on active duty for 4 years in addition to any other period of obligated active service. The legislative proposal recommended by the Defense Department was not recevied by the Senate until June 9, 1975. This allowed inadequate time for the committee to fully consider this proposal. However, the naval officers who are affected by this legislation perform some of the most vital and important jobs in the entire Defense Department. These jobs are involved with the operation of our ballistic missile submarines, our nuclear attack submarines and the nuclear surface ship fleet. The committee does not believe pay for these personnel should be held up while new pay proposals are considered. The Defense Department proposed legislation would have created an entirely new system of incentive pay for these officers. Preliminary investigation revealed little evidence that the proposed system would insure the retention of sufficient nuclear-qualified officers. In addition, the proposed system would have institutionalized a permanent system of general incentive pay, rather than the more flexible and controllable system of special pay aimed at specific problems. It is not clear how this proposed system would relate to the overall review of military pay now underway in thhe Defense Department. In light of these considerations, the committee recommends a 2-year extension of the current pay system while other approaches are developed and considered. PRIOR LEGISLATION ON SPECIAL PAY FOR NAVY NUCLEAR TRAINED OFFICERS During 1963-64, the officer input to naval nuclear propulsion training was more than doubled due to rapid expansion of the nuclear submarine fleet. In 1969, many of these officers, having reached the end of their minimum obligated service, chose to leave active duty service. The Navy found the remaining officers insufficient in number to man certain nuclear department head positions on submarines. To slow the loss of nuclear officers, in 1969 Congress enacted Public Law 91-20 authorizing Nuclear Submarine Officer Continuation Pav. This pay was a $15,000 bonus over one 4-year commitment which could begin after the initial service obligation and before completing 10 years of commissioned service. Authority for this program was to expire in 1973. This bonus pay succeeded in slowing the resignation rate for nuclear submarine officers. In Public Law 92-581 in 1972, Congress extended the authority to grant the bonus to submarine nuclear officers until June 30, 1975. This law also expanded the nuclear officer bonus to the surface nuclear fleet. The authority to grant this bonus to officers not currently receiving it expired June 30, 1975. FISCAL DATA Funds for the special pay authorized by this bill are included in the fiscal year 1976 budget. The Department of Defense estimates that $1.7 million is included for this purpose. S.R. 329 DEPARTMENTAL REPORT DEPARTMENT OF THE NAVY, Hon. NELSON A. ROCKEFELLER, OFFICE OF THE SECRETARY, Washington, D.C., June 6, 1975. DEAR MR. PRESIDENT: There is forwarded herewith a draft of proposed legislation to amend title 37, United States Code, relating to special pay for nuclear qualified officers, and for other purposes. This proposal is a part of the Department of Defense Legislative Program for the 94th Congress. The Office of Management and Budget advises that, from the standpoint of the Administration's program, there is no objection to the presentation of this proposal for the consideration of the Congress. The Department of the Navy has been designated as the representative of the Department of Defense for this legislation. It is recommended that this proposal be enacted by the Congress. PURPOSE OF THE LEGISLATION The purpose of the legislation is to provide a permanent career incentive pay for naval officers trained and qualified for duty in connection with the supervision, operation, and niaintenance of naval nuclear propulsion plants. Adoption of a meaningful career incentive pay is necessary to insure the retention of sufficient qualified officer personnel to meet present and future manning requirements of the nuclear powered ships of the Navy. This incentive pay would replace the current temporary expedient of a $15,000 bonus for junior nuclear qualified officers who contractually agree to remain on active duty for one period of four years beyond completion of the mininum obligated service. Less than 5 percent of all naval officers on active duty are trained and qualified for duty in connection with the supervision, operation, and maintenance of naval nuclear propulsion plants. The direct operational expertise and benefit of excellent Navy nuclear training which these some 2,500 officers possess make them highly desirable as employment prospects for the greatly expanding civilian nuclear power industry. During its early years, the Naval Nuclear Propulsion Program was very small and could rely on an adequate annual input of proven career dedicated officer volunteers with some years of previous experience in the conventional submarine or surface forces. The rapid expansion of the program incident to construction of the 41 ship Polaris fleet resulted in a direct input of relatively