DOD has 

transferred primary missions to the reserve components and, accordingly, 

reservists no longer simply augment active duty forces in times of conflict. 

DOD has identified a need to rebalance functions between the active duty 

and reserve forces to meet its mission. Similarly, DOD must also balance 

the needs of both segments of its uniformed personnel when it considers 

changes to manage its force. 

Changes to the reserve component retirement system will have a number 

of ramifications, some more difficult than others to foresee and potentially 

unintended. Most importantly, not all of these ramifications will appear in 

the retention experience of the reservists. While reducing the age of 

receipt in the reserve retirement system may more closely align this 

system with the active duty retirement system, this change could adversely 

affect active duty retention rates. For example, if the reserve retirement 

system were changed to offer an immediate annuity after 20 years of 

 34 See DOD, Office of the Deputy Assistant Secretary of Defense for Reserve Affairs for 

Readiness, Training, and Mobilization, Rebalancing Forces: Easing the Stress on Guard 

and Reserve (Washington, D.C.: Jan. 15, 2004). 

DOD Has Not Studied 

Changes to Reserve 

Retirement from a Total 

Force Perspective 
Page 31 GAO-04-1005 Military Personnel 

creditable service, personnel who have made career decisions to remain 

on active duty until retirement might be inclined to leave active duty and 

apply to serve their remaining time in a reserve component or transfer to 

the Inactive Ready Reserve and obtain retirement eligibility by 

participating in and completing voluntary training programs. Although 

DOD has not studied changes to the reserve retirement system from a total 

force perspective,35 it has contracted RAND to prepare a study, due in 

September 2004, on how changes to the reserve retirement system might 

affect reserve retention and force management. 

DOD is not in the best position to make a business case for endorsing or 

dissuading efforts to adopt any of the legislative proposals that are under 

consideration because it has not established expectations and associated 

metrics that would help determine if changes to the reserve retirement 

system are needed. In the absence of identified weaknesses in the reserve 

component profiles or overall retention rates, it is difficult to determine if 

problems exist that would be best served by changing the reserve 

retirement system. Furthermore, changes to the retirement system are 

expected to be costly, and retirement—a one-size-fits-all compensation 

tool—does not necessarily target those reservists who are experiencing 

frequent and lengthy deployments and associated hardships. This is 

especially significant, given the fact that less than one-third of all 

reservists have been called to active duty in recent years and that only one 

in four reservists currently remains in the reserves long enough to become 

retirement eligible. In other words, changes to the reserve retirement 

system, at a substantial cost, would be extended to many reservists who 

have not deployed and might only reach a minority of those reservists who 

have deployed. Finally, DOD has not studied the impact of proposed 

changes to the reserve component retirement system on the active duty 

forces. DOD has transferred primary missions to the reserve components 

and, accordingly, reservists no longer simply augment active duty forces in 

times of conflict. DOD has already identified a need to rebalance functions 

between the active duty and reserve forces to meet its mission. Similarly, 

DOD must also balance the needs of both segments of its uniformed 

personnel when it considers changes to manage its force. 

 35 According to the Office of the Under Secretary of Defense for Personnel Readiness, DOD 

initiated a contract to study retirement issues from a total force perspective. However, this 

contract was terminated and the study was not completed. 

Conclusions 
Page 32 GAO-04-1005 Military Personnel 

Proposals, such as those that have been introduced and that would 

permanently expand benefits, should be considered in the context of the 

serious fiscal challenges facing this country. The longer-term costs and 

implications of legislative proposals must be given adequate consideration 

before they are enacted into law. The deficit is now so large that the 

United States will not be able to grow its way out of it. Difficult choices 

are inevitable. Congress and DOD have already implemented a number of 

changes to improve the pay and benefits for reservists over the past 

few years. Furthermore, DOD is exploring other human capital 

management options. If changes are still warranted, opportunities may 

exist to apply other workforce management tools and target corrective 

actions to those reservists who are in military occupational specialties 

experiencing the highest attrition rates. 

We recommend that the Secretary of Defense direct the Under Secretary 

of Defense for Personnel and Readiness, in concert with the Assistant 

Secretary of Defense for Reserve Affairs, to take the following four 

actions: 

1. specify desired metrics for measuring the retention or attrition rates of 

senior officer and enlisted reserve component personnel who are 

approaching retirement eligibility and, therefore, are most likely to be 

affected by changes to DOD’s reserve component retirement system; 

2. determine if gaps exist between the desired and actual rates of 

attrition; 

3. identify changes, if any, to the current reserve component retirement 

system that would address these gaps, to the extent that they exist; 

and 

4. evaluate any changes to the reserve component retirement system and 

their associated long-term costs in the context of the total force. 

In commenting on a draft of this report, DOD concurred with each of our 

four recommendations. DOD also cited its ongoing contract with RAND to 

conduct a detailed study of the reserve retirement system. DOD stated that 

the contract calls for RAND to develop dynamic retention models that 

DOD will be able to apply to evaluate the effect of any changes to the 

reserve retirement system. DOD added that RAND is near completion of 

this study. While the work that RAND is doing may provide DOD with 

Recommendations for 

Executive Action 

Agency Comments 
Page 33 GAO-04-1005 Military Personnel 

tools it needs to evaluate the effects of changes to the reserve retirement 

system, we continue to emphasize that these evaluations should be 

conducted in the context of the total force--both reserve and active duty 

personnel. DOD’s comments are reprinted in their entirety in appendix V. 

We are sending copies of this report to interested congressional 

committees, the Secretary of Defense, and the Director of the Office of 

Management and Budget. We will make copies available to others upon 

request. In addition, the report will be available at no charge on the 

GAO Web site at http://www.gao.gov. 

If you or your staff have any questions regarding this report, please 

contact me at (202) 512-5559 or stewartd@gao.gov or Brenda S. Farrell at 

(202) 512-3604 or farrellb@gao.gov. Key contributors to this report were 

Joseph Applebaum, William J. Doherty, Mark B. Dowling, Ann M. Dubois, 

Kenya R. Jones, Karen L. Kemper, Kristy L. Kennedy, Stephen P. Marrin, 

William McNaught, David E. Moser, Charles W. Perdue, Jennifer R. 

Popovic, Jay Willer, and Gregory H. Wilmoth. 

Derek B. Stewart 

Director, Defense Capabilities and Management 
Appendix I: Scope and Methodology 

Page 34 GAO-04-1005 Military Personnel 

To assess the Department of Defense’s (DOD) reserve component 

retirement system as compared with certain aspects of the active duty 

retirement system, we reviewed the legislative history and purpose of 

DOD’s retirement systems—both active and reserve—and DOD reserve 

retirement policies and studies conducted by DOD and others that 

addressed reserve retirement issues. Specifically, we reviewed DOD’s 

Military Compensation Background Papers and the results of the Sixth 

Quadrennial Review of Military Compensation, conducted in 1988, that 

specifically addressed retirement issues. We also interviewed officials in 

the Office of the Assistant Secretary of Defense for Reserve Affairs and 

officials in each of DOD’s six reserve components—the Army Reserve, the 

Army National Guard, the Naval Reserve, the Air Force Reserve, the Air 

National Guard, and the Marine Corps Reserve. 

