United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Force Requirements and Personnel,

Committee on Armed Services, U.S.

Senate

September 1993 MILITARY

DOWNSIZING

Balancing Accessions

and Losses is Key to

Shaping the Future

Force

GAO/NSIAD-93-241

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-254058 

September 30, 1993

The Honorable Richard Shelby

Chairman, Subcommittee on Force

 Requirements and Personnel

Committee on Armed Services

United States Senate

Dear Mr. Chairman:

This report highlights the progress that the Department of Defense has made in downsizing its

active duty force using various force management tools and legislative authorities. It identifies

several policy issues and questions that are key to future force reduction decision-making. It

also identifies matters for consideration by the Congress to facilitate future reduction actions.

We plan no further distribution of this report until 15 days after its issue date. At that time we

will send copies to the Chairmen of the House and Senate Committees on Appropriations; the

Chairmen of the House and Senate Committees on Armed Services; the Director, Office of

Management and Budget; and the Secretaries of Defense, the Air Force, the Army, and the Navy.

Copies will also be made available to other interested parties upon request.

Please contact me at (202) 512-5140 if you or your staff have any questions concerning this

report. Major contributors to this report are listed in appendix V.

Sincerely yours,

Mark E. Gebicke

Director, Military Operations and

 Capabilities Issues
Executive Summary

Purpose The Congress, in exercising initial oversight regarding the planned

downsizing of U.S. military forces, prescribed reduction targets, and

provided other guidance and legislative authorities to the Department of

Defense (DOD) to facilitate downsizing, minimize involuntary separations,

and preserve a balanced force.

The Chairman of the former Subcommittee on Manpower and Personnel,

Senate Committee on Armed Services, asked GAO to examine DOD’s

adherence to congressional guidance and authorizations in military

downsizing. GAO determined (1) what progress DOD has made toward

meeting reduction targets, (2) how downsizing actions are affecting new

recruiting or accessions, (3) what range of voluntary and involuntary

reduction actions are being taken to meet downsizing objectives, (4) how

downsizing is being accomplished across various groupings of officer and

enlisted personnel by years of service and how this is affecting force

profiles, and (5) what issues might be important to future reduction

decisions.

Background At the end of fiscal year 1987, the active duty U.S. military was at its

post-Vietnam peak of 2,174,217 positions. The National Defense

Authorization Act for Fiscal Year 1991 called for a fiscal year 1995 end

strength of 1,613,000 positions, about a 25-percent reduction, or 

561,000 positions less than the fiscal year 1987 end-strength level. A

greater reduction target was subsequently put in place by the previous

administration, which, as of January 1993, was projecting an end strength

of 1,607,000 by the end of fiscal year 1995 and further reductions in

succeeding years. The current administration is reassessing its out-year

reduction plans beyond its fiscal year 1994 end-strength goal of 1,621,000.

The military personnel system is highly structured, with specific legal and

regulatory requirements governing career advancement and service

continuation. Thus, under this system, the services, even before the

current downsizing period began, would expect to lose and replace large

numbers of personnel each year.

The large multiyear Defense downsizing effort meant a period of greater

personnel turbulence than would otherwise exist and the potential for

significant numbers of persons to be separated involuntarily. Thus, the

Congress, concerned about the impact of force reductions, required that

the services, before carrying out involuntary reductions of career members

who were not eligible for retirement, implement procedures to limit

accessions and to reduce the populations of personnel having less than 

Page 2 GAO/NSIAD-93-241 Military Downsizing
Executive Summary

6 years of service as well as the population of retirement eligible

personnel. Also, the Congress authorized certain measures, including the

use of financial separation incentives and other transition assistance to

facilitate downsizing and minimize the impact on individuals.

Results in Brief DOD has accomplished a majority of its previously planned active duty

force reductions; however, further reductions are likely as the result of a

recently completed DOD review. In examining how DOD is accomplishing

this downsizing, GAO found:

• DOD and the services have reduced accession levels over previous years,

but they are still recruiting large numbers of personnel each year as part of

their efforts to sustain a balanced force.

• DOD has given priority to achieving voluntary reductions. It has used

various force shaping authorities or “tools” as well as financial separation

incentives to help draw down the military forces across various skill and

seniority groups. With many of those persons most inclined to leave

voluntarily having done so, and the base of persons eligible for separation

incentives decreasing, DOD officials believe that significant additional

increases in end-strength reductions would likely result in more

involuntary reductions.

• DOD’s approach to force reductions, along with its continued emphasis on

accessions, has helped to control, although not entirely contain, some

proportional personnel growth in years of service and rank. A negative

consequence of such growth is increased relative cost; however, a positive

aspect is increased experience levels—two important trade-offs in force

shaping.

• Some policy issues and questions identified during the recent downsizing

could become more important in future force reduction decisions. The

issues include how quickly the force can be reduced, what accession

levels should be, and what cost trade-offs are most desirable between a

younger or a more experienced force.

Principal Findings

Reduction Goals Are Being

Met, but Further

Reductions Are Expected

By the end of fiscal year 1993, DOD expects to have reduced its active duty

force levels by over 446,000 positions, which is a reduction of nearly

21 percent over fiscal year 1987’s end-strength levels. Under current

Page 3 GAO/NSIAD-93-241 Military Downsizing
Executive Summary

drawdown plans, DOD’s planned end strength for fiscal year 1994

(1,621,000) will be just 8,000 positions higher than the number the

Congress had mandated for the end of fiscal year 1995. However, further

reductions are expected as the result of a recently completed “Bottom-up

Review” of DOD needs and programs for fiscal years 1995-99.

Despite Reduced

End-Strength Levels,

Accession Rates

Remain High to Help

Shape the Force

DOD’s planned accessions in fiscal years 1993 and 1994 are about 225,000

and 207,000, respectively. While these might appear to be significant

numbers in a period of downsizing, planned accessions in fiscal year 1993

are down 34 percent compared with fiscal year 1987’s level of nearly

342,000 personnel. DOD has retained a relatively high rate of accessions to

better assure a balanced force across the various pay grades and skill

areas to preserve future career opportunities.

DOD’s Downsizing

Involves a Spectrum

of Voluntary to

Involuntary Reduction

Actions

Although DOD has emphasized voluntary reductions, it has used various

voluntary and involuntary reduction tools to draw down its military forces

across various pay grades and skill areas. Among the voluntary actions are

early release of personnel prior to their normal end of enlistment or use of

financial separation incentives to induce persons to leave. Additionally, in

fiscal year 1993, DOD used new legislative authority for early retirement of

personnel after 15 years of service. Less voluntary means are used when

voluntary tools do not achieve the necessary reductions. Less voluntary

means of separation involve tightened retention standards or the use of

special boards to mandate retirement of selected personnel from the ranks

of those already eligible to do so. These actions have lessened but not

eliminated the need for the services to use reduction-in-force (RIF) to

involuntarily separate career force personnel who are not yet eligible for

any form of retirement.

As the number of end-strength reductions increases in the coming years,

DOD and service officials believe the number of involuntary separation

actions could increase because the population of persons eligible for

financial separation incentives is decreasing, and those most willing to

leave under such incentives will have done so already. Legislation enacted

as part of the fiscal year 1992 and 1993 Defense Authorization Act

authorized the use of incentives for fiscal years 1992-95 for those who had

completed 6 years of service at the time the law was enacted. Service

representatives believe that the number of involuntary reductions could be

minimized somewhat by expanding the eligibility to include service

members who have attained 6 years of service since the incentive

legislation was enacted.

Page 4 GAO/NSIAD-93-241 Military Downsizing
Executive Summary

DOD Has

Implemented

Measures to Induce

Attrition, but Some

Long-Term Changes in

Force Profiles Are

Noted

DOD’s efforts to manage the drawdown have helped to control, although

not entirely contain, some long-term growth in the proportion of personnel

with higher years of service and rank. There are positive and negative

aspects of such growth in seniority. On the positive side, each of the

services, in varying degrees, has largely maintained a steady, downward

trend for over 10 years in the percentage of personnel having less than 

4 years of service. For example, the percentage of all service personnel

having 4 years or less of service was 53 percent in fiscal year 1980, and

dropped to 39 percent in fiscal year 1992. This trend, according to various

service officials, creates a more experienced and better trained work

force; one that some DOD officials cite as being increasingly important in a

smaller military. On the negative side, a more senior force is relatively

more costly. The trend toward a more senior force has been reflected in

growth, by several percentage points since fiscal year 1980, in those

military personnel having completed 15 or more years of service and in the

numbers of personnel eligible for retirement. The increases would have

been greater except for DOD’s actions to (1) encourage voluntary

separations; (2) in some instances, mandate retirement of selected officers

and enlisted personnel; and (3) tighten quality standards governing service

continuations among the enlisted population. DOD’s planned use of early

retirement authority for personnel having completed between 15 and 20

years of service could further contain growth in that population group.

Issues Affecting

Future Reduction

Decisions

Some policy issues and questions identified during recent downsizing

activities may become more prominent as further reductions occur. They

include future force profiles, how quickly the reductions should occur,

what accession levels should be, and what cost trade-offs are most

desirable between a younger or a more experienced force. However, the

recent drawdown experience does more to offer perspectives on key

issues than to suggest simple, fixed answers.

Optimum force profiles in terms of experience levels, average pay grades,

and officer/enlisted ratios are not clearly established and would likely be

difficult to develop with any degree of uniformity among the services.

Nevertheless, because of their impact on readiness and costs, GAO believes

that general trends in force profiles should be considered by the

administration and the Congress in deciding future force levels.

In considering how quickly reductions should occur, it will be important to

take into consideration the fact that DOD’s military personnel system

experiences significant turbulence with high levels of personnel turnovers

Page 5 GAO/NSIAD-93-241 Military Downsizing
Executive Summary

during more normal times, when downsizing is not occurring, and this

turbulence can be compounded by the degree and pace of reductions.

