European Stars and Stripes (Newspaper) - December 31, 1991, Darmstadt, Hesse                                Tuesday december 31, 1991 the stars and stripes a Page 9pay plans Spur voluntary separation army explains advantages of Early action by Janet Howells Tierney Washington Bureau Washington the army has identified soldiers who Are Likely candidates for involuntary separations by sept. 30, 1992, and encourages them to take advantage of the voluntary separation pay plans. Eligible enlisted soldiers and officers with Between six and 20 years of service have until feb. 29 to sign up for either the voluntary separation incentive Vii or the special separation Benefit sub according to message sent out by the army on Christmas eve. The message urges those soldiers who might be later forced to leave the army to act soon to take advantage of either of two plans because if involuntarily separated soldiers will receive less in terms of separation Money. The service must trim about 40,000 people by the end of the fiscal year to reach the size ordered by Congress. The message warns that sometime during 1992, the army intends to further limit the number of years corporals specialists and sergeants can remain on Active duty without being promoted. The limits will apply to All military occupational specialities the message says. Promotable corporals and specialists with More than eight years of service on sept. 30, 1992, will be forced out the message says. Previously corporals and specialists could remain on Active duty up to 13 years without being promoted. Also promotable sergeants with less than 15 years on Active duty As of oct. 1, 1993, will be considered for involuntary separation the message said. Officers who have been passed Over once for promotion Quot should seriously consider Vii sub before lists Are announced which might result in their being twice non selected for promotion Quot the message says. Majors with dates of rank Between july 2, 1989, and March 1,1991, and captains with dates of rank Between May 2, 1985, and sept. 1, 1986, will be considered for involuntary separation by reductions in Force boards in March 1992, the message says. Majors and captains not selected for involuntary discharge by the March Board cannot apply later for the voluntary pay plans the message says. To be eligible for the voluntary pay incentives soldiers must a have served More than six years on Active duty before dec. 5, 1991 Feut have less than 20 years service at time of separation. A have served at least five continuous years on Active duty immediately preceding the Date of separation. A sign a contract to accept an appointment enlistment or Transfer to the ready Reserve. Reserve enlistments must continue for the duration of vs1 payments. Those selecting the sub option have a three year Reserve obligation the message says that soldiers denied re enlistment although fully qualified for retention can apply for the pay plans within 60 Days of their re enlistment denial. Also those who have already been approved for voluntary Early release but ave not yet separated May apply for Vii or sub if they qualify the message says. Other details on eligibility for the voluntary plans Are available from local military personnel offices. Both pay plans use a formula based on annual Basic pay and years of service. The Vii is Worth More but its payments Are made in annual instalments Over a number of years. The sub is a Lump sum. The Pentagon is authorized to Issue Lump sums to those who Are forced out however the voluntary pay plans included in the 1992 defense authorization Bill Are Worth More. The formula for sub is final annual Basic pay times 15 percent times years of service. Under the involuntary separation payment plan the multiplier is 10 percent. The Vii is a yearly payment equal to final annual Basic pay times 2.5 percent times years of service payable for twice the number of years a member served. The sub includes the same benefits package already offered under the involuntary separation pay plan. Those benefits include a extended military medical care for 120 Days after separation a use of military family housing for up to 180 Days after separation a commissary and Exchange benefits for two years after separation a pre separation counselling and relocation and employment assistance. The air Force Navy and marines have not yet detailed payment plans for their separated  offered on management of Early out pay programs by Luke Britt staff writer military people who take the separation Money and run could set themselves up for a walk Down misery Lane according to one financial expert. Then again with proper planning the department of the army s separation pay programs could give serv ice members the proverbial clean slate most people Only dream about said George Nigro a certified financial planner and consultant for the National Center for financial education. Quot first and Foremost a person must assess whether leaving the military is really going to be Best for them in he key concern is