Senators to Pentagon: Don't Mess With Commissary Employees' Compensation

Fifteen Democratic senators are urging the Defense Department to avoid certain changes that could adversely affect the pay and benefits of its commissary employees.

The department has been considering ways to rein in costs associated with the popular commissaries, which provide groceries to military personnel, families and retirees worldwide at significant discount compared to commercial stores. But it’s a sensitive issue because any changes have the potential to hurt patrons or the employees who work at the 245 commissaries around the world.

One idea involves converting employees at the Defense Commissary Agency from General Schedule or Wage Grade status to non-appropriated fund workers. Unlike most federal civil service jobs, the salaries of NAF employees are not paid for with money appropriated by Congress. Instead, the funding is “self-generated” through the operation of daycare centers, golf courses, and other facilities that use NAF-status workers. Because of that, the pay and benefits that NAF workers receive are different from the compensation other federal workers get.

“We understand that under a cost-saving proposal from the Boston Consulting Group, DeCA employees could have their pay slashed by as much as one-quarter, their health insurance costs significantly increased, and could become ineligible for pensions, among other negative consequences,” said the Feb. 25 letter from the senators to Defense Secretary Ash Carter.

The consulting group's September 2015 report proposed a phased, two-year approach for current employees to convert to NAF status with a more nuanced approach toward compensation changes, according to a Feb. 29 Military.com news report.

A separate proposal from the Military Compensation and Retirement Modernization Commission recommended consolidating parts of the military commissary and exchange operations to save money. Military exchanges offer goods and services, similar to a department store or other commercial retailer, at deep discounts to service members and their families. Employees at exchanges have NAF status, meaning their pay comes from profits and not congressionally-appropriated money. The January 2015 MCRMC report concluded that converting the commissary workforce to NAF employees could save the department $110 million in staffing costs.

The fiscal 2016 National Defense Authorization Act required Defense to submit a report on how the commissary benefit could become revenue neutral. “DoD Deputy Chief Management Officer Peter Levine publicly acknowledged during remarks before the American Logistics Association in October of last year that it would be ‘impossible’ for the commissary benefit to continue to be meaningful for military families if DeCA were required to become revenue neutral and that, instead, appropriations for the agency continue to be necessary,” said the senators’ letter.

While the lawmakers encouraged Defense to continue to search for ways to save money within DeCA, perhaps through restructuring, they also cautioned the department to “proceed carefully with any proposal that could harm the commissary benefit, including conversion of DeCA employees to non-appropriated funds employees.”