Another consideration is the impact of personnel reductions on unit

manning levels. Army officials acknowledge that, during the current

drawdown, personnel reductions have occurred more quickly than have

changes in unit force structure, creating some undesired undermanning of

units. While they expect this problem to correct itself as future reductions

in unit structure occur, they recognize the problem could be exacerbated

with increases in personnel reduction targets unless these further

reductions are correlated with additional structural reductions.

In considering accession levels, it will be important to consider both the

short- and long-term potential impact of reduced accessions on the forces.

In the short term, significant reductions in accession levels can be

attained, but, in doing so, they result in a relatively more costly, but more

experienced force. From a long-term perspective, significantly curtailing

accessions poses a greater potential for force imbalances in the future.

One additional factor affecting accession levels is the quality of new

recruits.

Matters for

Congressional

Consideration

Given that DOD’s downsizing is apt to continue for several more years, the

Congress, to the extent it desires a continuing emphasis on minimizing

involuntary separations, may want to consider extending the use of special

separation incentive programs beyond the current deadline of fiscal year

1995. Also, the authority for use of the separation incentives limits their

use to those who had attained 6 years of service at the time the legislation

was enacted in December 1991. Therefore, the Congress may also want to

amend the legislation to include all who have attained 6 years of service

within the time frame for which the incentives are authorized as a means

of broadening the pool of persons eligible for the incentives and

minimizing the potential for greater involuntary separations in the future.

Agency Comments DOD fully concurred with the report’s findings and matters for

congressional consideration. (See app. IV.)

Page 6 GAO/NSIAD-93-241 Military Downsizing
Page 7 GAO/NSIAD-93-241 Military Downsizing
Contents

Executive Summary 2

Chapter 1 

Introduction

12

Reduction Targets and Objectives 12

Military Force Management 13

Force Management and Shaping, a Continual Process 15

Additional Authorities Provided by the Congress to Facilitate

Downsizing and Force Shaping

17

Objectives, Scope, and Methodology 18

Chapter 2 

Reduction Targets Are

Being Met, but

Significant Recruiting

Is Still Required

20

Status of Reduction Efforts 20

Accession Levels Remain Relatively High, Despite Downsizing, to

Help Shape the Force

21

Personnel Turbulence Is Much Greater Than Net Reductions 22

Establishing Accession Levels During Downsizing Is Difficult 23

Chapter 3 

Various Tools Used to

Downsize the Force

Across Career

Groups, but Some

Less Than Voluntary

Reductions Are

Required

25

Voluntary Separations 25

Less Than Voluntary Means Also Used 29

Chapter 4 

Long-Term Changes in

Selected Force

Profiles Have

Continued Moderately

During Downsizing

33

A More Experienced Force 33

Officer to Enlisted Ratios Continue to Rise 37

Average Pay Grades Increase 37

Page 8 GAO/NSIAD-93-241 Military Downsizing
Contents

Chapter 5 

Issues Affecting

Future Reduction

Decisions

40

Desired Force Profiles 40

Pace and Balance in Force Reductions 40

Determining Accession Levels 41

Conclusions 41

Matters for Congressional Consideration 42

Agency Comments 42

Appendixes Appendix I: Military End-Strength Levels, Fiscal Years 1980

Through 1994

44

Appendix II: Active Duty Military Personnel Separations During

Fiscal Year 1992

45

Appendix III: Illustrated Severance Pay Options Related to

Downsizing for Selected Pay Grades

46

Appendix IV: Comments From the Department of Defense 47

Appendix V: Major Contributors to This Report 48

Tables Table 2.1: End-Strength Levels for Selected Fiscal Years 20

Table 2.2: Service Accession Levels by Fiscal Year 21

Table 3.1: Personnel Separating Under SSB And VSI 26

Table 3.2: Separations Through Early Release Programs in Fiscal

Years 1992 and 1993

28

Table 3.3: Planned Military Separations Using Early Retirement

Authority in Fiscal Years 1993 and 1994

29

Table 3.4: SERB Reductions for Fiscal Year 1992 30

Table 3.5: SERB Reductions Planned for Fiscal Year 1993 30

Table 3.6: SERB Reductions Planned for Fiscal Year 1994 31

Table 4.1: Changing Force Profiles by Selected Fiscal Years 33

Table 4.2: Percent of Active Duty Enlisted Personnel Having Less

Than 4 Years of Service, for Selected Fiscal Years

34

Table 4.3: Percent of Active Duty Enlisted Personnel Having

Between 15 and 20 Years of Service, for Selected Fiscal Years

34

Table 4.4: Percent of Active Duty Officer Personnel Having

Between 15 and 20 Years of Service, for Selected Fiscal Years

35

Table 4.5: Percent of Active Duty Enlisted Personnel Having More

Than 20 Years of Service, for Selected Fiscal Years

36

Table 4.6: Percent of Active Duty Officer Personnel Having More

Than 20 Years of Service, for Selected Fiscal Years

36

Table 4.7: Officer/Enlisted Ratios for Selected Fiscal Years 37

Table 4.8: Average Enlisted Pay Grades for Selected Fiscal Years 37

Page 9 GAO/NSIAD-93-241 Military Downsizing
Contents

Table 4.9: Average Officer Pay Grades for Selected Fiscal Years 38

Table 4.10: Percentages of Enlisted Personnel in The Top Five

Enlisted Pay Grades for Selected Fiscal Years

38

Abbreviations

DMDC Defense Manpower Data Center

DOD Department of Defense

DOPMA Defense Officer Personnel Management Act

GAO General Accounting Office

OSD Office of the Secretary of Defense

RIF reduction-in-force

SERB Selected Early Retirement Board

SSB Special Separation Benefit

VSI Voluntary Separation Incentive

Page 10 GAO/NSIAD-93-241 Military Downsizing
Page 11 GAO/NSIAD-93-241 Military Downsizing
Chapter 1 

Introduction

The United States is in the process of implementing the largest drawdown

of its military forces since the end of the Vietnam conflict. Both the

Congress and the Department of Defense (DOD) have established various

targets and objectives to guide that drawdown in a balanced manner, in

keeping with the nature of the military personnel system. The military

personnel system is highly structured, with specific legal and regulatory

requirements governing career advancement and service continuation.

Within the parameters of those regulatory requirements, there exists a

number of decision points where force shaping, design, and reduction

actions can be taken by the services. Given the magnitude of downsizing

underway, the Congress has provided expanded force shaping authorities

and tools to DOD to facilitate downsizing, minimize involuntary

separations, and preserve a balanced remaining force.

Reduction Targets and

Objectives

The National Defense Authorization Act for Fiscal Year 1991 (P.L.

101-510) authorized end-strength levels totaling 1.613 million active duty

military personnel as of September 30, 1995. This end strength represents

an overall reduction of 561,217 positions, or nearly 26 percent, from the

post-Vietnam peak strength of 2.174 million positions at the end of fiscal

year 1987. Likewise, the administration, in annual budget submissions

during recent years, has submitted out-year reduction targets. The

January 1993 budget submission by the previous administration projected

continuing force reductions through fiscal year 1999 at which time the

services end-strength would be 1.568 million positions.

The current administration has accelerated some previously planned

personnel reductions but for now has projected future reductions only

through fiscal year 1994; its goal for the end of fiscal year 1994 is

1.621 million positions, within 8,000 positions of the levels that the

Congress had specified for the end of the following year, fiscal year 1995.

Even so, DOD officials have indicated that further reductions will be made

as the result of a recently completed “Bottom-up Review” of DOD needs

and programs for fiscal years 1995-99; however, new reduction targets by

fiscal year were not available as of early September 1993.

Policy Objectives The Congress has articulated policy objectives to guide force reductions.

Section 402 of the National Defense Authorization Act for Fiscal Year 1991

directed the services to carry out well-balanced force reductions and to

limit reductions among career military personnel (generally those having 6

or more years of service). The act stipulated that the services could not

Page 12 GAO/NSIAD-93-241 Military Downsizing
Chapter 1 

Introduction

involuntarily separate military personnel without first having implemented

procedures to (1) limit the number of accessions; (2) increase retirements

among those eligible to do so, and (3) limit the number of personnel with

more than 2, but less than 6, years of service. In emphasizing this, the

conference report to the act stated that

“the conferees expect the Secretary of Defense to exercise prudent judgment in approving

accession levels and force profiles by grade and years of service to guide the personnel

strength reduction process in the military services as forces draw down over the next five

years.”

The conferees also stated their expectation that the military services

would maintain the same relationship between officer and enlisted

strengths as existed at the end of fiscal year 1990 in making active duty

end-strength reductions in the future.

DOD has also articulated policy objectives to reduce the military forces,

maintain a high state of readiness, treat people fairly—both those who stay

and those who leave—and ensure that careful consideration is given to

how today’s decisions will affect tomorrow’s force. Some objectives

reaffirmed congressional guidance, while others were added such as

• protecting careerists near retirement, that is, protecting all qualified

service members with 15 years of service or more until they are eligible for

retirement;

• establishing officer and enlisted accessions at levels necessary to sustain

the base force;

• using the drawdown as an opportunity, wherever possible, to balance

officer and enlisted skills; and

• establishing policies and procedures that are consistent with legislative

guidelines for officer promotion opportunity and timing and, at the same

time, controlling senior enlisted grade (top 5 grades) growth and

maintaining promotion rates.

Military Force

Management

The services are unique in terms of how they recruit and retain personnel,

as well as in how they manage military careers. Within each service, the

military personnel system is a centrally managed, “closed” system,

meaning that persons recruited with no prior military service are generally

brought in at entry level positions and progress through the ranks,

contrasted with an “open” system such as the private sector, where new

hires can be brought into an organization at various levels depending on

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Chapter 1 

Introduction

the persons’ qualifications and experiences. The military essentially

“grows its personnel from within.” Further, the military personnel system,

which is predicated on maintaining a relatively young and vigorous work

force, operates under an “up-or-out” policy in which members who fail to

receive promotions within specific time frames are limited to how long

they can remain in the service.

