The Navy's efforts to deal with a software glitch that led to more than 1,200 of its retirees owing money to the federal government hit another snag recently as slow-moving pay systems created confusion and mixed signals for the impacted veterans.
The problem began last winter when a software issue in a Navy database miscalculated how much time 1,283 veterans had served -- which, in turn, led to them being overpaid.
Although both the Navy's Personnel Command and the Defense Finance and Accounting Service, or DFAS -- the agency that handles pay for the military -- have jumped in to help tackle the problem and pause the repayment process until September, veterans still received statements saying money was being withheld from their retirement pay, leading to confusion and frustration.
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In earlier statements to Military.com, the Navy said that it became aware of the problem in November 2022. Cmdr. Rick Chernitzer, a spokesman for the Navy's Personnel Command, said that the affected sailors would have gotten a notice from DFAS, but the Navy also sent out a letter to all the affected retirees in early April letting them know about the pay change.
Chernitzer told Military.com in an email Thursday that the sea service also asked DFAS to pause collection of the overpaid money for 90 days in an effort to lessen the financial impact of the error and give "sufficient time for retirees to file waiver applications."
Both the Navy and DFAS say the pause was approved. However, Steve Burghardt, a spokesman for DFAS, explained that it wasn't put into that system in time to be reflected in upcoming pay statements.
"When it got approved and then inputted into the retired pay system for each of those individuals, the [Retiree Account Statement] information had already populated," Burghardt told Military.com in a call.
The result was statements that showed money coming out of a veteran's pay when, in fact, it wasn't.
"There was a retired pay offset, which was a negative number, and they were saying, 'Oh my god, they're collecting it already,'" Burghardt said.
"It was a timing issue -- it wasn't an oversight on our part," Burghardt stressed.
Meanwhile, Chernitzer emphasized that retirees who file waivers would get to wait on repaying the debt "until a final determination is made on their waiver application."
The error and resulting confusion come just as the Navy has begun to recover from another spate of issues with pay and paperwork systems, which became widely known last year when Military.com reported that the service was slow to get sailors their discharge paperwork, leading to stress and unnecessary expenses.
Those issues were caused in large part by the Navy's plan to modernize and consolidate how it handles many of the human resources requests that its force of more than 300,000 sailors generates on a daily basis.
Navy officials have stressed that the issue with retiree pay is not connected to this broader effort, though it does come at a time when leaders within the Navy's personnel commands say they are working to rebuild a level of trust with the fleet.
Burghardt said that DFAS employees have gone through all the affected retiree accounts and not only made sure the service data was correct but that all the accounts reflected the suspension of collections.
Editor's note: This story has been corrected to reflect the terms of waiver applications filed by retirees.
-- Konstantin Toropin can be reached at konstantin.toropin@military.com. Follow him on Twitter @ktoropin.
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