GAO Answers Pay Benchmark Questions

Though the benchmark index used to calculating military basic pay has its flaws, it is still a useful tool, the Government Accountability Office said. Addressing questions from the chairman and ranking Republican on the Senate Armed Services personnel subcommittee in a June 2 letter, GAO described the benchmark – known as the Employment Cost Index (ECI) – as having “both strengths and weaknesses,” Still, GAO wrote, ECI “is generally reasonable to use to adjust [basic] pay annually.” Though the ECI is flawed in the sense that it does not offer a true comparison between military compensation and some forms of civilian pay, the letter stated, it does calculate civilian labor costs consistently, accurately, and transparently. Further, it remains a useful tool because it only calculates basic pay. “In addition to basic pay, service members also receive allowances, tax advantages, as well as deferred and in-kind compensation,” the letter stated.