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MCCareer.org – 2015 in Review

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Happy New Year to all MCCareer.org users.  In 6 months, we got 11,000 views.  If you’d like to see the statistics, top posts, top commenters, and other similar things, see below.  Thanks for making this blog an impactful and valuable resource.

The WordPress.com stats helper monkeys prepared a 2015 annual report for this blog.

Here’s an excerpt:

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 11,000 times in 2015. If it were a concert at Sydney Opera House, it would take about 4 sold-out performances for that many people to see it.

Click here to see the complete report.

Highlights of BUMED Specialty Leader Business Meeting

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I was recently selected to be the Emergency Medicine Specialty Leader, and earlier this week I attended the BUMED Business Meeting for Specialty Leaders and Program Directors.  Below are the highlights I thought were of interest to a general Medical Corps audience:

  1. BUPERS is removing the AZ (above zone) and IZ (in zone) stamps on the Officer Summary Records (OSR) for all promotion boards starting with the upcoming FY17 promotion boards.  Some feel that when officers are labelled “AZ” that board members assume that something must be wrong with them since they failed to select previously.  This is being done to reduce the chance of that bias (if it even really exists).  Obviously if you have been passed over for promotion and you have a ton of FITREPs at your current rank or the board members closely scrutinize your date of rank on the OSR, they will be able to figure out pretty easily that you are AZ, but without the stamp it will make it harder for them to do so.
  2. There is a POSSIBILITY that they change the promotions in the future so that the top 10% of officers selected for promotion get to put the new rank on first.  Currently the order your promote is based on your lineal number and seniority.  In other words, the officers who have been passed over most get to put the new rank on first.  They MAY switch to a system where merit determines who promotes sooner rather than seniority.
  3. DMHRSi is something that very few Medical Corps officers like, but you should realize that the data you put into it is clearly used by BUMED to make decisions that impact manning and measure your productivity.  You should do what you can to correctly reflect your workload in DMHRSi.
  4. The rollout of the new electronic medical record is slated to begin in the Pacific northwest in 2016, but it MIGHT be pushed to the right into 2017.  The total rollout is scheduled over a 5 year period.
  5. The career intermission program is being expanded.  You can use it to take up to 3 years off, essentially hitting the pause button on your career.  You retain 1/15th of your basic pay and your benefits, like TRICARE, and will owe a 2 for 1 time to the Navy upon your return.  For example, if you take 2 years off, you’ll owe 4 years when you return to active duty.  When you return, your lineal number and promotion cycle is reset so that you don’t lose any time and you jump back into a year group that you can compete with for promotion.  There is info on the program here, OPNAV 1330.2B – Navy Career Intermission Program Guidelines or at this website.
  6. The conference approval process is arduous and painful, but it MIGHT be getting easier.  For now it will remain the same and require multiple forms.  If you are going to something that is a “course” and not a “conference” then your Specialty Leader can see if BUMED legal will exempt the course from the approval process.  The POC in that office says that courses have been exempted successfully, and once they are exempted then all officers can use that exemption if their command is willing to pay for the course.  Here is the conference approval webpage.  You should always check here for the latest information.

4th Step to Financial Freedom – Contribute Maximally to Your Tax-Favored Retirement Accounts

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The benefits of tax-favored retirement plans like the Thrift Savings Plan or an Individual Retirement Account (IRA) are too great to ignore, and over the span of your career sheltering your investment earnings from the taxman will benefit you tremendously.  For example, assume that you make a $4,000 annual contribution for 45 years and earn an 8% annual return.  Here is how much you would have if you invested in a taxable investment account versus a tax-deferred account:

  • Taxable investment total – $604,407
  • Tax-deferred investment total – $1,669,670

As you can see, the power of keeping your investment returns and not paying taxes on them can lead to huge differences in the amount of investment growth you will experience.

The primary tax-favored investment account that is available to us is the Thrift Savings Plan (TSP).  If possible, you should always contribute the maximum amount each year, which is $18,000/year in 2015 and 2016 ($24,000/year if you are over 50).  You may be able to contribute more if you are deployed in a combat zone.  See this TSP Annual Limit on Elective Deferrals PDF to read about the details.