that. People Don t squander this Money. It is designed and can be the Means to Start a new life something not. Many people Ever have a Chance to Doit a George Nigro the Long run a Nigro said. A the Lump sum looks Good but the question should be asked a do i question my military pension a want to give up in All but the highest enlisted and officer ranks eligible for separation pay the amount offered under the Early out programs is thousands of dollars less than the Dollar value of a pension for someone who retires after 20 years and lives to be 72 years old according to the armed Force guide to military retirement. A Soldier who does accept the army s Early out offer can take the Cash in two ways a one time Lump sum or annual payments Over two times the number of years in service according to army messages on the programs. Nigra finds Little to Praise about the annual payment option but said a properly managed Lump sum can easily see military families through their transition into civilian life. Nigro suggests a pay off All debts immediately. A people Are walking around with credit card Bills which Cost them 18 or 19 percent interest. They should get rid of that Yoke in one  a establish an emergency fund in a Bank or credit Union equal to six month s pay. A numbers Are showing that gis Are not finding work too quickly in the states. They will need a fund to live  a after finding a Job make a Down payment on a Home. Quot right now House prices Are very Low. This is the single Best use of any Money left Over after debts Are  a any remaining Money can be placed in a College fund for children an individual retirement account government Bonds or Mutual funds Nigro said. Once a family has an income from a new Job some of the emergency fund Money can be moved into one of these options he said. Quot the key concern is that people done to squander this Money a Nigro said. A it is designed and can be the Means to Start a new life a something not Many people Ever have a Chance to  How to spend separation pay staff sgt. Joe Smith is turning in his nine years As a Soldier for $22,283 in separation pay. He is married with two school age children. He has $3,000 in savings owes $10,000 on his car and $4,000 in credit cards and other debts. Here s How one company s financial planners suggest he spend the separation pay and his  pay plus savings $25,283 pay off car 10,000 pay off credit cards 4,000 Down payment on a House 6,000 Belore Holinds a Job remaining funds place remaining funds in credit Union or Market account. 5,283 after he finds a Job remaining funds put three fifths of those remaining funds into an emergency account. 3,000 place what s left in an individual retirement account College fund for children or Mutual funds. 2,283 source financial planners with interest International a amps annual payments Nigro said. But Only if they Are virtually debt free and Nave a Job waiting for them when they turn in the Green id card. While the Stream of income might be Good for peole who have trouble managing their Money it really limits their flexibility Quot Nigro said. For people who tend to spend Quot every Penny they have As soon As they have it they might consider the those Federal pay raises ready to make 92 Bow by Dana priest the Washington Post Washington a most Federal employees will ring in the new year with larger paychecks a 4.2 percent larger in most cases. The Day after Christmas president Bush did the right thing by Federal workers and signed the executive order putting into effect pay raises for judges doctors administrators secretaries and just about everyone else on the Federal payroll. According to the office of personnel management an estimated 1.5 million Federal employees will receive the 4.2 percent increase which is based on the employment Cost Index the average increase in labor costs across the country. Under the pay Reform package passed by Congress last year 160,000 other employees those whose salaries Are particularly out of whack with the local labor Market in expensive cities will receive an 8 percent increase. Included in this group Are workers in the new York san fran Cisco and los Angeles areas. Under the same pay Reform Bill beginning in 1994, Federal employees will get an annual increase based on the eci minus 0.5 percent and some will also receive pay adjustments based on comparative labor costs in their local areas. According to the pay charts released last week a new employee starting on the lowest rung of the general schedule in 1992 a gs-1, step 1 a would earn $11,478 a year. An employee on the highest end of the executive schedule will earn $143,000. The vice president will make the same As the chief Justice $166,200. Associate justices of the supreme court will make $159,000 and circuit court judges $137,000. Members of Congress and District court judges will pull in the same annual salary $129,500. While the president signed off on All of the raises he is not allowed to approve one for himself. In 1992, Bush will make $200,000, As he did this year