Many persons join the military for the education and training benefits,

particularly in the enlisted ranks, expecting to remain in the service for

only a few years. Others decide to make the military a career; for those

individuals, service continuation involves a periodic renewal or extension

of their contracted service time. Accordingly, the military services lose

significant numbers of personnel through a variety of loss programs each

year, and therefore, must recruit enough new members to replace losses

and ensure that the services will have enough well trained personnel to

meet and sustain future years’ seniority, grade, and experience

requirements. DOD data indicate that it has not been unusual for the

services to replace more than 15 percent of their active duty personnel

each year, even when the authorized end-strength levels are at a relatively

“steady state,” neither increasing or decreasing significantly.

Separate Personnel

Management Systems for

Officer and Enlisted

Personnel

The services essentially have two personnel systems for active duty

military personnel, one for officers and one for enlisted personnel. The

officer community is basically governed by the Defense Officer Personnel

Management Act (DOPMA), while enlisted personnel management is

governed by specific DOD regulations.

Officer Force Management DOPMA was enacted in 1980, establishing key parameters to managing the

officer force with the intent of maintaining a continuous flow of officers

through the military personnel system over a 20- to 30-year career path,

based on normal attrition from voluntary resignations and retirements.

The DOPMA legislation outlines standards and procedures relating to the

appointment, promotion, separation and retirement of officers in the

armed forces. For example, it stipulates how long officers of various ranks

may remain on active duty beyond normal retirement eligibility at 20 years.

It also prescribes the number of officers each service is authorized in each

of the senior ranks from the 0-4 to the 0-6 pay grades, a number that will

vary depending on officer end strengths authorized by the Congress.

Central to DOPMA is the up-or-out promotion system in which officers

generally advance in groups or cohorts originally determined by the year

Page 14 GAO/NSIAD-93-241 Military Downsizing
Chapter 1 

Introduction

of their commissioning and compete for promotion against other members

of the group at set years or zones of consideration for each paygrade. For

example, an officer commissioned in 1983 would normally be considered

for promotion to paygrade 0-4 in 1993, at the year 10 mark along with other

officers in that year group or cohort. Under the DOPMA system, a select

group of the 0-3 officers from a particular cohort can be considered for

promotion “below the zone,” that is at year 9 (or earlier in selected

instances) along with members from that year’s cohort of officers.

However, most of the 1983 commissioned officers would have their

greatest potential for promotion “in the zone” at year 10. Failing to be

selected for promotion at year 10, the officers in this cohort could have an

additional opportunity to be considered for promotion in the following

year (or later in selected instances) “above the zone,” along with that

year’s cohort. Failure to be selected for promotion then would mean these

officers could be involuntarily separated. Thus, it is essential that the force

at large be managed in such a manner that personnel are able to compete

for, attain, and complete key assignments at the right points in their career

progression.

Enlisted Force Management DOD Directive 1304.20, dated December 19, 1984, and DOD Instruction

1300.14, dated January 29, 1985, provide guidance and outline the basic

parameters to enlisted force management. The directive sets constraints

on the pay grade mix and career content (personnel with more than 4 to 6

years of service) of the enlisted force and establishes broad goals for

elements such as recruitment, career progression and timing of

promotions, service continuation, and military occupation specialty

balance. The instruction requests the services to undertake specific

enlisted force planning to incorporate long-range personnel goals. These

plans provide the Office of the Secretary of Defense (OSD) with the means

to monitor the services’ progress toward meeting the objectives of the

enlisted personnel management system.

Promotions for enlisted personnel at various pay grades are affected by

time in grade or service requirements that vary by service, and may involve

the use of selection boards. Promotions may also be affected by such

things as tests, schools attended, evaluations (ratings), and awards.

Force Management

and Shaping, a

Continual Process

Theoretically, the services could simply increase or decrease recruiting,

modifying it to take into consideration normal attrition and retirement

levels, in order to increase or decrease authorized end-strength levels.

However, given the structure and the nature of military career

Page 15 GAO/NSIAD-93-241 Military Downsizing
Chapter 1 

Introduction

management programs, such actions, according to DOD officials, could

create imbalances in the force in terms of age, skill levels, and right

numbers of personnel by specialty area. Thus, constant management of the

force at various career points is required to avoid these problems and stay

within force management regulations.

As previously discussed, the services must replace many personnel each

year, even where no changes in authorized end strength are planned. Many

personnel losses are voluntary and attributable to completion of initial

periods of obligation, and decisions by service members over whether to

continue and make the military a career choice.1

 At the other end of the

personnel pipeline, many voluntary losses each year are due to retirement

decisions. Involuntary reductions can occur anywhere along this

personnel pipeline due to misconduct. (App. II shows the services’ loss

rates by specific categories for fiscal year 1992.)

Unique to the military personnel system is a variety of military personnel

requirements and actions, in addition to regular accessions and losses, that

may be used to help shape the force, ensure balanced manning by rank

and specialties, and preserve needed career advancement opportunities.

These actions include:

• using early release programs to permit individuals to separate in advance

of their scheduled end of enlistment period;

• tightening quality controls, such as physical weight standards, governing

those who will be permitted to reenlist;

• limiting the maximum number of years that members at a given rank may

continue in the service before being denied re-enlistment opportunities;

• selecting certain nonretirement eligible personnel to be involuntarily

separated through use of formal reduction-in-force (RIF) boards; and

• selecting certain retirement eligible personnel to retire before the normal

mandatory time frame through use of formal Selected Early Retirement

Boards (SERB).

1

Initial periods of obligation for officers or enlistments for enlisted personnel generally range from 

4 years to 6 years and will vary depending on such factors as prerequisite schooling obligations and

military specialty. The concept of career status is not uniformly defined by the services; however, it

often refers to those personnel with at least 6 years of service.

Page 16 GAO/NSIAD-93-241 Military Downsizing
Chapter 1 

Introduction

Additional Authorities

Provided by the

Congress to Facilitate

Downsizing and Force

Shaping

In completing action on the National Defense Authorization acts for fiscal

years 1991, 1992, and 1993, the Congress authorized certain additional

measures to induce downsizing, and minimize the adverse affects on

individuals as they transition to civilian life. These actions included:

• expanding reduction-in-force (RIF) authority to include certain officers

previously exempt from RIF action related to the source of their

commissions;

• expanding authority for use of SERBs for officers;

• reducing certain time in grade requirements for voluntary retirements at

current grades among officers having already completed the 20 years of

total service needed to retire;

• extending lump-sum separation pay and transition assistance to enlisted

personnel who are involuntarily separated, having completed 6 years or

more of service—only officers were previously eligible to receive this

benefit;2

• authorizing two special categories of separation pay to induce voluntary

separations, the lump sum Special Separation Benefit (SSB)3

 and the

Voluntary Separation Incentive (VSI),4

 to induce voluntary separations

among those having completed 6 or more years of service at the time the

legislation was enacted; and

• providing, effective with fiscal year 1993, DOD with the authority to offer a

15-year retirement option for selected members of the military.

Persons separating under SSB and VSI provisions are also entitled to the

same transition assistance programs available to persons receiving pay

under condition of involuntary separation.5

2

Involuntary separation pay is based on a service member’s monthly basic pay rate and years of

service. Within this formula, a service member is entitled to either one-half or full separation pay

depending on the reason for involuntary separation and type of discharge. For example, an individual

separating under a RIF action, or denied reenlistment, who is otherwise fully qualified for service,

would receive full separation pay. A service member who failed to meet certain qualifications, such as

drug abuse rehabilitation failure, could be involuntarily separated and receive one-half separation pay.

A person involuntarily discharged for reasons such as misconduct is ineligible for any separation pay.

3

SSB is a one time lump-sum payment equal to 15 percent of a service member’s basic pay rate times

the years of service.

4

This incentive involves annual payments for twice the number of years of service equal to 2.5 percent

of a service member’s basic pay times the years of service. (See app. III for illustrative examples of

separation pay for military personnel under the various separation pay categories.)

5

These transition assistance programs include such programs as counseling and job placement

services, transition health care, and expanded travel and transportation allowances and leave

allowances.

Page 17 GAO/NSIAD-93-241 Military Downsizing
Chapter 1 

Introduction

Objectives, Scope,

and Methodology

The Chairman of the former Subcommittee on Manpower and Personnel

of the Senate Committee on Armed Services asked us to examine DOD’s

implementation of military downsizing in accordance with legislative

guidance and authorizations. We determined (1) what progress DOD has

made toward meeting reduction targets, (2) how downsizing actions are

affecting new recruiting or accessions, (3) what range of voluntary and

involuntary reduction actions are being taken to meet downsizing

objectives, (4) how downsizing is being accomplished across various

groupings of officer and enlisted personnel by years of service and how

this is affecting force profiles, and (5) what issues might be important to

future reduction decisions.

We reviewed congressional legislation, budget documents, manpower

statistical data, and individual service personnel plans. We also

interviewed appropriate officials at the following organizations:

• Office of the Deputy Assistant Secretary of Defense, Personnel and

Readiness, Military and Manpower Personnel Policy Directorate, and

Personnel Support Policy and Service Directorate;

• Office of the DOD Comptroller;

• Department of the Air Force, Deputy Chief of Staff for Personnel,

Directorate of Personnel Programs;

• Department of the Army, Deputy Chief of Staff for Personnel, Directorate

of Manpower;

• Department of the Navy, Bureau of Naval Personnel, Officer Plans and

Career Management Division, and Enlisted Plans and Career Management

Division; and

• Department of the Navy, Office of the Deputy Chief of Staff for Manpower

and Reserve Affairs (Marine Corps), Manpower Plans and Policies

Division.