To assess the extent to which data available to DOD suggest that changes 

to the reserve component retirement system might be warranted, we 

analyzed recent trends in overall workforce profiles and retention. For 

example, we collected and analyzed data contained in DOD’s Reserve 

Components Common Personnel Data System and DOD’s Active Duty 

Military Personnel Master File and developed overall workforce profiles 

by years of service, age, and pay grade. We did this for both officer and 

enlisted personnel on active duty in each of the services and for officer 

and enlisted personnel reservists serving in each of DOD’s six reserve 

components. We also used year-end data for three points in time—1991, 

1997, and 2003—because these points in time represent key periods when 

reservists were called to active duty to support military operations. These 

included Operations Desert Shield/Desert Storm, military operations in the 

Balkans and Southwest Asia, and current operations in Iraq and 

Afghanistan. We then compared average years of service, age, and pay 

grade over the three points in time to identify the extent to which DOD 

may have experienced declines in any of the variables we analyzed. In 

addition, we analyzed data provided by the Office of the Assistant 

Secretary of Defense for Reserve Affairs and generated from the Reserve 

Components Common Personnel Data System to identify the retention and 

attrition patterns of reservists from fiscal year 1991 through fiscal 2003. 

These data also included information on certain high-demand military 

occupational specialties that experienced higher than normal attrition 

between fiscal year 1991 and 2003. DOD calculated the attrition rates by 

dividing total losses in a given year by the number of reservists present at 

the end of each year, and then compared retention rates over the years 

that we selected. We developed retention rates for reserve officers, reserve 

enlisted personnel, and for reservists as a whole, and then compared rates 

over time. We also analyzed attrition by the years of service in which the 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 35 GAO-04-1005 Military Personnel 

attrition occurred, for the three points in time, to determine if attrition was 

occurring at different stages in reservists’ careers. We interviewed officials 

in the Office of the Assistant Secretary of Defense for Reserve Affairs and 

in each of DOD’s reserve components to discuss issues surrounding 

workforce profiles and retention. 

We also reviewed DOD attitudinal surveys that were administered to 

reservists in calendar years 2000 and 2003 and analyzed responses to 

questions that addressed the intent of reservists to stay in or leave the 

reserves. Response rates for the 2000 Survey of Reserve Component 

Personnel, the May 2003 Status of Forces Survey of Reserve Component 

Members, and the September 2003 Status of Forces Survey of Reserve 

Component Members were 47.3 percent, 35.6 percent, and 31.9 percent, 

respectively. There is a potential for bias in the estimates to the extent that 

respondents and nonrespondents had different opinions on the questions 

asked. Each survey was a random probability sample, so each was only 

one of a number of large samples that could have been drawn. 

All percentage estimates cited from each of the surveys have sampling 

errors of plus or less than 5.6 percentage points. We used the weighting 

factors and the sampling error methodology provided by the Defense 

Manpower Data Center to develop estimates and sampling error estimates 

for each survey. 

We assessed the accuracy and reliability of the Active Duty Military 

Personnel Master File and the Reserve Components Common Personnel 

Data Systems, from which all workforce profile, retention, and attrition 

data were generated. Through written responses provided from the 

Defense Manpower Data Center, which maintains these databases, we 

reviewed (1) existing information about the data and the systems that 

produce them, (2) the completeness of the electronic data, (3) DOD’s 

methods of data collection verification and quality control practices, 

(4) previous quality reviews of the data and the frequency of these 

reviews, (5) any limitations to the data, and (6) practices and controls over 

data entry accuracy. We also interviewed agency officials knowledgeable 

about these data systems. We determined that the data were sufficiently 

reliable for purposes of this report. We also assessed the reliability of 

survey responses for reporting purposes. The surveys we analyzed were 

based on stratified, random samples of reserve component members, and 

the results were weighted to achieve statistical validity. Again, the results 

of the surveys were sufficiently reliable for purposes of this report. 

To evaluate the potential effects and costs of legislative proposals that 

address reserve retirement reform, we reviewed legislative proposals 
Appendix I: Scope and Methodology 

Page 36 GAO-04-1005 Military Personnel 

submitted in the 108th Congress and met with and obtained data on cost 

projections—and the assumptions behind those projections—from the 

Office of the DOD Actuary, the Office of the Assistant Secretary of 

Defense for Health Affairs, and the Office of the Assistant Secretary of 

Defense for Reserve Affairs. The Congressional Budget Office had not 

estimated the cost of the retirement benefit for all five legislative 

proposals at the time of our review. In addition, we reviewed reports 

developed by RAND and others that analyze the potential effects of 

provisions in the legislative proposals on the retention of reservists. We 

also acquired reports that allowed us to assess alternative compensation 

and workforce management methods for maintaining or increasing 

retention. Finally, we interviewed officials in the Offices of the Assistant 

Secretary of Defense for Reserve Affairs and Under Secretary of Defense 

for Personnel and Readiness to analyze the extent to which DOD has 

studied reserve retirement reform from a total force perspective. 

