The Cost of a Military Person-Year: A Method For Computing Savings From Force Reductions

by Dahlman, Carl J.

• ISBN13: 9780833041517
• ISBN10: 0833041517
• Format: Paperback
• Copyright: 2007-08-14
• Publisher: RAND Corporation

Summary

This work presents a new method of estimating the cost of a military person-year that focuses on the actual cost of the retirement benefits that the federal government must provide to military personal, where previously available measures focused only on annual retirement-fund accrual costs. A major implication of this alternative calculus is that truly effective force management requires an increased focus on the cost of personnel.

Table of Contents

Preface	p. iii
Figures	p. vii
Tables	p. ix
Summary	p. xi
Acknowledgments	p. xvii
Abbreviations	p. xix
Introduction	p. 1
Personnel Costs and DoD-Regulated Conversion Rates	p. 5
Estimating the Cost of Military Personnel Using the DoD-Mandated Calculus	p. 5
DoD-Mandated Cost Factors	p. 13
The Cost of Deferred Compensation	p. 19
The Principle and Practice of Accrual Funding	p. 19
Weighting Normal Cost with Retirement Probabilities	p. 31
Conclusion and Implications	p. 45
Calculating the Correct Cost of Eliminating a Military Person-Year	p. 47
Recomputing the Total Cost of Postretirement Benefits	p. 47
A Simple Computational Example	p. 49
The Full Economic Cost of a Military Person-Year	p. 54
Applying the Calculus	p. 73
Policy and the Military-Civilian Balance in DoD	p. 73
Examples of Personnel Constraints Affecting Civilianization	p. 81
The Spoils and Their Division	p. 87
The Practice of Drawdowns	p. 99
Concluding Comment	p. 102
Final Issues, Conclusions, and Recommendations	p. 107
Military Versus Civilian: A Hypothetical Cost Comparison	p. 107
Trust Fund Accrual Versus Cost Accounting	p. 111
On the Equity and Efficiency of the Military Compensation System	p. 120
Final Note	p. 124
Grades and Titles for Military Officers and Enlisted Personnel	p. 127
References	p. 129
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