Special Notes Regarding

Personnel Statistics

In completing this review, we made use of manpower and personnel data

from budget documents and other data sets from the Office of the

Secretary of Defense (OSD), the individual services, and the Defense

Manpower Data Center (DMDC). In portraying historical data, fiscal year

1980 was chosen because it reflected the beginning point for the defense

build-up of the 1980s; fiscal year 1987 was chosen because it reflected the

post-Vietnam peak year of active duty end-strength levels just prior to the

onset of recent downsizing activities.

Page 18 GAO/NSIAD-93-241 Military Downsizing
Chapter 1 

Introduction

Our comparison of data showed inconsistences in common data sets

among the services, OSD, and DMDC. We found inconsistencies within

singular documents, such as budget justification documents submitted to

the Congress, where the same information was presented in more than one

section of the document. These inconsistencies were more prevalent when

the data were related to future personnel actions, but also affected DOD

reports summarizing prior year actions to some extent.

Time did not permit a detailed examination of the services’ and DOD’s data

systems to fully document the validity of the data and the bases for

inconsistencies. Where discrepancies where noted, we conferred with DOD

officials for their judgments as to the most appropriate data source. We

attempted to use the best available information in all cases, recognizing

that numbers used in this report may vary slightly from other reported

sources. Thus, data presented in this report dealing with accessions and

losses should be viewed as approximations, not final and absolute

numbers. We have added special notes to tables used in this report to

further highlight data limitations as warranted.

We conducted our review from April 1992 to July 1993 in accordance with

generally accepted government auditing standards.

Page 19 GAO/NSIAD-93-241 Military Downsizing
Chapter 2 

Reduction Targets Are Being Met, but

Significant Recruiting Is Still Required

By the end of fiscal year 1993, DOD expects to have reduced its active duty

force levels more than 446,000 positions below end-strength levels that

existed at the end of fiscal year 1987, when the military was at its

post-Vietnam peak of 2.174 million positions. At the same time, and

possibly contrary to public perception, DOD is, and expects to continue,

recruiting a large number of personnel each year in order to maintain and

sustain a balanced force to meet future operational requirements. As a

consequence, a much greater degree of personnel turnover is occurring

than is generally recognized. Given the extent of personnel turbulence

involved in downsizing and shaping the force, and uncertainties over

future force levels, service officials indicate that flexibility and periodic

reassessment are required in managing accession levels.

Status of Reduction

Efforts

At the end of fiscal year 1993, DOD end-strength levels are expected to be

down to 1.728 million positions, a 21-percent reduction over fiscal year

1987’s end-strength levels; by the end of fiscal year 1994, DOD expects

end-strength levels to be at 1.621 million, a reduction of 25 percent. Table

2.1 shows the reductions accomplished and expected by the services

through fiscal year 1994.

Table 2.1: End-Strength Levels for

Selected Fiscal Years

Fiscal year

Numbers in thousands

Service 1987a 1992a 1993b 1994b

Army 781 611 575 540

Navy 587 542 526 481

Marine Corps 200 185 182 174

Air Force 607 470 445 426

Totalc 2,174 1,808 1,728 1,621

aFigures for fiscal years 1987 and 1992 are actual.

bFigures for fiscal years 1993 and 1994 are projected as of March 1993.

cNumbers may not add due to rounding.

Sources: OSD and individual military services.

The largest of the reductions are occurring in the Army and the Air Force,

which, by the end of fiscal year 1994, are slated to reduce their levels by 

31 and 30 percent, respectively, over fiscal year 1987 end-strength levels;

lesser reductions are occurring in the Navy and the Marine Corps, which

Page 20 GAO/NSIAD-93-241 Military Downsizing
Chapter 2 

Reduction Targets Are Being Met, but

Significant Recruiting Is Still Required

are to reduce their end strengths by 18 and 13 percent, respectively, by the

end of fiscal year 1994. Selected Reserve force levels will be reduced from

1.15 million in fiscal year 1987 to 1.02 million at the end of fiscal year

1994—an 11-percent reduction. (App. I more completely summarizes

current planned changes in DOD force levels by service and active and

reserve components from fiscal years 1980 through 1994.) However, as

previously discussed, reductions are planned beyond fiscal year 1994,

although complete out-year reduction targets have not yet been finalized

by the administration.

Accession Levels

Remain Relatively

High, Despite

Downsizing, to Help

Shape the Force

DOD’s recruiting plans for fiscal years 1993 and 1994 call for recruiting

about 225,000 and 206,000 persons, respectively. Table 2.2 contrasts the

levels of accessions in fiscal years 1987 and 1988 with actual accessions in

fiscal year 1992 and those projected for fiscal years 1993 and 1994.

Table 2.2: Service Accession Levels by

Fiscal Year

Fiscal year

Numbers in thousands

Service 1987a 1988a 1992a 1993b 1994b

Army 142.2 124.0 84.0 83.3 79.4

Navy 99.9 101.4 64.9 69.3 59.5

Marine Corps 36.6 37.8 33.4 36.1 32.6

Air Force 62.9 48.4 40.0 36.4 34.9

Total 341.6 311.5 222.2 225.1 206.3

aFigures for fiscal years 1987, 1988, and 1992 are actual.

bFigures for fiscal years 1993 and 1994 are projections as of July 1993.

Note: Totals may not add due to rounding.

Sources: DOD and the services.

DOD officials have reported greater difficulties in recruiting during this

period of downsizing; some service officials have attributed these

difficulties to a perception of some young people that the military is not

recruiting during downsizing or a view that the military no longer affords

Page 21 GAO/NSIAD-93-241 Military Downsizing
Chapter 2 

Reduction Targets Are Being Met, but

Significant Recruiting Is Still Required

as viable a career option as it once did.1 DOD officials also cite some early

signs of reduced quality in recent recruits. In spring 1993, DOD officials

reported that the number of new personnel with high school diplomas

dropped DOD-wide during the first half of fiscal year 1993 to 94 percent,

from a high of 99 percent in 1992; for the Army, the reduction was greater,

down to 89 percent. However, an Army official expressed optimism that

the rate could rise closer to the Army’s target of 95 percent during the

remainder of the year, the prime time for recruiting new high school

graduates. DOD officials subsequently reported in September 1993, that the

number of new military personnel DOD-wide with diplomas during the first

9 months of fiscal year 1993 was 95 percent. While this level is still lower

than the 99-percent level achieved in fiscal year 1992, it compares

favorably with the 89-percent average achieved for the period 1980

through 1992.

The Army’s current accession levels shown for fiscal year 1993 reflect a

7,000-reduction from planned levels at the beginning of the fiscal year.

However, Army officials told us that the decreased accession levels were

related primarily to faster paced reductions than originally planned, which

resulted in fewer accessions being needed, and were not related to any

decrease in quality of recruits.

Projected accession levels for fiscal years 1993 and 1994 might be

considered to be relatively high for a time of such significant downsizing;

however, total accessions planned for fiscal year 1993 are down 34 percent

in relation to fiscal year 1987’s level.

Personnel Turbulence

Is Much Greater Than

Net Reductions

Unless actual loss rates for the services each year are closely examined, it

can be concluded that the number of persons leaving the services during

these years of force downsizing is reflected simply in the changes in

service end strength. Our March 25, 1992, testimony before a

Subcommittee of the Senate Armed Services Committee noted that

shaping the force requires a larger number of accessions and attritions

than would be the case if the focus were primarily on limiting the

recruitment of personnel to achieve end-strength reduction goals.2

 Total

numbers of persons leaving the services during fiscal years 1992 and 1993

1

Some service officials also attribute recruiting difficulties to reductions in recruiting advertising

budgets. We are not in a position to either validate or refute this concern. However, we are initiating a

review of DOD recruiting practices to assess the potential for more cost-effective recruiting practices

in a downsized and fiscally constrained environment.

2

Defense Force Management: Status of Military Force Downsizing (GAO/T-NSIAD-92-20, Mar. 25,

1992).

Page 22 GAO/NSIAD-93-241 Military Downsizing
Chapter 2 

Reduction Targets Are Being Met, but

Significant Recruiting Is Still Required

were projected to be about 3 times the amount of net reductions in end

strength. For fiscal year 1994, DOD expects to recruit about 206,000 new

personnel and the departure of 313,000, for a net end-strength reduction of

about 107,000 positions. Using beginning fiscal year 1994 end-strength

levels as a base, DOD expects, during that fiscal year, to separate 19 percent

of its people, recruit 13 percent new personnel, and achieve a 6-percent

net end-strength reduction by the end of that year. The numbers of

personnel entering and leaving the services during this period of

downsizing, compounded by uncertainties and heightened anxiety levels

over future careers of others who remain, add to what many military

officials have characterized as a high degree of turbulence affecting their

forces.

While downsizing actions have of necessity resulted in significant

personnel turnover levels and turbulence, they aggravate to some extent,

already significant turnover levels associated with the services’ systems of

rotating personnel from one assignment, unit, and location to another,

including between the United States and overseas assignments. Our

previous reports on Army and Marine Corps training have noted that

senior leaders have described this personnel turbulence as one of the most

significant problems affecting the Army’s ability to maintain a trained

force.3

Establishing

Accession Levels

During Downsizing Is

Difficult

The Congress and DOD have provided guidance to the services in

establishing accession levels. Some DOD guidance suggests a greater

degree of precision is available in establishing fixed accession levels than

the services have found practical during downsizing. However, with

congressional authorizations for use of financial separation incentives to

induce voluntary attritions, DOD encouraged the services to retain

relatively high levels of accessions. It did so in order to build and sustain a

more balanced force for the future, minimize the potential for skill

imbalances and promotion stagnation, and protect career options for

remaining personnel. DOD’s action also reflects budgetary decisions to

increase the ratio of entry level to more senior personnel in the career

force to reduce the cost of the force.

The conferees to the fiscal year 1991 defense authorization act expressed

an expectation that the Secretary of Defense would exercise prudent

judgment in approving accession levels. OSD established the objective of

3

Army Training: Various Factors Create Uncertainty About Need for More Land (GAO/NSIAD-92-203,

Apr. 22, 1991) and Operation Desert Storm: War Offers Important Insights into Army and Marine Corps

Training Needs (GAO/NSIAD-92-240, Aug. 25, 1992).

Page 23 GAO/NSIAD-93-241 Military Downsizing
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Reduction Targets Are Being Met, but

Significant Recruiting Is Still Required

programming accessions to a level not greater than that required to sustain

out-year force levels. It also stated that accessions should not be

programmed to less than 85 percent of the level required to sustain the

out-year force levels.

In establishing accession rates to sustain a future force, the services must

examine historical trends in attrition and replacement rates, factor in the

probabilities of how long individuals are likely to remain on active duty,

and apply a mathematical formula to calculate replacement or accession

rates per year. Service officials point out that such forecasting can be very

imprecise without stable long-term force levels and retention patterns, two

factors that have not been present during the current downsizing.

Accordingly, service officials indicate that accession levels need to be

reassessed frequently, based on changing conditions, and adjusted to

replace losses and meet end-strength requirements. One such adjustment

has already been alluded to regarding the change in fiscal years 1993 and

1994 accession levels due to the more rapid drawdown than previously

planned.

Page 24 GAO/NSIAD-93-241 Military Downsizing
Chapter 3 

Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

The services have used a number of authorities or “tools” to reduce and

shape its force by various year groupings of officer and enlisted personnel.

These tools have ranged from use of voluntary early release programs and

financial separation incentives to induce separations to involuntary RIFs.

The services vary in the extent to which they have experienced losses

under each of these categories. (See app. II for a summary of losses

occurring during fiscal year 1992 by service.)

To achieve reductions in a balanced manner across pay grades and skill

areas, the reductions have of necessity fallen along a spectrum ranging

from voluntary, to induced, to involuntary reductions—the most adverse

being RIFs.

Voluntary Separations DOD has initiated a number of actions to facilitate voluntary separations for

persons wanting to do so. The more significant actions have involved use

of financial separation incentives and early release programs; additionally,

beginning with this fiscal year, DOD has authority to offer early retirement

for personnel with at least 15 years of service.

Separation Incentives The most publicly visible tools the services have used to achieve

downsizing objectives have centered on the use of financial separation

incentives—SSB, a lump-sum separation incentive, as well as VSI, a variable

annuity payment. Both have been used to induce separations for persons

whose eligibility is based on having completed between 6 and 

20 years of service at the time the legislation became effective in

December 1991. However, DOD data on fiscal year 1992 separations show

that the median length of service for those persons separating under SSB

and VSI programs was 11 years. Table 3.1 summarizes the number of

persons by service separating under SSB and VSI during fiscal years 1992

and 1993, and summarizes projected SSB and VSI separations in fiscal year

1994.

Page 25 GAO/NSIAD-93-241 Military Downsizing
Chapter 3 

Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

Table 3.1: Personnel Separating Under

SSB and VSI

Fiscal year Army Navy

Marine

Corps

Air

Force Total

1992a 29,134 4,177 944 17,323 51,578

1993b 12,205 4,114 1,565 11,482 29,366

1994b 10,545 6,581 700 503 18,329

Total 51,884 14,872 3,209 29,308 99,273

aNumbers shown are actual.

bNumbers shown are projections as of June 1993.

Source: OSD and the services.

Our March 1992 testimony on military force downsizing pointed out the

much greater long-term value of VSI to the recipient but also indicated that

initial trends showed an overwhelming majority of persons were opting for

the smaller value, but single lump-sum payment, of SSB;

1

 our analysis

shows that this trend continues. Of those opting for the financial incentive

separations in fiscal year 1992, 87 percent chose SSB. DOD officials expect

this trend to continue. (App. III contrasts the differing values of the

separation incentive pay options with involuntary separation pay and

indicates the costs to DOD for fiscal year 1992.)

Of all the services, the Army has made the greatest use of the separation

incentives, reflecting the fact that it has the largest reductions of any

service, both in terms of numbers and percentages. However, each of the

services has used the incentives in varying degrees to achieve downsizing

objectives as well as to shape its officer and enlisted forces.

Army officials explained that the Army has offered the incentives to all

eligible officers, except for those in the medical skills area. In some

instances, the Army has offered the incentives to officers in certain year

groups; this was predicated on the knowledge that if sufficient numbers of

persons did not elect to accept the incentives, a RIF would be required.

During fiscal year 1993, the Army targeted officers in pay grade 0-3 who

were in year groups 1983 and 1984; in fiscal year 1994, it expects to target

0-3s in year group 1985. The Army will also offer the incentives to officers

who fail their first board consideration for promotion to 0-4 during the

respective fiscal years.

1

Defense Force Management: Status of Military Force Downsizing (GAO/T-NSIAD-92-20,

Mar. 25, 1992).

Page 26 GAO/NSIAD-93-241 Military Downsizing
Chapter 3 

Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

The Navy did not begin using the incentives for its officers until fiscal year

1993, when it offered them to various officer communities within pay

grades 0-3 and 0-4. In fiscal year 1994, the Navy plans to offer the

incentives to various officer communities in pay grades 0-3 through 0-5.

The Marine Corps originally targeted officers in overstrength specialties in

pay grade 0-4 to improve promotion flows. In fiscal years 1993 and 1994, it

has offered and expects to continue offering incentives to persons in the

0-3 pay grade as well. The Air Force has made offers to most of its 0-3s and

0-4s, except pilots. In fiscal year 1994, the Air Force is planning to target

its 0-4s, including pilots.

In terms of enlisted personnel, all of the services are using the incentives

to help reduce personnel in overstrength skill areas and in other areas in

some cases. The Army has offered the incentives to enlisted members in

over-strength skills and to members who are subject to separation under

changing policies limiting how long personnel can remain on active duty

without being promoted. The Navy originally used the incentives to target

mid-grade (pay grades E-5 and E-6) members in overstrength specialties,

and in fiscal year 1994, it is expanding the eligibility to target overstrength

specialties in pay grades E-4 through E-9. The Marine Corps has used the

incentives to target enlisted members who were in skill areas no longer

needed and to reduce overstrength areas. The Air Force initially offered

the incentives primarily to mid-grade (pay grades E-4 and E-5) personnel

who had more than 9 years of service and were in less critical skill areas,

but for fiscal year 1994, it plans to target personnel in pay grade E-5. It also

plans to open up the eligibility criteria incrementally, as necessary.

The services’ use of these incentives accounted for 13 percent of overall

service separations in fiscal year 1992, and their use is expected to

account for 9 percent and 6 percent, respectively, in fiscal years 1993 and

1994. According to OSD, the decreasing numbers in fiscal years 1993 and

1994 reflect the fact that most persons interested in the incentives have

taken them and that the base of eligible personnel is lessening. The base of

eligible persons grows smaller each year since a service member must

have had between 6 and 20 years of service as of December 5, 1991, when

the legislation became law. Thus, the total population of potentially

eligible personnel is decreasing yearly. Additionally, this legislation only

authorizes the use of these incentives through fiscal year 1995. As of now,

the Navy is projecting that its 0-3 officer population in the 1987 year group

is in excess of requirements. Regardless of additional reductions in

authorized end-strength levels resulting from the recent Bottom-up

Review, the 1987 year group contains approximately 2,000 officers more

Page 27 GAO/NSIAD-93-241 Military Downsizing
Chapter 3 

Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

than DOPMA 0-4 limitations will allow to be promoted without causing an

imbalance. This means that around fiscal year 1996 the Navy will be faced

with either implementing RIF actions or seeking temporary legislative

waivers to DOPMA grade tables to permit the promotion of a greater number

of personnel than would otherwise occur. An extension of authority for

the incentives and the window of eligibility would offer another option for

dealing with this situation; an option already used by the Army in fiscal

years 1992 and 1993.

Early Release Programs Under early release programs, the services permit individuals to separate

in advance of their scheduled end of enlistment period; the early releases

generally occur in the same year that personnel are scheduled to separate,

but there have been instances where they have occurred earlier. They are

used most often to separate persons during their first term of enlistment,

generally those who fall within 2 to 6 years of service. These programs

have been used in recent years by all of the services, except for the Marine

Corps (see table 3.2).

Table 3.2: Separations Through Early

Release Programs in Fiscal Years 1992

and 1993 Fiscal year Army Navy

Marine

Corps

Air

Force Total

1992a 34,705 3,743 0 1,770 40,218

1993b 300 2,132 0 1,071 3,503

Total 35,005 5,875 0 2,841 43,721

aNumbers shown are actual.

bNumbers shown are projections as of June 1993.

Source: Service officials.

Service officials report that they have had to make less use of the

programs in fiscal years 1992 and 1993 than in earlier years, before the

availability of financial separation incentives. However, service officials

indicate that this is still an important tool to use as needed to help reduce

and shape that portion of the force having less than 6 years of service; it

can be a particularly attractive tool from a cost saving standpoint, since it

can help reduce salary costs in the year in which it is used and does not

involve any severance pay.

Page 28 GAO/NSIAD-93-241 Military Downsizing
Chapter 3 

Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

Early Retirement In the National Defense Authorization Act for Fiscal Year 1993, the

Congress authorized DOD to temporarily approve the retirement of military

personnel with at least 15, but less than 20, years of service to further

facilitate downsizing and avoid involuntary separations. DOD’s

implementing guidance gives each of the services authority to prescribe

criteria for eligibility for early retirement, including such factors as grade,

years of service, and skill area. The guidance stipulates that the authority

should be used to retire members who are excess to the services’ shortand long-term needs and that, if possible, the services should manage their

programs so those members nearest 20 years of service are offered early

retirement first. Authorizing legislation stipulates that retirement pay for

those personnel leaving under this program will reflect a reduction of

1 percent for each year short of 20 years. Table 3.3 summarizes the

planned use of this authority by each of the services.

