New military pay system being readied

by Tom Philpott

Starting in, the Defense Finance and Accounting Service will phase in a new, more reliable and effective pay system for the military.

Called the Forward Compatible Payroll (FCP), it promises far fewer errors, an easy-to-understand Leave and Earnings Statement for service members, and instantaneous adjustments to pay records
FCP “should have a huge impact on our efficiency in providing pay services,” says Sue Schallenberg, director of what DFAS calls its Military Pay Operations Transition Group.

Phase in of FCP will begin with the Army Reserve and National Guard in March, followed by the active duty Army in July, the entire Air Force next November and the Navy Department, with its more complex shipboard environment, in March 2006.

That will mark the end of a problem-plagued pay system developed during the Vietnam War. DFAS officials suggest they’re as inclined as service members to exclaim, “Good riddance.”

The current military payroll scheme, called the Defense Joint Military Pay System (DJMS), actually is two systems, one for active duty and another for reserve component forces. The two are compatible only with enormous effort, say DFAS officials.

The reserve system was designed to pay members for weekend drills and two weeks’ active duty a year. Relying on it to provide accurate and timely pay to a few hundred thousand mobilized reservists has been difficult, requiring frequent manual intervention, which raises the risk of errors.
Indeed, the Government Accountability Office blamed the reserve pay system in part for a plague of pay errors that hit Army Reserve and National Guard members mobilized since 9/11 to guard the nation and fight wars in Afghanistan and Iraq.

GAO studied a sampling of mobilized units and estimated that more than 90 percent of activated soldiers suffered the frustration of significant errors in pay in 2002 and 2003. DFAS and the Army have taken aggressive measures since to ease the errors.

With FCP, permanent relief is on the way.

To spread that word, Schallenberg discussed FCP and the system it will replace in a phone interview.

The current system, DJMS, is written in a programming language developed in the late-1960s. So it is cumbersome, fragile and woefully inadequate to handle recent complex changes to military pay. With DJMS, if Congress approved new pay feature, like Assignment Incentive Pay, it takes on average 12 to 18 months to automate such payments. Some pays, such as medical bonuses, can’t be programmed.

“The workforce within DFAS is actually computing and manually manipulating members’ pay to make sure that they are getting the right pay,” Schallenberg said.

FCP will end the need for 95 percent of current “workarounds” for reserve mobilization and new pays, said Schallenberg, and allow DFAS to shift workforce focus to “prevention rather than after-the-fact corrections.”

The process of moving reservists and National Guard members to activated status, with all appropriate pay and entitlement changes, “will be as simple as making a single change on the record,” she added.

Pay specialists no longer will have to re-enter basic information on tax exemptions, marital status, numbers of dependents, allotments or what financial institutions should receive direct deposits of members’ pay.

“There will be no redundant data entries like we have today,” Schallenberg said.

Also to disappear will be confusing entries on Leave and Earnings Statement, such as the “Save Pay” field where any number of unnamed entitlements might now be listed. Instead, service members will see a full and clear list of entitlements and the amounts paid, allowing them to better understand and manage their paychecks.

The revised LES “will be very specific so they won’t feel like they have to go to another source to translate,” Schallenberg said.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: