Aware they must start early saving for retirement, young people entering the military want 401 retirement accounts to help them do it, the Navy's civilian leader says.
"The economy is benefiting, but our men and women in uniform have not," Navy Secretary John Dalton said. "I think the American people would be supportive."Dalton, who has announced plans to resign this year after more than five years in office, told a group of defense writers this week that he is asked about such issues every time he visits with sailors.
"Our young people are very well-informed" and much more cognizant of pay scales and the need for long-term savings for retirement than when he was in the service, the 56-year-old former Navy officer said.
The 1998 monthly basic pay rate for a recruit is $856.80.
Improved benefits and pay rates more comparable to the private sector would go far toward helping the military cope as it competes for young people in the growing American economy, Dalton said.
He said the Navy will be short 7,000 sailors this year, putting pressure on recruiters to garner more enlistees and on the service to retain experienced personnel. There are 380,700 men and women in the Navy and 1,398,000 in all of the active-duty uniformed forces.
Although there has been no formal cost analysis, Dalton said something like a 401 would be "the least costly" move. "It's the minimum thing we could do," he said.
The Navy is adding recruiters, increasing its advertising and promoting its college savings funds to attract more sailors. Dalton said he has begun a letter-writing campaign to high school principals to help get recruiters into schools.
A 1964 graduate of the Naval Academy, Dalton served in the Navy from 1964 to 1969 aboard the submarines USS Blueback and USS John C. Calhoun.
Defense Secretary William Cohen supported Dalton's suggestion about service members' finances, commenting during a Pentagon photo session that he is looking "across the board" to improve pay and benefits for all.
"We have a booming economy, and we have some challenges - to say the least - in attracting people into the service," Cohen said. "We're trying to maintain the very high standards that we have and to achieve our recruiting, our retention goals."
The House approved a 3.1 percent pay increase for the military as part of the 1999 defense budget, and the Senate has approved a 3.6 percent hike. Lawmakers are expected to agree on the larger amount when they meet to merge the two bills.