Table 3.3: Planned Military Separations

Using Early Retirement Authority in

Fiscal Years 1993 and 1994 Fiscal year Army Navy

Marine

Corps

Air

Force Total

1993a 1,450 0 100 39 1,589

1994a 5,082 1,400 0 4,997 11,479

Total 6,532 1,400 100 5,036 13,068

aNumbers shown are projected as of April 1993.

Source: Service officials.

Each of the services indicates that it is still in the process of determining

how extensively it will use this authority. However, this authority is

generally being used to target overstrength skill areas and year groups

starting with those close to 20 years of service. The Air Force and the

Army have each tentatively targeted the majority use of the early

retirement authority toward their enlisted ranks while the Navy is

targeting primarily its officer force. The Marine Corps plans to use this

authority only during fiscal year 1993 to separate 100 officers.

Less Than Voluntary

Means Also Used

While the various force management tools have been helpful in minimizing

the need for involuntary separations, the services have still had to separate

some personnel having less than 20 years of service under less than

voluntary means, such as through formal RIF actions, to meet downsizing

and force shaping objectives. Additional reductions have occurred through

the use of SERBs to reduce the ranks of retirement eligible personnel. Other

Page 29 GAO/NSIAD-93-241 Military Downsizing
Chapter 3 

Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

controls over service continuation have also been used to further reduce

the force.

RIFs In fiscal year 1992, the Army was the only service to separate personnel,

those at the 0-4 level, through formal RIF actions; this included 244 officers.

Early in fiscal year 1993, the Air Force separated 1,595 officers by RIF

actions, principally affecting 0-3 level officers. The Army also anticipated

using RIF actions in fiscal year 1993 but obtained enough voluntary

attritions from repeated VSI and SSB offers among 0-3 officers in year

groups 1983 and 1984. None of the services has used RIF procedures to

date to separate enlisted personnel. However, the services can deny

reenlistment to enlisted personnel without the need for RIF action.

SERBs Each of the services has used available SERB authority to reduce the

population of officers and enlisted personnel already eligible to retire.

Although a SERB is not technically considered an involuntary separation, it

is considered to be essentially that by the persons who are selected to

retire under this formal board selection procedure. In fiscal year 1992, a

total of 3,429 officer and enlisted personnel were formally selected for

retirement under SERB procedures (see table 3.4), and the services project

similar numbers in fiscal years 1993 and 1994 (see tables 3.5 and 3.6).

Table 3.4: SERB Reductions for Fiscal

Year 1992

Army Navy

Marine

Corps

Air

Force Total

Officers 1,735 350 125 979 3,189

Enlisted 160 0 80 0 240

Total 1,895 350 205 979 3,429

Source: OSD.

Table 3.5: SERB Reductions Planned

for Fiscal Year 1993

Army Navy

Marine

Corps

Air

Force Total

Officers 807 422 78 1,533 2,840

Enlisted 0 720 40 0 760

Total 807 1,142 118 1,533 3,600

Note: Numbers shown are projections as of July 1993.

Source: OSD.

Page 30 GAO/NSIAD-93-241 Military Downsizing
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Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

Table 3.6: SERB Reductions Planned

for Fiscal Year 1994

Army Navy

Marine

Corps

Air

Force Total

Officers 659 400 80 654 1,793

Enlisted 0 800 0 0 800

Total 659 1,200 80 654 2,593

Note: Numbers shown are projections as of July 1993.

Source: OSD.

Other Tools Used to

Reduce the Force

The services have used other force shaping tools to facilitate downsizing,

including tightening quality control standards for those persons who are

allowed to continue in military service and limiting the maximum number

of years that a member may serve at a given pay grade before being denied

reenlistment rights.

Tightened Quality Control and

Retention Standards

Each of the services has also tightened quality standards affecting the

ability of military personnel to continue their careers at the conclusion of

their initial periods of obligated service. Actions taken have included

shifting from decentralized to centralized approval authority over

reenlistments. In addition, greater attention is being given to physical

fitness and weight standards and substance abuse. Service officials told us

that tightened standards are more apt to affect enlisted personnel in their

first enlistments than career personnel. They indicated that the number of

persons in their first enlistment permitted to reenlist is also affected by a

reduced need for certain skills. Numbers of persons affected by these

controls are included within the tabulations of all persons leaving the

services each year at the end of their term of service or contract and are

not broken out separately (see app. II).

Limiting Service Continuation

Without Further Promotions

Each of the services has reduced time frames or tenure standards

governing how long career enlisted members may stay at a given pay grade

before being denied reenlistment rights.

• The Navy reduced the time that persons in enlisted grades E-6, E-7, and

E-8 could serve without further promotion from 23 to 20, 26 to 24, and 28

to 26 years, respectively.

• The Marine Corps changed its tenure rule for only one pay grade, E-7,

reducing service time from 25 to 22 years.

Page 31 GAO/NSIAD-93-241 Military Downsizing
Chapter 3 

Various Tools Used to Downsize the Force

Across Career Groups, but Some Less Than

Voluntary Reductions Are Required

• The Air Force made changes in tenure rules for pay grades E-4 and E-6

through E-8; the most significant change being to reduce the authorized

tenure for an E-4 from 20 to 10 years.

• The Army has changed tenure rules for those in pay grades E-4 through

E-8.

Service officials indicate that these tightened standards have been

responsible for facilitating the early departure of a number personnel;

however, precise numbers are not available. Some of these persons

retired, whereas others not eligible for retirement separated under

financial separation incentive programs.

Page 32 GAO/NSIAD-93-241 Military Downsizing
Chapter 4 

Long-Term Changes in Selected Force

Profiles Have Continued Moderately During

Downsizing

DOD’s use of its various force shaping tools has helped to control, though

not entirely contain, personnel growth in force profiles such as years of

service and pay grades. These changing force profiles are part of a longer

term trend dating to before the onset of downsizing efforts in the late

1980s. Table 4.1 aggregates these changing profiles at the DOD level for

fiscal years 1980, 1987, and 1992.

Table 4.1: Changing Force Profiles by

Selected Fiscal Years Fiscal year

1980 1987 1992

Percent of enlisted personnel having less than 4 years of

service 57.6 49.7 42.7

Percent of enlisted personnel having between 15 and 20

years of service 7.3 8.2 11.6

Percent of officer personnel having between 15 and 20

years of service 14.7 16.6 17.1

Percent of enlisted personnel having more than 20 years of

service 3.2 3.0 3.4

Percent of officer personnel having more than 20 years of

service 11.1 11.4 12.6

Officer to enlisted ratios 1/6.3 1/6.0 1/5.6

Average enlisted pay grades 4.0 4.3 4.4

Average officer pay grades 3.2 3.2 3.3

Percent of enlisted personnel in the top 5 enlisted pay

grades 39.2 43.0 46.7

Source: DMDC.

There are positive and negative aspects of such changes in force profiles

affecting each of the services.

A More Experienced

Force

In recent years, the military services have been widely recognized and

cited by senior military leaders as being more capable and better trained

than ever. One of the factors contributing to this, according to various

military officials, has been the growth in experience levels of military

personnel, gauged by length of service. This situation exists across various

groupings of personnel by years of service ranging from those in their

initial tours of duty to those eligible for retirement.

Decreases in Percentages

of Pre-Career Personnel

Since fiscal year 1980, each of the services, to varying degrees, has

experienced a continual growth in experience levels, particularly for

Page 33 GAO/NSIAD-93-241 Military Downsizing
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Long-Term Changes in Selected Force

Profiles Have Continued Moderately During

Downsizing

enlisted personnel. This trend is most pronounced in terms of the decline

in percentages of pre-career personnel. Table 4.2 shows the decline in

enlisted personnel having less than 4 years of service for each of the

services at the end of fiscal years 1980, 1987, and 1992.

Table 4.2: Percent of Active Duty

Enlisted Personnel Having Less Than

4 Years of Service, for Selected Fiscal

Years

Fiscal Year Army Navy

Marine

Corps

Air

Force

DODwide

1980 60.3 57.9 72.1 48.1 57.6

1987 53.4 49.8 60.7 40.4 49.7

1992 46.4 43.4 58.1 30.1 42.7

Source: DMDC.

Similar though less dramatic changes have also occurred within the officer

ranks of each of the services.

Increases in Percentages of

Personnel Nearing

Retirement

Growth in service experience levels is seen in proportional increases in

numbers of service members having more than 15, but less than 20, years

of service. Table 4.3 shows the percentage of enlisted personnel having

between 15 and 20 years of service for each of the services at the end of

fiscal years 1980, 1987, and 1992.

Table 4.3: Percent of Active Duty

Enlisted Personnel Having Between 15

and 20 Years of Service, for Selected

Fiscal Years

Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 5.6 7.9 3.0 10.7 7.3

1987 7.5 7.4 5.0 11.2 8.2

1992 11.7 9.9 7.2 15.4 11.6

Source: DMDC.

Increases have also been noted in the percentage of officer personnel with

more than 15 years of service. Table 4.4 shows the percentage of officer

personnel having between 15 and 20 years of service for each of the

services at the end of fiscal years 1980, 1987, and 1992.

Page 34 GAO/NSIAD-93-241 Military Downsizing
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Long-Term Changes in Selected Force

Profiles Have Continued Moderately During

Downsizing

Table 4.4: Percent of Active Duty

Officer Personnel Having Between 15

and 20 Years of Service, for Selected

Fiscal Years

Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 14.2 14.3 12.0 16.0 14.7

1987 14.3 16.4 17.3 18.6 16.6

1992 16.0 16.1 18.0 18.5 17.1

Source: DMDC.