After you fill your TSP, open an IRA and, again, contribute the maximum amount each year.  The contribution limits for 2015 and 2016 are $5,500/year ($6,500/year if you are over 50).

For both the TSP and IRA you’ll face the decision of whether to contribute to a Roth or traditional version.  Roth contributions are taxed now, meaning you make after tax contributions and future withdrawals are tax free.  Traditional contributions are taxed when you withdraw, meaning you make pre-tax contributions now and pay taxes later.  For younger or military people, the Roth is usually more advantageous because your tax rate is lower than it will be in the future, but there are many on-line calculators to help you decide which option is best for you, including:

https://www.tsp.gov/PlanningTools/Calculators/contributionComparison.html

http://www.bankrate.com/calculators/retirement/roth-traditional-ira-calculator.aspx

Here is a great comparison chart from Vanguard:

https://investor.vanguard.com/ira/roth-vs-traditional-ira

The Roth IRA does require an adjusted gross income of less than $117,000/year (single) or $184,000/year (married) in 2016 to fully contribute, but there is a way around this called a “backdoor” Roth IRA.  For a tutorial on how to do this, go to:

http://whitecoatinvestor.com/backdoor-roth-ira-tutorial/

If you moonlight as an independent contractor (you’ll know because you will be paid with a Form 1099), you will have other tax-favored options available to you, including a SEP-IRA or Solo 401k.  In these accounts you can often contribute a lot more money.  For a full discussion of them see:

http://whitecoatinvestor.com/sep-ira-vs-solo-401k/

The bottom line is that to maximize your net worth you need to maximize your contributions to all tax-favored retirement accounts you have available to you.  Hiding your investment earnings from the taxman will allow you to accumulate a lot more for retirement.

 

3rd Step to Financial Freedom – Debt Management

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“Annual income, twenty pounds; annual expenditure, nineteen pounds; result, happiness. Annual income, twenty pounds; annual expenditure, twenty-one pounds; result, misery.” – Wilkins Micawber in David Copperfield

 

Debt has a bad reputation. It is prevalent, no one wants it, and everyone who has it wants to get rid of it. Everyone wants to be debt free.

There is, however, another way to look at debt. Debt is a financial tool to meet your personal and financial goals. For example, according to the Association of American Medical Colleges the median level of medical student debt was $180,000 in 2014. While we’d all agree that this level of debt is high, when necessary it has allowed most of us to meet our personal goal of becoming a physician.

 

Dealing with Debt Wisely

Banks and financial institutions see physicians as low-risk and are willing to loan us a lot of money, which can be good or bad. You can probably get a loan to buy a $100,000 luxury car, and while this might be fun, it is probably not wise. The same thing goes for a jumbo mortgage.

Every time you are considering a loan, you should ask yourself if what you are about to purchase is worth it. Will that fancy car or extra large house truly bring you happiness? Or does it just bring a ton of overhead, increased expenses, and four extra rooms you’ll need to buy furniture for.

The book The Millionaire Next Door by Stanley and Danko was a longitudinal study of millionaires. This study showed that most millionaires don’t drive expensive cars. In fact, most drive “normal” cars or buy them used. In addition, most don’t live in large houses in expensive neighborhoods. Their study showed that physicians are notorious for buying these items to live up to society’s expectations. Doctors are supposed to drive luxury cars and live in expensive neighborhoods, right? This is also why they found that physicians under accumulate wealth and have much a lower net worth than their income would predict.

Do yourself a favor and buy a smaller house, drive a less expensive car, and avoid a boat. You don’t want to own the boat, you want to be best friends with the owner of the boat. Skip the vacation home. You can probably rent an equivalent home for much less than it would cost to buy it, and in 2013 the Nobel Prize in Economics was given to Robert J. Shiller, who showed that housing prices barely outpace inflation over the long haul, making real estate a less attractive investment.

While the ultimate goal is to get to the point where you can pay cash for cars and other major purchases, you will likely take out loans for some period of time when a major need arises. Here are some financial rules of thumb to keep you from getting in debt beyond what you can handle:

  • Monthly debt payments (excluding your mortgage) should be <20% of your monthly income.
  • Your housing costs should be <30% of your income.

No matter what debt you accumulate, make sure you always make your payments on time. The #1 factor that goes into calculating your credit score is your ability to make timely payments on your debt, and your credit score will determine the interest rate you are charged on nearly every loan you ever take. One late $50 payment could cost you thousands of dollars on a mortgage, for example.