large numbers of qualified newly commissioned ensigns into the program and since 1961, this has been the primary source of officer input. It should be noted, however, that the desired input goals for newly commissioned ensigns have never been met, and the consecutive annual input short falls have caused a serious restriction in sea-shore rotation opportunity for nuclear trained officers. S.R. 329 Simultaneously, the retention rate of these "direct-input" ensigns has been totally inadequate to meet the need for experienced officers in the expanding Naval Nuclear Propulsion Program. In July 1969 the Congress acted to grant a necessary Nuclear Submarine Officer Continuation Pay in the form of a $15,000 bonus for each junior nuclear qualified submarine officer who executed a written contract to remain on active duty beyond minimum obligated service for four years in support of the nuclear submarine service. In October 1972 the Congress again acted to extend the continuation pay concept to junior nuclear qualified officers who served beyond minimum obligated service in support of the aircraft carriers, cruisers, and frigates of the nuclear powered surface fleet. In both cases, the implementation of this special pay program significantly improved the temporary retention of junior nuclear qualified officers through the completion of their department head tour of duty at the ninth or tenth year of commissioned service. These special continuation pays-in reality short-term officer retention bonuses-were enacted by the Congress as temporary stop-gap measures. The Senate and House Armed Services Committee reports on the original 1969 bill firmly document the rationale that the "bonus" solution to the nuclear officer manning problem in Navy was considered a temporary expedient and enacted as such. Navy has applied continuing efforts to improve the career attractiveness for nuclear qualified officers, including the temporary promotions to the grade of lieutenant commander for officers serving in the position of engineer officer on nuclear powered ships, reductions in the operating tempo of nuclear powered ships and increased recognition of the contributions of these officers to the operational readiness of the Navy. However, these efforts coupled with the temporary bonus expedient have not retained the required number of officers. Middle grade nuclear qualified officers once retained by the existing special bonus pay are now leaving the naval service at the completion of the agreed-upon four year period, and in unacceptable numbers. Better than 30 percent of the officers who have just completed their bonus obligation at the nine year service point have resigned. In addition, the present bonus and its concomitant four year obligation have become substantially less attractive to junior officers who are just now completing their minimum obligated service; only 27 percent of the most recently eligible officers have opted for the bonus although they have had the opportunity to do so since June of 1974. Civilian nuclear industry offers both the junior and "post bonus" officer an increase in compensation for similar work at a less demanding and non-seagoing pace. For the post bonus officer, the civilian pay alternative is particularly attractive since it makes up a forced reduction in pay caused by loss of bonus payments and a possible concurrent loss of submarine pay. This problem of "post bonus" losses has become serious in view of the expanding need for capable exexcutive officers and commanding officers in the nuclear fleet. The large number of post bonus resignations is undoubtedly reflected back to the junior officers as evidenced by their increasing reluctance to accept the bonus obligation. Even under the current economic climate, civilian nuclear industry requirements for trained nuclear power managers, engineers, and operators are most significant. A recent survey conducted of all nuclear trained officers who have resigned within the last three years showed that 67 percent are currently employed by civilian nuclear industry S.R. 329 with a rising trend to 79 percent nuclear industry employment by resignees in the last year. A strong secondary reason for new Congressional action is the urgent necessity to improve the accession rate of qualified officers into the nuclear propulsion training program. Consistently inadequate annual input has caused an unreasonable demand to be placed upon the limited number of officers who do volunteer--the feedback from this further limits the annual input. A true and meaningful career incentive pay which compensates for the special demands of the program is vitally needed. The requirements of the Navy Nuclear Propulsion Program for qualified officers are not unrealistically large— 550 per year to enter nuclear propulsion training (This goal has never been achieved, resulting in a significant increase in the required retention rate among junior officers reaching the end of their obligated service.), 150 per year retained beyond minimum obligated service, 70 per year to command. It is therefore proposed that the temporary and sharply focused Nuclear Officer Continuation Pay ($15,000 bonus) system now be replaced with a meaningful and permanently established Nuclear Career Incentive Pay. The proposed new incentive pay system is structured after the recently enacted Aviation Career Incentive Pay, with minor modifications as necessary for adjustment between dissimilarities in the two career patterns. The rate of pay should be based on length of service as a commissioned officer, but for warrant officers is a flat rate, slightly higher than they had received as proficiency pay while in enlisted status as nuclear propulsion plant operators. These proposed rates of incentive pay will provide the nuclear trained officer the required degree of economic indifference to the salary offers of civilian industry after he completes minimum obligated service and for the remainder of his career. In this regard, officers with six to eight years service experience who have resigned within the last three years have a median salary with nuclear industry of nearly $20,000 as compared to a regular military compensation for these officers without incentive pay of $17,950 and with the proposed incentive pay of $20,890. Entitlement to the proposed Nuclear Career Incentive Pay would vest only in nuclear trained commissioned and warrant officers who maintain their qualification and technical proficiency for duty in connection with the supervision, operation, and maintenance of naval nuclear propulsion plants or those in nuclear training that directly leads to such qualification under the existing strict ERDA regulations and controls. The proposed rates of Nuclear Career Incentive Pay are: Years of service as commissioned officer other than warrant officers: 4 or less.. Over 4. Over 5.. Over 18. Over 20. Over 22. Over 24 Over 25. Warrant officers-. Monthly incentive pay $100 150 245 225 205 185 165 0 200 S.R. 329 The proposal provides that the career incentive pay would be paid to qualified officers not restricted in the performance of duty without regard to their duty assignment during their first ten years of commissioned service. However, if at the end of, or at any time subsequent to, the tenth year of commissioned service, such an officer has been in an assignment for more than three consecutive years which does not involve the supervision, operation, or maintenance of naval nuclear propulsion plants, his entitlement to the career incentive pay is terminated until such time as he again is assigned to such nuclear duty and maintains his qualifications. The termination provisions would not apply to those nuclear qualified officers assigned to required periods. of instruction or required qualifying shipboard tours of duty to prepare for assignment to a position of increased responsibility on a nuclear powered vessel. This provision assures that only officers who serve a significant portion of their career in nuclear powered ships receive this incentive pay on a continuous basis and also assures the individual officer of relative financial stability over his career. Incentive systems that offer higher rates of pay to these officers only while serving in nuclear billets have been considered; however, these systems result in considerable financial instability to the individual officer. Officers ordered ashore to important duties outside of the nuclear power field would face a forced reduction in pay of the same magnitude that the current post bonus officer is experiencing; that abrupt reduction is a major contributor to the 30% resignation rate of those officers. The pay differential over the period of a naval career for nuclear trained officers provided by this incentive pay recognizes the value of these officers to the Navy. The cost of this special pay over the career of each nuclear trained officer retained under this proposal will be substantially less than the cost of training the required junior officers for replacement of the middle grade nuclear trained officer. In addition, in view of the consistent inability to meet the current accession goals, it is unlikely that further increased accessions could be met to make up for decreased middle grade officers retention. The total annual cost of this incentive pay proposal is very modest when compared to the capital investment involved in just one of the more than one hundred nuclear powered ships that are the responsibility of these officers to maintain and operate. Implementation of the Nuclear Career Incentive Pay should preserve the option for junior officers currently on active duty to alternately elect to receive the Nuclear Officer Continuation Pay ($15,000) bonus) during the four year period immediately following their completion of minimum obligated service. Although the proposed nuclear incentive pay does provide a higher remuneration over a full career, it represents a short term reduction from the bonus equivalent of $312.50 per month during this critical four-year period. Accordingly, implementation of the Nuclear Career Incentive Pay Proposal without the save-pay altenative would be recognized as a reduction in entitlement for officers just completing minimum obligated service, who have not received Nuclear Career Incentive Pay up to this point. S.R. 329 |