As indicated in tables 4.3 and 4.4, the percentage of members near

retirement has risen in all four services over the past 12 years. One reason

for part of the increase is related to an overall trend toward a more

experienced force since the all-volunteer force began in 1973. Until 1988,

according to DOD officials, service members with more than 15 years had

entered military service prior to the all-volunteer force system, which

drafted a significant portion of the required accessions. Another reason is

that, in recent years, the Congress and DOD have emphasized protecting

members near retirement from involuntary separations. The percentages

could stabilize or decline somewhat within the next 2 years as the services

make use of new temporary authority to offer early retirement for

personnel having completed between 15 and 20 years of service. All of the

services, however, indicate that they are still in the process of determining

how extensively they will use this new authority.

While this move toward a more senior force has occurred in each of the

services, the “youth to experience” mix has always differed significantly

among the services. As high as the percentages are for services in fiscal

year 1992, they are much less than they were at the end of fiscal year 1980.

The high number of personnel with relatively few years of experience

points to relatively high personnel turnover rates within the services. This

is an important addition to the more frequently recognized turbulence

involving the rotation of personnel from one unit or assignment to

another, including to and from overseas assignments.

Tradeoffs exist between a force that is more senior and a force that is

more junior and relatively less experienced. Generally, service officials

believe that the trend indicated by table 4.1 is one indicator of a better

trained force than the one that existed prior to the all-volunteer force or

during the mid- to late-1970s, a time often referred to as a period of the

“hollow force.” OSD officials also share this view. However, they are also

aware that, along with this growth in experience, there comes an increase

Page 35 GAO/NSIAD-93-241 Military Downsizing
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Long-Term Changes in Selected Force

Profiles Have Continued Moderately During

Downsizing

in average personnel costs, and OSD has, during this drawdown, exerted

influence on the services to maintain relatively high accession levels,

thereby having the effect of slowing these recent trends. For example,

while the relative size of the lower ranking enlisted population dropped

steadily during the 1980s, that level of decline has slowed in recent years

with the DOD average changing from 43.1 percent at the end of fiscal year

1991 to 42.7 percent at the end of fiscal year 1992.

Controlled Increases in

Retirement Eligible

Population

Since fiscal year 1980, the percentage of members with more than 20 years

of service has increased moderately, more so for officer than enlisted

personnel. Tables 4.5 and 4.6 show the percentages of enlisted personnel

and officers having more than 20 years of service, for each of the services,

at the end of fiscal years 1980, 1987, and 1992.

Table 4.5: Percent of Active Duty

Enlisted Personnel Having More Than

20 Years of Service, for Selected Fiscal

Years

Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 2.6 2.7 1.8 5.0 3.2

1987 2.2 2.9 1.7 4.7 3.0

1992 2.8 3.1 2.2 5.1 3.4

Source: DMDC.

Table 4.6: Percent of Active Duty

Officer Personnel Having More Than

20 Years of Service, for Selected Fiscal

Years

Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 9.6 12.7 11.2 11.5 11.1

1987 11.2 11.7 10.4 11.7 11.4

1992 11.3 13.5 12.2 13.0 12.6

Source: DMDC.

While the percentage of enlisted personnel with more than 20 years of

service increased slightly DOD-wide, the average increase for officers was

more noticeable from fiscal year 1980 through fiscal year 1992, with the

greatest increase occurring between fiscal years 1985 and 1988. However,

to a certain extent, each of the services minimized the potential for greater

growth during fiscal year 1992 by the use of SERBs, and each service

expects to do so further in coming fiscal years, with the greatest emphasis

on officer personnel.

Page 36 GAO/NSIAD-93-241 Military Downsizing
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Long-Term Changes in Selected Force

Profiles Have Continued Moderately During

Downsizing

Officer to Enlisted

Ratios Continue to

Rise

Congressional conferees, in providing force reduction guidance, indicated

a desire to see the services maintain the same relationship between officer

and enlisted ranks as existed at the end of fiscal year 1990. However, as

shown in table 4.7, some moderate growth in the ratio of officers to

enlisted personnel has occurred.

Table 4.7: Officer/Enlisted Ratios for

Selected Fiscal Years

Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 1/6.8 1/7.2 1/9.4 1/4.7 1/6.3

1987 1/6.2 1/7.1 1/8.9 1/4.6 1/6.0

1990 1/5.9 1/6.9 1/9.0 1/4.3 1/5.8

1992 1/5.4 1/6.8 1/8.6 1/4.2 1/5.6

Source: DMDC.

The changes occurring since fiscal year 1990 are reflected in a longer term

trend as indicated by the change between fiscal years 1980 and 1992. Some

service officials believe that some shift in officer to enlisted ratios is

inherent in downsizing. That is, officer to enlisted ratios typically rise

during downsizing as reductions are made to the proportionally larger

enlisted ranks and fall during a build-up as proportionately more enlisted

personnel are added. Army officials also point to congressionally

mandated increases in medical personnel manning levels that have

required retention of more officer personnel.1

Average Pay Grades

Increase

Changes have also been noted in the average pay grades of officer and

enlisted personnel during downsizing, as well as being part of a longer

term trend, evidenced by changes since fiscal year 1980. Table 4.8 shows

changes in average enlisted pay grades for fiscal years 1980, 1987, and

1992.

Table 4.8: Average Enlisted Pay

Grades for Selected Fiscal Years

Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 3.99 4.06 3.50 4.27 4.03

1987 4.29 4.26 3.85 4.40 4.27

1992 4.44 4.43 3.89 4.63 4.43

Source: DMDC.

1

The National Defense Authorization Act for Fiscal Year 1991 restricted the services’ abilities to reduce

medical personnel.

Page 37 GAO/NSIAD-93-241 Military Downsizing
Chapter 4 

Long-Term Changes in Selected Force

Profiles Have Continued Moderately During

Downsizing

Table 4.8 and additional data we examined for each of the intervening

years show an upward trend in average enlisted pay grades, with a

9.98 percent increase DOD-wide, since fiscal year 1980, with little

differentiation in the degree of change occurring annually during the

current downsizing period from earlier years.

In comparison with enlisted personnel pay grades for these three fiscal

years, a less significant change occurred in officer pay grades (see table

4.9).

Table 4.9: Average Officer Pay Grades

for Selected Fiscal Years

Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 3.19 3.18 2.88 3.20 3.17

1987 3.21 3.15 2.94 3.24 3.19

1992 3.27 3.24 3.00 3.37 3.28

Source: DMDC.

However, as with enlisted personnel, officer pay grades show little

difference in the degree of annual change during the current downsizing

period from earlier years.

Growth in Top Five

Enlisted Pay Grades

DOD’s guidance to the services in planning for downsizing stipulated that

they should control growth in the top five enlisted pay grades. Table 4.10

shows the percentages of enlisted personnel in the top five enlisted pay

grades (E-5 through E-9) for fiscal years 1980, 1987, and 1992.

Table 4.10: Percentages of Enlisted

Personnel in the Top Five Enlisted Pay

Grades for Selected Fiscal Years Fiscal year Army Navy

Marine

Corps

Air

Force

DODwide

1980 38.0 40.9 28.0 43.4 39.2

1987 42.3 45.3 30.8 46.0 43.0

1992 45.4 49.9 31.9 51.0 46.7

Source: DMDC.

The table shows that these top five pay grades have increased by several

percentage points relative to the overall enlisted force during downsizing;

however, this growth is also part of a longer term growth trend. Our

Page 38 GAO/NSIAD-93-241 Military Downsizing
Chapter 4 

Long-Term Changes in Selected Force

Profiles Have Continued Moderately During

Downsizing

examination indicates that the greatest degree of growth is concentrated

in pay grades E-6 and E-7.

OSD and service officials offered a number of observations about the

growth in pay grades. They stated that the changing technology and the

complexity of today’s weapon systems have increased the requirement for

more senior positions.2

 These officials also stated that a smaller force is a

more senior force; however, we do not necessarily agree that this has to be

the case since our examination of the top officer pay grades shows a much

smaller increase in senior pay grades. These officials further expressed the

view that the current growth in senior enlisted ranks is temporary and that

they expect some leveling off in the future with the changes in tenure

rules, and use of SERBs and early retirements; they also stated that OSD and

service controllers are watching the increase because of budgetary

concerns. It is not clear to us that this is necessarily a temporary situation

given the long-term trend shown in table 4.10. We do agree, however, that

this is a situation that should be watched from a budgetary standpoint.

2

The scope of this review did not extend to verifying and validating DOD and service requirements.

Page 39 GAO/NSIAD-93-241 Military Downsizing
Chapter 5 

Issues Affecting Future Reduction Decisions

Although DOD has already achieved much of its previously planned force

reductions, additional reductions are planned. However, as indicated in

chapter 2, effective downsizing requires more than the curtailment of

recruiting; it requires maintaining significant levels of recruiting and

preserving a continuous personnel stream. This situation adds to the

importance of using the various force shaping and downsizing tools

discussed in chapter 3 to achieve downsizing goals in a manner that

retains a balanced force and viable career opportunities for the future. Use

of these tools has helped to shape and minimize distortions in the force

but, as indicated in chapter 4, there are some continuing changes in

selected force profiles that are part of much longer term trends.

Collectively, the issues discussed in this report help to focus attention on

some issues we believe are key to future force reduction decision-making.

These issues include continuing changes in overall force profiles, pace of

future reductions, correlating such reductions to changes in force

structure, and determining what accession levels should be, factoring in

multiple trade-offs. However, the recent drawdown experience does more

to offer perspectives on these issues than to suggest simple, fixed answers

for the future.

Desired Force Profiles Optimum force profiles in terms of experience levels, average pay grades,

and officer/enlisted ratios are not clearly established and would likely be

difficult to develop with any degree of uniformity among the services.