We developed our own estimates of the increased costs that would be 

incurred under each retirement proposal using projections made by DOD’s 

Office of the Actuary and data received from DOD’s Office of Health 

Affairs. We obtained estimates from the DOD actuary on the number of 

personnel that would be affected by each retirement proposal and then 

multiplied this population estimate by the estimated costs of providing 

retirement and health care benefits. 

To estimate the retirement benefit costs, we asked DOD’s Office of the 

Actuary to estimate the number of new persons who would be eligible to 

retire under each retirement proposal. The DOD actuary also estimated 

the normal cost of each proposal.1

 To develop estimates of the normal cost 

of each alternative, the DOD actuary projected future personnel levels 

based upon the number of persons participating in the selected reserve 

 1

 The normal cost of the military reserve retirement system is defined as the percentage of 

reservists’ basic salary that must be invested so that sufficient resources will be available 

to finance all anticipated retirement benefits, including costs of providing benefits to 

survivors. The increased normal cost reflects the increase in the expected value of the 

reserve retirement system expressed as a level percentage of reservists’ pay over their 

military careers. In other words, if this percentage of reservists’ pay were put aside and 

returned the rate of return assumed by DOD’s Office of the Actuary, it would be sufficient 

to pay for the increased benefits. However, these normal costs will be paid only for years 

2005 and later. To have financed the increased benefits contained in the proposals 

completely, it would have been necessary to collect the increased normal costs over the 

previous years in which the current group of reservists served. This was not done and, 

therefore, an additional unfunded liability would have to be added to the Military 

Retirement Fund. 
Appendix I: Scope and Methodology 

Page 37 GAO-04-1005 Military Personnel 

forces on September 30, 2003. The DOD actuary generally assumed that 

future retention rates in the reserve forces would be the same rates that 

were observed from 1997 to 2000 and also assumed that personnel, newly 

eligible under the different proposals, would retire at the same rates as 

personnel who are currently eligible. The DOD actuary assumed that 

retirement benefit increases would vary from 1.3 to 3.0 percent between 

fiscal year 2005 and 2014, that future pay raises for the uniformed services 

would range from 3.4 to 3.75 percent, that the real rate of return on 

retirement investments would be 3.25 percent, and that the rate of 

discount would be 6.25 percent. For each proposal, we applied the DOD 

actuary’s estimate of the increase in the normal cost percentage to the 

projected level of basic pay that would be paid to reservists from fiscal 

year 2005 through fiscal year 2014 to estimate the amount of additional 

funds that would need to be appropriated to the Military Retirement Fund. 

To estimate the increased costs of providing health care benefits to newly 

eligible retirees under each proposal, we again used the DOD actuary’s 

estimate of the number of new retirees under each proposal. We also used 

assumptions, provided by DOD’s Office of Health Affairs, that one-half of 

these retirees would be single and that one-half would have dependents. 

DOD’s Office of Health Affairs assumed that the average number of 

dependents in this latter group of retirees would be 2.94. The Office of 

Health Affairs also assumed that the costs to provide health care would be 

$2,242 for each retiree and $1,910 for each dependent in fiscal year 2005. 

Based on these data, we calculated that the costs of providing health care 

through DOD’s health care system would increase 10 percent annually 

from fiscal year 2006 through fiscal year 2014. 

