Called the Forward Compatible Payroll (FCP), it promises far fewer errors, an easy-to-understand Leave and Earnings Statement, and instantaneous adjustments to pay records

FCP "should have a huge impact on our efficiency in providing pay services," says Sue Schallenberg, director of the Military Pay Operations Transition Group.

The phase-in of FCP will begin with the Army Reserve and National Guard in March, followed by active duty Army in July, the Air Force next November and the Navy Department, with its more complex shipboard environment, in March 2006.

That will mark the end of a problem-plagued pay system developed during the Vietnam War.

The current Defense Joint Military Pay System (DJMS) actually is two systems, one for active duty and another for reserve component forces. The two are compatible only with enormous effort, say DFAS officials.

The reserve system was designed to pay members for weekend drills and two weeks active duty a year.

Relying on it to provide accurate and timely pay to a few hundred thousand mobilized reservists has been difficult, requiring frequent manual intervention which raises the risk of errors.

Indeed, the Government Accountability Office blamed the reserve pay system in part for a plague of pay errors that hit Army Reserve and National Guard members mobilized since 9/11 to guard the nation and fight in Afghanistan and Iraq.

GAO studied a sampling of mobilized units and estimated that more than 90 percent of activated soldiers suffered the frustration of significant errors in pay in 2002 and 2003. DFAS and the Army have taken aggressive measures since to ease the errors.

With FCP, permanent relief is on the way.

Schallenberg in Denver and Sylvia Hanneken, program manager for military pay system transition in Cleveland, discussed FCP and the system it will replace in a phone interview.

The current system is written in a programming language developed in the late-1960s. So it is cumbersome, fragile and woefully inadequate to handle recent complex changes to military pay.

If Congress approved a new pay feature, like Assignment Incentive Pay, it takes on average 12 to 18 months to automate such payments. Some pays, such as medical bonuses, can't be programmed.

"The work force within DFAS is actually computing and manually manipulating members' pay to make sure that they are getting the right pay," said Schallenberg.

The new system will end the need for 95 percent of current "workarounds" for reserve mobilization and new pays, said Schallenberg, and allow DFAS to shift work-force focus to "prevention rather than after-the-fact corrections."

Service members will see a full and clear list of entitlements and the amounts paid, allowing them to better understand and manage their paychecks.

The current software is so old and inflexible that when states change their tax rates, DJMS has to be reprogrammed, which can take 12 to 18 months.

That's why a surprisingly high proportion of service members every year receive corrected W-2s, or Wage and

Earning Statements.

The new program, by contrast, will use existing commercial tax packages that contractors are obligated to keep up-to-date with the latest state tax laws to allow timely recalculations of member tax liabilities.

FCP will restore member confidence in their pay system, particularly among those aware of pay problems suffered by mobilized reservists, said Hanneken.

It will eliminate system challenges that led to operational problems, she added, and ultimately benefit all service members.

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