 

Credit Cards

“Keeping a balance on your credit card is about the worst financial move you can make.” – Burton G. Malkiel, Chair of Economics, Princeton University, Author of A Random Walk Down Wall Street

The quote above says it all. If you are going to use a credit card for the convenience, always pay off the entire balance every month because the interest rates they charge can be very high. If you can’t control your credit card debt, cut them up, cancel them, or only have one that you use in special circumstances. If you have to keep credit card debt, make sure you ask your credit card company to lower the rate or transfer the debt to a low rate card. Check credit.com, cardtrak.com, or lowcards.com for a list of low rate cards.

 

Good Debt?

In addition to helping you achieve financial goals that are important to you, debt can be used to limit the amount of your own investments that must be in cash equivalents. Having easy access to credit can provide a nice backstop in case of a sudden need for cash.

If you have equity in your home, a home equity line of credit can serve this purpose. Their interest rates are usually low and the interest is often tax deductible, further lowering the cost of borrowing. Home equity lines of credit (and other lines of credit as well) should be set up in advance, not after you or your spouse/partner loses their job and you are a credit risk. Beware of fees your lender may charge and see if you can find one that will waive them for a slightly higher interest rate. A slightly higher interest rate isn’t that big of a deal as you hope to never use this line of credit anyway.

 

Student Loans

Despite the HPSP program and USUHS, many readers will have significant student loans. Since I never had student loans, I will admit that this is a weak area in my financial knowledge. By far the best source for information on student loans, paying them off, getting them forgiven, and refinancing them is The White Coat Investor. I would STRONGLY ENCOURAGE anyone, especially those with student loans, to check out this resource. It is unparalleled and the most useful financial site for physicians on the web.

Probably the most important step that residents can take to pay off their student loans is to avoid jumping straight into the “doctor lifestyle” as soon as they graduate residency. If you continue to live like a resident until your student loans are paid off, it shouldn’t take more than a few years to get rid of them, after which you can splurge a little and enjoy your income free of student loans. This is easy to type and hard to do, but just a few years of “roughing it” can wipe out your student loans.

 

Paying Off Debt

When you pay off debt, you are earning an after-tax return equivalent to the interest rate you are being charged. For example, if you pay off credit card debt with an 18% interest rate, this is the equivalent of earning a guaranteed 18% return on your investment tax-free. With the long-term rate of return for the stock market averaging just under 10%, you can see that paying off high-rate debt is often a better move than investing in the stock market. In other words, it makes no sense to pay the minimum on high-interest debt like credit cards while investing in the stock market. Pay off your high interest debt first.

The one exception to this is if you get an employer match on your retirement account contributions. If you get a 50% match, that is an immediate 50% return on your investment, so contribute to your retirement account up to the maximum that your employer matches, then pay off high interest debt. Unfortunately, military physicians don’t get any match right now.

If you have multiple loans, pay off the one with the highest interest rate first. In addition, see if you can stretch out the payments for your low interest loans over a longer period of time, lowering your monthly payments and freeing up cash to pay off your higher interest debts faster. For example, if you have credit card debt with a 14% interest rate, a car loan with an 8% rate, and a mortgage with a 5% rate, pay off the credit card first, then the car loan, and then the mortgage.

Keep in mind that it often doesn’t make sense to pay off debt when the interest rate is lower than the after-tax rate you could earn on an investment. If you want a number, I would pay off high-interest debt (rates greater than 6-8%) such as credit cards, car loans, and private educational loans. If the rate is less than 6%, as with most mortgages nowadays, it probably makes more sense to invest the money in mutual funds and pay off the debt as slowly as possible.

Another move to consider is to take out a home equity loan to pay off high interest debt. You get a lump sum with a fixed interest rate that is often lower than your current debt and pay it off over 5-15 years. In most cases the interest you pay is tax deductible. Keep in mind that you could lose your house if you default on this type of loan, and beware of any up front fees that you need to factor into your calculations.

 

Conclusion

Don’t wait until a crisis hits (divorce, job loss, disability, or a lawsuit) to get your debt in order. If you have major problems with debt and need help, seek a fee-only financial planner with experience with high-income individuals who can help you restructure and manage your debt.