We conducted our review from November 2003 through July 2004 in 

accordance with generally accepted government auditing standards. 
Appendix II: Key Provisions of the Reserve 

Retirement Points System 

Page 38 GAO-04-1005 Military Personnel 

The reserve retirement system, which has remained largely unchanged 

since its enactment in 1948, is built upon a points system that provides 

DOD with a means to convert the total number of years served by 

reservists on a part-time basis into the equivalent number of full-time years 

served. Essentially, DOD divides the total number of points that a reservist 

earned in each qualifying year by 360—roughly, the number of days in a 

year. This prorated adjustment provides DOD with the ability to calculate 

retirement annuities for both active duty and reserve retirees on a 

comparable basis. 

Reservists must accumulate 20 years of creditable service to become 

retirement eligible and, as of October 1, 2002, reservists must also serve 

the last 6 years in a reserve component.1

 A creditable year of service is a 

year in which a reservist earns a minimum of 50 points. Retirement points 

can be classified as inactive duty points and active duty points. 

Reservists typically earn inactive duty points in a number of different 

ways: 

• Weekend drills. Reservists attend weekend drills each month. Each day 

is divided into two drill periods, of 4 hours in duration, and reservists 

earn 1 point for each drill. This equates to 4 points for each weekend, 

or 48 points annually. 

• Annual training. Reservists participate in 2 weeks of training annually 

and typically earn 12 points for this training time. 

• Affiliation with a reserve unit. Reservists earn 15 points annually for 

being a member of a reserve unit. 

• Additional points. Reservists can earn additional points for such things 

as completion of accredited correspondence courses or participation in 

 1

 The number of final years that reservists must serve in a reserve component is established 

in law, and the number has fluctuated between 6 and 8 years. Reservists who completed 

20 years of creditable service prior to October 5, 1994, were required to fulfill their last 

8 years of service in a reserve component. Reservists who completed 20 years of creditable 

service between October 5, 1994, and December 31, 2001, were required to fulfill their last 

6 years of service in a reserve component. Reservists who completed 20 years of creditable 

service between January 1, 2002, and September 30, 2002, were required to fulfill their last 

8 years of service in a reserve component. From October 1, 2002, until the present time, 

reservists are required to serve their last 6 years in a reserve unit. 

Appendix II: Key Provisions of the Reserve 

Retirement Points System 
Appendix II: Key Provisions of the Reserve 

Retirement Points System 

Page 39 GAO-04-1005 Military Personnel 

funeral honors duty. Reservists, however, cannot apply more than 90 

inactive duty points toward retirement in any given year.2

In addition, reservists receive 1 point for any day served on active duty 

prior to separating from active duty and affiliating with a reserve 

component. When called to active duty, reservists also earn active 

duty points—1 point for each day served. Reservists can earn a maximum 

of 365 active duty points in any calendar year and a career maximum of 

10,950 points or 30 years of creditable service. Reservists who are called to 

active duty will accumulate more points and, therefore, will receive larger 

retirement annuities, should they stay until retirement, than their reserve 

counterparts who are not called to active duty. 

 2

 Prior to October 30, 2000, reservists could only apply 75 inactive duty points toward 

retirement per year. 
Appendix III: Reserve Workforce Profile Data 

Page 40 GAO-04-1005 Military Personnel 

We analyzed data contained in DOD’s Reserve Components Common 

Personnel Data System and developed overall workforce profiles—

by years of service, age, and pay grade—for each reserve component, and 

for officer and enlisted personnel, to identify trends that might suggest 

that changes to DOD’s reserve retirement system are warranted from a 

workforce management perspective. We selected three points in time—

calendar years 1991, 1997, and 2003—because they represent key periods 

when reservists were called to active duty. These included Operations 

Desert Shield/Desert Storm, military operations in the Balkans and in 

Southwest Asia, and current operations in Iraq and Afghanistan. We did 

not find significant variations in overall years of service, age, or pay grade 

that would suggest that changes to DOD’s reserve retirement system are 

currently needed from a workforce management perspective. 

The average years of service of reserve enlisted personnel was 1 to 3 years 

higher, for all components, in calendar year 1997 than it was in calendar 

year 1991. With the exception of the Marine Corps Reserve, the 

average years of service was the same at the end of calendar year 2003 as 

it was at the end of calendar year 1997. In the Marine Corps Reserve, the 

average years of service was 1 year lower at the end of calendar year 2003 

than it was at the end of calendar year 1997, but the same as it was at the 

end of calendar year 1991. Figure 4 shows the average years of service by 

reserve enlisted personnel for all components for calendar years 1991, 

1993, and 2003. 

Appendix III: Reserve Workforce Profile Data

Reserve Enlisted 

Personnel Average Years of 

Service 
Appendix III: Reserve Workforce Profile Data 

Page 41 GAO-04-1005 Military Personnel 

Figure 4: Reserve Enlisted Personnel Average Years of Service for Calendar Years 

1991, 1997, and 2003 

Similarly, reserve enlisted personnel were, on average, 1 to 3 years older, 

across all components, in calendar year 1997 than they were in calendar 

year 1991. Reserve enlisted personnel in four of the components were, on 

average, the same age or 1 year older in calendar year 2003 as they were in 

calendar year 1997. In the Army National Guard, enlisted reservists were, 

on average, 1 year younger in calendar year 2003 than they were in 

calendar year 1997, but 1 year older than they were in calendar year 1991. 

In the Marine Corps Reserve, enlisted reservists were, on average, 1 year 

younger in calendar year 2003 than they were in calendar year 1997, and 

the same age as they were in calendar year 1991. Figure 5 shows the 

Reserve Enlisted 

Personnel Average Age 

0

2

4

6

8

10

12

14

16

1991 1997 2003

Average years of service

Air National Guard

Army National Guard

Army Reserve

Naval Reserve

Air Force Reserve

Marine Corps Reserve

Source: GAO analysis of DOD data.

13

10

9 9

12

5

14

11 11 11

15

6

14

11 11 11

15

5

Years
Appendix III: Reserve Workforce Profile Data 

Page 42 GAO-04-1005 Military Personnel 

average age of reserve enlisted personnel for all components for calendar 

years 1991, 1997, and 2003. 

Figure 5: Reserve Enlisted Average Age for Calendar Years 1991, 1997, and 2003 

Figure 6 shows the average pay grade for reserve enlisted personnel for all 

components for calendar years 1991, 1997, and 2003. Average pay grades 

remained constant in four of the six components. The average enlisted pay 

grade was one pay grade higher in the Air National Guard in calendar year 

2003 than it was in calendar years 1991 and 1997. The average pay grade in 

the Air Force Reserve was one pay grade higher in calendar years 1997 and 

2003 than it was in calendar year 1991. 

Reserve Enlisted 

Personnel Average Pay 

Grade 

Air National Guard

Army National Guard

Army Reserve

Naval Reserve

Air Force Reserve

Marine Corps Reserve

Source: GAO analysis of DOD data.

Years

0

5

10

15

20

25

30

35

40

1991 1997 2003

Average age

35

31 31 31

35

25

36

33 32

34

37

26

36

32 32

35

37

25
Appendix III: Reserve Workforce Profile Data 

Page 43 GAO-04-1005 Military Personnel 

Figure 6: Reserve Enlisted Personnel Average Pay Grade for Calendar Years 1991, 

1997, and 2003 

Average enlisted pay grade

0

1

2

3

4

5

6

7

5 555 5 555 5 55

6 6 6

5

444

1991 1997 2003

Air National Guard

Army National Guard

Army Reserve

Naval Reserve

Air Force Reserve

Marine Corps Reserve

Source: GAO analysis of DOD data.

Years
Appendix III: Reserve Workforce Profile Data 

Page 44 GAO-04-1005 Military Personnel 

The average years of service by reserve officers in the Air Force Reserve 

remained constant in calendar years 1991, 1997, and 2003. In the remaining 

five components, the average years of service was 1 to 3 years greater in 

2003 than it was in calendar year 1991. None of the components 

experienced a decline in the average number of years served for the 

three points of time that we analyzed. Figure 7 shows the average years of 

service by reserve officer personnel for all components for calendar years 

1991, 1997, and 2003. 

