In recognition of increased retirement costs the bill proposes.

Colonel KECK. In this instance, I am referring to base pay, and we have attempted to make it comparable with other occupations. We, naturally, cannot make it equal. In the case of lieutenant colonels and higher, we have had to go to other Federal officials, because it is impossible for us to compete with outside industry in those areas. I have here a chart showing a comparison of our proposed military basic pay with Foreign Service officer pay. You will note that Foreign Service officers are paid at this level, and the proposed pay shown in red that we propose is well below that (chart 8).

ecognition of added retirement costs in computing these pay we have added one additional factor, and it is called active-duty ents (chart 9). We would have over here a base pay. An acty increment for only these grades lieutenant colonel through general-and the base pay plus the active-duty increment total active-duty pay. This active-duty increment would not slated into retired pay because, customarily, they would go the base pay and the purpose of this is to reduce retired costs.

ACTIVE DUTY INCREMENT

PAY

INCREMENT

1300

1100

850

660

CHART 9

to reduce initial costs increases would be phased in over a period of = for commissioned and warrant officers.

KILDAY. That is the only purpose of it, isn't it, Colonel? onel KECK. Yes, sir, but it varies, however, in amounts, showing ge here, in order to provide some attraction for personnel to stay yond 20 years' service to 30 years' service in these grades.

KILDAY. 0-6 is a colonel, and he would be drawing, while on duty, $100 a month in special pay or allowance, which would carried over into his retirement.

onel KECK. That is correct.

- KILDAY. I believe you state that it is included as an incentive main on active duty.

Colonel KECK. Yes, sir, but without adding to retired costs. Mr. KILDAY. Now, has this been considered: Any retirement pay should bear a proper relationship to active-duty income so as not to have too great an impact on the standard of living of the individual when going from active-duty status to retired status?

Colonel KECK. That is correct.

Mr. KILDAY. So that, when we add here another income while on active duty, which is not carried over into retirement, we are aggravating even the present situation in which there isn't too good a relationship between active-duty income and retired pay.

Colonel KECK. Yes, sir.

Mr. KILDAY. You agree that that would be an aggravation to the extent of $1,200 a year?

Colonel KECK. Yes, sir.

Mr. KILDAY. Or I should say the percentage of $1,200 per year.
Colonel KECK. Yes, sir.

Mr. KILDAY. Why, then, wouldn't that be an incentive to leave active duty for this reason, that the O-6 is as high as he is going to go, unless he should happen to be one of those who are included within the threefourths of 1 percent who can be star officers-generals or admirals-so he is as high as he can go unless he is included within that three-fourths of 1 percent who move into star rank.

Realizing that industry's retirement systems are based on compulsory retirement at age 65, with 20 years of service, so that if he is going to get into industry, he must get into it before he is 45 years of age, why wouldn't it be the wise thing for the man who has come up to colonel, with 20 years of service, to leave the service in order to get himself covered into industry before he has passed the possibility of employment in industry and inclusion in its retirement system?

Colonel KECK. All of our studies indicate, sir, that personnel who retire early, at the 20-year point as contrasted to the 30-year point, do so because of financial hardship. The great majority do. There are always exceptions. These people cannot afford to stay on active duty and still send their children to college, for example.

Mr. KILDAY. Because they can draw 50 percent of base pay and go to work in industry.

Colonel KECK. That is correct, so we feel if we provide them the added monetary money on active duty that they will no longer suffer this financial hardship and therefore will not have to leave the service in order to do this.

Frankly, if they want to become wealthy, the service is no place for them.

Mr. KILDAY. I am surely glad you made that statement, Colonel, because if a person wants to become wealthy, he must get into something other than a career which is based upon what he is able to produce within the hours available within a lifetime. All that any person I don't care whether he is in a profession, politics, public office, private employment, or where he is, can hope to accomplish is to live in dignity, educate his children properly and provide for his old age or disability.

Colonel KECK. Absolutely, sir.

Mr. RIVERS. That is why I don't understand-I should be asking the Secretary this: The Secretary used a word, or words, "changed order of readiness," or some such term as that.