Nevertheless, because of their impact on readiness and costs, we believe

that general trends in force profiles should be considered by the

administration and the Congress in deciding future force levels. At the

same time, we believe that areas such as officer/enlisted ratios and

increasing average pay grades could benefit from more in-depth analyses

to determine to what extent the growth represents validated requirements

and how future downsizing decisions are apt to affect these requirements.

We expect to complete more in-depth reviews of personnel requirements

in the future.

Pace and Balance in

Force Reductions

In considering how quickly further reductions should occur, it will be

important to consider that DOD’s military personnel system experiences

significant turbulence with high levels of personnel turnovers during

normal times and that this turbulence can be compounded by required

reductions to end strength. The turbulence is not caused simply by the

exodus of personnel; it also includes the intake of new personnel to be

Page 40 GAO/NSIAD-93-241 Military Downsizing
Chapter 5 

Issues Affecting Future Reduction Decisions

trained and added to units. Turbulence also is associated with the normal

rotation of personnel from one assignment or unit to another.

Another consideration is the impact of personnel reductions on unit

manning levels. Army officials acknowledge that, during the current

drawdown, personnel reductions have occurred more quickly than have

changes in unit force structure, creating some undesired undermanning of

units. While they expect this problem to correct itself as future unit

structure reductions occur, they recognize and have some concern that the

problem could be exacerbated with likely increases in personnel reduction

targets unless the targets are well correlated with additional structural

reductions.

Determining

Accession Levels

In determining accession levels, it will be important to consider the shortand long-term potential impact of any significant reduction in accession

levels on the force. In the short term, significant reductions in accession

levels can be attained but, in doing so, they can result in a relatively more

costly, but more experienced force—as the average pay grades for the

remaining force increase. From a long-term perspective, significant

curtailment of accessions today can pose greater potential for force

imbalances in the future—imbalances associated with a higher graded

force and reduced promotion and career opportunities for younger

members of the force.

One additional factor that could affect accession levels is the quality of

new recruits. DOD has recently noted a drop in the quality of new recruits

during the first half of fiscal year 1993. This trend, should it continue,

could suggest the need to make some further trade-offs between high

accession levels and the loss of quality, experienced personnel. DOD has a

number of tools available to help shape the force as reductions occur,

tools that can be used in combination to produce a balanced force across

pay grades, year groups, and skill areas.

Conclusions DOD has accomplished a majority of its previously planned active duty

force reductions; however, senior DOD officials have indicated that further

reductions are planned as the result of a recently completed review of

future DOD needs. DOD and the services have reduced accession levels over

previous years, but are still recruiting large numbers of personnel each

year as part of their efforts to preserve and sustain a balanced force for the

future.

Page 41 GAO/NSIAD-93-241 Military Downsizing
Chapter 5 

Issues Affecting Future Reduction Decisions

DOD has used various force shaping authorities or tools to help drawdown

the military forces in a balanced manner, with an emphasis on voluntary

reductions. DOD’s ability to meet force reduction targets while seeking to

retain a balanced remaining force has been enhanced by the various

authorities, including incentives and transition assistance that the

Congress has provided. Many of these special authorities expire at the end

of fiscal year 1995. Extension of these authorities is warranted if the

Congress desires to continue its emphasis on minimizing involuntary

reductions, as end-strength reductions continue to occur.

DOD’s approach to force reductions, along with its continued emphasis on

accessions, has helped to control, although not entirely contain, some

proportional personnel growth in years of service and rank. A negative

consequence of such growth is increased cost; however, a positive aspect

is increased experience levels. These two issues will require trade-offs in

force shaping.

Matters for

Congressional

Consideration

Given that DOD’s downsizing is apt to continue for several more years, the

Congress, to the extent it desires a continuing emphasis on minimizing

involuntary separations, may want to consider extending the use of special

financial separation incentive programs beyond the current deadline of

fiscal year 1995. Also, the original authority for use of the separation

incentives was limited to those who had attained 6 years of service at the

time the legislation was enacted in December 1991. Therefore, the

Congress may also want to amend the legislation to include all who have

attained 6 years of service within the time frame for which the incentives

are authorized as a means of broadening the pool of persons eligible for

the incentives and minimize the potential for greater involuntary

separations in the future.

Agency Comments DOD fully concurred with the report’s findings and matters for

congressional consideration. (See app. IV.)

Page 42 GAO/NSIAD-93-241 Military Downsizing
Page 43 GAO/NSIAD-93-241 Military Downsizing
Appendix I 

Military End-Strength Levels, Fiscal Years

1980 Through 1994

Numbers of personnel in thousands

FY 1980 FY 1987 FY 1994b

Net change between

FY 1980 and FY 1994

Net change between

FY 1987 and FY 1994

Active duty

Army 776.5 780.8 540.0 –236.5 (–30%) –240.8 (–31%)

Navy 527.2 586.8 480.8 - 46.4 (–09%) –106.0 (–18%)

Marine Corps 188.5 199.5 174.1 - 14.4 (–08%) - 25.4 (–13%)

Air Force 558.0 607.0 425.7 –132.3 (–24%) –181.3 (–30%)

Total 2,050.2 2,174.1 1,620.6 –429.6 (–21%) –553.5 (–25%)

Guard and reserves

Army 581.5 765.5 670.0 + 88.5 (+15%) - 95.5 (–12%)

Navy 97.0 148.3 113.4 + 16.4 (+17%) - 34.9 (–24%)

Marine Corps 35.7 42.3 36.9 + 1.2 (+03%) - 5.4 (–13%)

Air Force 155.2 195.0 199.2 + 44.0 (+28%) + 4.2 (+02%)

Total 869.4 1,151.1 1,019.5 +150.1 (+17% –131.6) (–11%)

Combined military

Army 1,358.0 1,546.3 1,210.0 –148.0 (–11%) –336.3 (–22%)

Navy 624.2 735.1 594.2 - 30.0 (–05%) –140.9 (–19%)

Marine Corps 224.2 241.8 211.0 - 13.2 (–06%) - 30.8 (–13%)

Air Force 713.2 802.0 624.9 - 88.3 (–12%) –177.1 (–22%)

Totala 2,919.6 3,325.2 2,640.1 –279.5 (–10%) –685.1 (–21%)

aTotals may not add due to rounding.

bPrior-year data are actual, while future-year data are projected as of March 1993.

Sources: OSD and individual services. Prior-year data are actual while future-year data are

projected as of March 1993.

Page 44 GAO/NSIAD-93-241 Military Downsizing
Appendix II 

Active Duty Military Personnel Separations

During Fiscal Year 1992

Numbers are in thousands

Reason Army Navy

Marine

Corps

Air

Force Total

Expired term of service/contract 44.9 36.5 21.4 22.3 125.1

Early out release 34.7 3.7 0.0 1.8 40.2

SSB incentive 25.5 3.6 0.7 15.0 44.8

VSI 3.6 0.6 0.2 2.3 6.7

SERB 1.7 0.4 0.2 1.0 3.2

Regular retirement 18.2 9.2 2.7 16.8 47.0

Involuntary separation

With separation pay 5.4 0.8 1.9 2.9 11.0

Without separation pay 11.5 20.4 5.4 0.1 37.3

Othera 40.0 23.9 10.4 19.4 93.7

Totalb 185.4 99.0 42.9 81.6 409.0

aIndividual services vary somewhat in the extent to which they indicate losses through “involuntary

separation” and other categories. The other category includes separations for not meeting

physical requirements, hardship, death, trainee losses, unsuitability, misconduct, desertion,

attrition of active duty reservists, miscellaneous adjustments, and others. Both other and

involuntary separation without pay categories appear to be closely related.

bNumbers and totals shown will vary somewhat from actual data due to rounding.

Source: Military service officials.

Page 45 GAO/NSIAD-93-241 Military Downsizing
Appendix III 

Illustrated Severance Pay Options Related to

Downsizing for Selected Pay Grades

Enlisted—E-6 Officer 0-4

Years of service 15 15

Annual basic pay before separation $ 21,121 $ 43,376

Severance pay if involuntarily

separated—lump suma

$ 31,682 $ 65,065

SSB option—lump sumb $ 47,523 $ 97,597

VSI option—annuityc

Annual $ 7,920 $ 16,266

Total $237,614 $487,985

15-year retirement option—monthlyd

Annual $ 7,524 $ 15,453

Total For life For life

aInvoluntary separation pay is based on the service member’s monthly basic pay rate and years

of service. This one time lump-sum payment is equal to the final monthly basic pay times 

12 months, times 10 percent, times the years of service. DOD’s involuntary separation payments

in fiscal year 1992 totaled $168.5 million (including separations relating to downsizing actions as

well as other involuntary separations).

bSSB is a one time lump-sum payment equal to 15 percent of a service member’s basic pay rate

times the years of service. DOD’s SSB payments in fiscal year 1992 totaled $1,691.6 million.

cVSI involves an annual annuity for twice the number of years of service equal to 2.5 percent of

the service member’s basic pay times the years of service. DOD’s VSI payments to individual

recipients in fiscal year 1992 totaled $70.7 million.

dEarly retirement pay which is paid monthly is based on a service member’s annual basic pay

times the years of service, times 2.5 percent, times a reduction factor (1.0 minus 0.01 for each

year of service less than 20). The 15-year retirement program is being implemented during fiscal

year 1993.

Page 46 GAO/NSIAD-93-241 Military Downsizing
Appendix IV 

Comments From the Department of Defense

Page 47 GAO/NSIAD-93-241 Military Downsizing
Appendix V 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Norman J. Rabkin, Associate Director

Barry W. Holman, Assistant Director

David E. Moser, Evaluator-in-Charge

Jacqueline E. Snead, Evaluator

James P. Tallon, Evaluator

(391181) Page 48 GAO/NSIAD-93-241 Military Downsizing
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