Figure 7: Reserve Officer Average Years of Service for Calendar Years 1991, 1997, 

and 2003 

Reserve Officer Average 

Years of Service 

Average years of service

0

2

4

6

8

10

12

14

16

18

20

1997 2003

16

13

15

14

17

15

17

15

16 16

17 17 17

16

17

16

17

18

0

1991

Air National Guard

Army National Guard

Army Reserve

Naval Reserve

Air Force Reserve

Marine Corps Reserve

Source: GAO analysis of DOD data.

Years
Appendix III: Reserve Workforce Profile Data 

Page 45 GAO-04-1005 Military Personnel 

Reserve officers were, on average, 1 to 2 years older in calendar year 1997 

than they were in calendar year 1991, with the exception of the Air Force 

Reserve where officers were, on average, the same age in both calendar 

years. Similarly, reserve officers were, on average, 1 to 2 years older in 

calendar year 2003 than they were in calendar year 1997, with the 

exception of reserve officers in the Air National Guard, who were, on 

average, the same age in both of those calendar years. Figure 8 shows the 

average age of reserve officer personnel for all components for calendar 

years 1991, 1997, and 2003. 

Figure 8: Reserve Officer Average Age for Calendar Years 1991, 1997, and 2003 

Reserve Officer Average 

Age 

1991 1997 2003

30

32

34

36

38

40

42

Average age

44

39

35

39

38

41

37

40

37

40 40

41

38

40

38

41 41

42

40

Air National Guard

Army National Guard

Army Reserve

Naval Reserve

Air Force Reserve

Marine Corps Reserve

Source: GAO analysis of DOD data.

Years
Appendix III: Reserve Workforce Profile Data 

Page 46 GAO-04-1005 Military Personnel 

Figure 9 shows the average pay grade of reserve officers for all 

components for calendar years 1991, 1997, and 2003. Average pay grades 

remained constant within each component. 

Figure 9: Reserve Officer Average Pay Grade for Calendar Years 1991, 1997, 

and 2003 

Reserve Officer Average 

Pay Grade 

Average officer pay grade

0

1

2

3

4

5

1991 1997 2003

4

3

4 44 4 4

3

4 44 4 4

3

4 44 4

Air National Guard

Army National Guard

Army Reserve

Naval Reserve

Air Force Reserve

Marine Corps Reserve

Source: GAO analysis of DOD data.

Years
Appendix IV: Attrition Rates for Reservists 

Page 47 GAO-04-1005 Military Personnel 

We analyzed data contained in DOD’s Reserve Components Common 

Personnel Data System, for reserve officers, enlisted personnel, and all 

reservists, to determine the career points at which attrition occurs and the 

extent to which the current reserve retirement system influences the 

decisions of reservists to stay in or leave reserve duty. Again, we selected 

three points in time—1991, 1997, and 2003—because they represent key 

periods when reservists were called to active duty to support military 

operations. These included Operations Desert Shield/Desert Storm, 

military operations in the Balkans and Southwest Asia, and current 

operations in Iraq and Afghanistan. In each of the years we selected, we 

found little attrition among those reservists with more than 14 years of 

service but less than 20 years of service—those servicemembers most 

likely to be affected by changes to the reserve retirement system. 

Figures 10, 11, and 12 show reserve attrition by years of service for 

fiscal years 1991, 1997, and 2003, respectively. 

Appendix IV: Attrition Rates for Reservists 
Appendix IV: Attrition Rates for Reservists 

Page 48 GAO-04-1005 Military Personnel 

Figure 10: Reserve Attrition by Years of Service for Fiscal Year 1991 

a

Includes reservists leaving with 20 to 30 years of service. 

Number of reservists

3,500

Years of service

Officer

Enlisted

Total DOD reserve component

Source: GAO analysis of DOD data.

a

0

500

1,000

1,500

2,000

2,500

3,000

4,000

4,500

5,000

5,500

6,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Appendix IV: Attrition Rates for Reservists 

Page 49 GAO-04-1005 Military Personnel 

Figure 11: Reserve Attrition by Years of Service for Fiscal Year 1997 

a

Includes reservists leaving with 20 to 30 years of service. 

Number of reservists

Years of service

Officer

Enlisted

Total DOD reserve component

0

Source: GAO analysis of DOD data.

a 0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Appendix IV: Attrition Rates for Reservists 

Page 50 GAO-04-1005 Military Personnel 

Figure 12: Reserve Attrition by Years of Service for Fiscal Year 2003 

a

Includes reservists leaving with 20 to 30 years of service. 

Number of reservists

0

Years of service

Officer

Enlisted

Total DOD reserve component

Source: GAO analysis of DOD data.

a

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Appendix V: Comments from the Department of Defense 

Page 51 GAO-04-1005 Military Personnel 

Appendix V: Comments from the Department 

of Defense 
Appendix V: Comments from the Department of Defense 

Page 52 GAO-04-1005 Military Personnel 

Note: Page numbers in 

the draft report may differ 

from those in this report. 
Appendix V: Comments from the Department of Defense 

Page 53 GAO-04-1005 Military Personnel 
Appendix VI: Related GAO Products 

Page 54 GAO-04-1005 Military Personnel 

Military Pay: Army Reserve Soldiers Mobilized to Active Duty 

Experienced Significant Pay Problems. GAO-04-911. Washington, D.C.: 

August 20, 2004.

Military Personnel: DOD Has Not Implemented the High Deployment 

Allowance That Could Compensate Servicemembers Deployed Frequently 

for Short Periods. GAO-04-805. Washington, D.C.: June 25, 2004. 

Military Personnel: Active Duty Compensation and Its Tax Treatment. 

GAO-04-721R. Washington, D.C.: May 7, 2004. 

Military Personnel: Observations Related to Reserve Compensation, 

Selective Reenlistment Bonuses, and Mail Delivery to Deployed Troops. 

GAO-04-582T. Washington, D.C.: March 24, 2004. 

Budget Process: Long-Term Focus is Critical. GAO-04-585T. 

Washington, D.C.: March 23, 2004. 

Military Pay: Army National Guard Personnel Mobilized to Active Duty 

Experienced Significant Pay Problems. GAO-04-89. Washington, D.C.: 

November 13, 2003. 

Military Personnel: DOD Needs More Data to Address Financial and 

Health Care Issues Affecting Reservists. GAO-03-1004. Washington, D.C.: 

September 10, 2003. 

Military Personnel: DOD Actions Needed to Improve the Efficiency of 

Mobilizations for Reserve Forces. GAO-03-921. Washington, D.C.: 

August 21, 2003. 

Military Personnel: DOD Needs to Assess Certain Factors in 

Determining Whether Hazardous Duty Pay is Warranted for Duty in the 

Polar Regions. GAO-03-554. Washington, D.C.: April 29, 2003. 

Military Personnel: Preliminary Observations Related to Income, 

Benefits, and Employer Support for Reservists During Mobilizations. 

GAO-03-573T. Washington, D.C.: March 19, 2003. 

Military Personnel: Oversight Process Needed to Help Maintain 

Momentum of DOD’s Strategic Human Capital Planning. GAO-03-237. 

Washington, D.C.: December 5, 2002. 

Appendix VI: Related GAO Products 
Appendix VI: Related GAO Products 

Page 55 GAO-04-1005 Military Personnel 

Military Personnel: Active Duty Benefits Reflect Changing 

Demographics, but Opportunities Exist to Improve. GAO-03-935. 

Washington, D.C.: September 18, 2002. 

Exposure Draft: A Model of Strategic Human Capital Management, 

GAO-02-373SP. Washington, D.C.: March 15, 2002. 

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