Updated List of Service Schools – MedXellence and MHS Capstone Added

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There are 2 new service schools, MedXellence and MHS Capstone.  If you want these added to your record, check the updated promo prep document below for the procedure:

Joel Schofer’s Promo Prep Guidance – 23 SEP 2015

Service Schools (Medical Only)

The Top 5 Critical FITREP Mistakes

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When I was a Detailer, I would review a lot of records for people who failed to promote. Over and over again I would see FITREPs that reflected poorly on the officer. A lot of the time they didn’t realize it was even an issue, and sometimes they did it to themselves. Here are the top 5 FITREP mistakes you want to make sure you don’t make:

  1. Getting anything other than an early promote (EP) when you are getting a 1/1 FITREP, also known as an “air bubble.”

If you are the only officer in your competitive category (meaning that you aren’t competing against anyone on that FITREP), make sure you get an EP. Just like a single air bubble, you should “rise to the top” and get an EP. If you don’t get the air bubble and get a promotable (P) or must promote (MP), it reflects poorly on you unless it is CLEARLY EXPLAINED in the narrative why you are getting a P or MP. Here you can see an officer who got a 1/1 MP in his/her last FITREP and how it would be noted at a promotion board:

Air Bubble

For example, if your reporting senior doesn’t give newly promoted officers an EP, your narrative should say something like, “Newly promoted officers do not receive EP rankings.” Sometimes this happens because your reporting senior is an officer from another service and he/she doesn’t understand the “Navy rules” for FITREPs. Sometimes it happens because either you or your reporting senior wants to give you a P or MP so you can “show progression” and get an EP. If you want to show progression, do it on the overall marks, not the final promotion recommendation. For example, give yourself a 4.0 EP, then a 4.17 EP, and finally a 4.33 EP. DO NOT give yourself a P or MP if you are getting a 1/1 FITREP.

  1. Both officers in a competitive group of 2 getting a MP FITREP.

If you are in a competitive group of 2, your reporting senior should give 1 of you an EP and the other a MP. If he/she gives you both a MP, it reflects poorly on both of you. Most often this will happen at an operational command and/or when there are 2 officers who are competing but are in the same promotion year group. Make sure your reporting senior doesn’t take the easy road and give you both a MP. One of you should get the EP, and the other can get a MP with a strong narrative explaining why.

  1. Declining from an EP to an MP without changing competitive groups (or “moving to the left”).

Most often I would see this when a resident who was in a large competitive group was given an EP FITREP. Then when they graduate from residency, their competitive group shrinks and they don’t get an EP but are left with an MP. Here’s what it looks like on when projected at the promotion board:

Moving to Left

If I was you, I’d fight this like a dog. If they can’t keep you at an EP and you didn’t do anything wrong to deserve this, make sure the reason for your drop from an EP to a MP is clearly explained in the FITREP narrative.

If this happens to you because you are changing competitive groups, like when you get promoted or move from residency/fellowship to a staff physician at the same institution, it is not a black mark in any way and is expected.

  1. Not getting a 5.0 in Leadership.

If you are writing your own FITREP, you can’t give yourself a 5.0 in every category, but of all the categories Leadership is probably the most important one. Make sure you give yourself a 5.0 in Leadership because that is what the promotion board is looking to promote, future leaders. Having less than a 5.0 can send a bad message to the board.

Sometimes you have no control over this, and sometimes you may deserve less than a 5.0 in Leadership, but do your best to get a 5.0 there if at all possible.

  1. Giving yourself an overall trait average less than your reporting senior’s average.

Every reporting senior has an overall trait average for each rank that includes all of the FITREPs that they’ve done for that rank. You want to try and find out what it is.

While a reporting senior can look up their average on BOL, you can’t. You can, though, see it on your Performance Summary Record if you’ve received a FITREP from them at your current rank. Although it changes every time they do more FITREPs, their average the last time they did a round of FITREPs can be found on your PSR and is highlighted below by the red arrow with blue text (this reporting senior had ranked 6 LCDRs and had an average of 3.50 at that time) on one of the slides from my FITREP video podcast:

Average

If you have never received a FITREP from your reporting senior at your current rank, maybe your one of your friends has. The other way to find out their average is to ask your chain-of-command. Someone, usually the command’s FITREP coordinator, will know their average for your rank.

It is probably obvious that once you find out their average, you’d like to make sure you are above it. Sometimes there is nothing you can do to be above it because you are getting a P and/or you deserve to be below it, but make sure you don’t rank yourself below it if given the chance to write your own FITREP.

In summary, those are the top 5 FITREP mistakes I often see. If you are interested in learning more, grab a copy of your FITREP and watch this video podcast. In 45 minutes you’ll know everything you need to know to write effective FITREPs.

Senior Operational Opportunities for Summer 2016

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Here are some new opportunities.  If you are interested, contact your Detailer:

1. CTF 76 Surgeon – Medical representative to admiral’s staff currently located at White Beach, Okinawa. The medical staff includes a Medical Planner (O-4 Billet), a Task Force IDC (E-8 Billet) and a Medical Inspector (E-7 IDC based in Sasebo). Responsibilities include being ISIC for the ships within CTF 76. There are 9 total (1 LHD, 1 LPD, 2 LSDs, and 4 MCMs based in Sasebo and 1 LCC in Yokosuka). CTF 76 Surgeon is Medical OPCON to all amphibious ships transiting through the 7th Fleet AOR and aid in any MEDEVAC issues that develop while ships are transiting the AOR. The CTF 76 Surgeon is responsible for monitoring the ships’ Medical Readiness and acting as clinical supervisor for the SMOs, GMOs and IDCs. CTF 76 Surgeon has a significant role in the planning and execution of the medical aspects for wartime contingencies, Pacific theater exercises, and in the event of natural disaster, the planning and execution of the medical portion of HA/DR.

2. OIC FST-7 – FST 7 is a 16 member surgical team that deploys aboard USS BONHOMME RICHARD (BHR). The team consists of 1 Surgeon, 1 Nurse Anesthetist, 1 OR nurse, 1 ICU Nurse, 1 Family Practitioner, 1 MRCO (Medical Regulating Control Officer) and 9 Corpsmen. The OIC is responsible for the credentialing, evaluations, fitness reports and training of team members. When not underway on the ship, FST 7 is ADDU to USNH Okinawa in order to maintain their skills and proficiency in their areas of expertise. There is usually a Spring Patrol (~2 months), a Fall Patrol (~3 months) and every other year a Summer deployment to Australia. This year the Summer deployment will role into the Fall Patrol with a number very exciting port visits in between. FST7 provides emergent and resuscitative surgery for Surgical Emergencies (i.e. Acute Abdomen, Trauma, etc). With FST7 aboard, BHR acts as a Level 2 trauma center and provides ICU care and stabilization for medical as well as surgical cases.

3. CPR11 Surgeon – COMPHIBRON11 is the afloat Amphibious Ready Group Commander usually embarked on the BHR. The CPR11 Surgeon is the Senior Medical authority afloat for all ships OPCON to CPR11 as well as the embarked Marine Forces (usually 31st MEU). While aboard the BHR, CPR11 Surgeon attends operations and
intelligence briefs, and provides daily updates to the COMMODORE and MEU COMMANDER on the medical status within the ARG. The FST is TAD to the BHR and reports directly to the Ship’s SMO who in turn reports to the CPR 11 Surgeon. Often while underway the CPR11 Surgeon provides medical advice for the junior GMOs and IDCs aboard the ships within the ARG. The CPR11 Surgeon with the MRCO coordinates all MEDEVACs from ARG Shipping. CPR11 has a busy deployment schedule and participates in many 7th Fleet exercises to include PHIBLEX (Philippines), COBRA GOLD (Thailand) and Talisman Saber (Australia).

 

FY16 Special Pays NAVADMIN Released

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Per the BUMED Special Pays website (http://www.med.navy.mil/bumed/Special_Pay/Pages/default.aspx):

8 Sep 2015:  The FY16 Medical Special Pays NAVADMIN 212/15 has been released.  FY16 Special Pay requests can now be submitted in accordance with OPNAVINST 7220.16.  Submit requests no earlier than 60 days prior to, and no later than 30 days after the effective date.   Send ALL requests and questions to the email address listed below.

usn.ncr.bumedfchva.mbx.specialpays-bumed@mail.mil

Templates for submission can be found here, although your Special Pays person in PSD usually can do this for you:

http://www.med.navy.mil/bumed/Special_Pay/Pages/SpecialPaysTemplatesforSubmission.aspx

Here is the NAVADMIN.  If I’m interpreting it correctly, all amounts remain the same from FY15 and can be found here, FY15 MC-DC Special Pay Implementation Guidance.

O5/O6 Leadership Opportunities for Summer 2016

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Below are multiple opportunities for CDRs and CAPTs.  The POC for anyone interested in any of these opportunities is your Detailer:

  • Multiple USMC leadership opportunities are available in summer 2016.  Requirements include at least 1 prior successful FMF tour (FMFWO preferred), a track record of successful leadership roles, and no recent BCA/PFA failures (currently meets USMC fitness/uniform standards).  Interested officers need to be eligible to PCS in Summer 2016.  Anyone interested should send their CV and military bio to their Detailer by COB September 2nd:
USMC Medical Corps Leadership
Billet Date of Position Turnover
HQMC Health Services
Deputy Director Health Services, HQMC Jul 2016
Director of Clinical Programs Jul 2016
Director of Public Health Jul 2016
II Marine Expeditionary Force
2d MLG Surgeon Jul 2016
2d Marine Division Surgeon Jul 2016
I Marine Expeditionary Force
I MEF Surgeon Jul 2016
1st Mar Division Surgeon Jul 2016
3d Marine Air Wing Surgeon Jan 2016
III Marine Expeditionary Force
3rd Marine Division Surgeon Jul 2016
1st Marine Aircraft Wing Surgeon Jul 2016
  • The Director, Defense Health Agency (DHA) requests Service nominations to fill the 0-6 level position of Chief of Staff, Fort Belvoir Community Hospital (FBCH).  The position resides in the National Capital Region Medical Directorate (NCR MD) and the officer reports to the Director, FBCH.  The duty station is Fort Belvoir, VA.  The selected officer should plan to arrive in July 2016.  Selected individual is expected to serve in the position for a minimum of 2 years from date of arrival at the DHA NCR MD.  Anyone interested should send their CV and military bio to their Detailer by COB September 14th.

Sailor of 2025 Talent Management Initiatives

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There are some exciting and interesting initiatives underway to modernize the Navy’s personnel system.  There have been many articles on this in Navy Times.  Here is one article recently released by the Military Officers Association of America.

In addition, here are some slides that describe this initiative:

PERS-4 Fleet Engagement

The changes that physicians should be aware of, some already finalized and others representing potential changes, are:

  1. Pay and bonus changes that would reward individual talent rather than treat everyone the same.
  2. A removal of promotion zones.  No longer would records be stamped as below-zone, in-zone, or above-zone during promotion boards.  This would switch to a system that rewards talent and milestones rather than longevity.  It would allow those that progress faster to promote faster and no longer have to “wait their turn” as well as remove the stigma that some feel is associated with being above-zone.
  3. Expansion of opportunities to diversify your career.  Examples include an expansion of the career intermission program and fellowships providing officers with the opportunity to spend some time in civilian industry so that they can bring best practices back to the Navy.
  4. An information technology (IT) investment in a new, more transparent personnel management system.  Ideas I have heard mentioned include eliminating all of the various computer systems that exist and consolidating them into one so that you don’t have to update your record in 20 different ways.  An assignments system has also been mentioned that would allow officers to see all the billets available and apply for the ones that they want, giving commands the ability to pick which officers they want.
  5. Improved co-location policy.  I have no details on this one, and right now I feel the detailers do a pretty good job co-locating dual active duty couples, but others may disagree.
  6. Changes to the physical fitness assessment/body composition assessment (PFA/BCA), which were detailed in this NAVADMIN.  This includes expanded fitness center hours.
  7. Changes to the maternity leave policy, detailed in this NAVADMIN, and expanded child development center hours.

Keep in mind that while some of these changes have been released already, like the PFA/BCA and maternity leave policies, the rest are works in progress.  I think it is interesting, though, to see that the DoD and Navy leadership are interesting in modernizing our personnel system and management.  As a detailer who writes orders on a DOS-based system, I can assure you that modernization is sorely needed.