LETTER TO HONORABLE WILBUR D. MILLS FROM S/JOHN W. MACY, JR.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00364R000500120015-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 16, 2016
• Document Release Date: November 11, 2004
• Sequence Number: 15
• Publication Date: April 19, 1967
• Content Type: LETTER

---?-,44aiaFGved Fa~ Reieas"OG4/12/1 [AR`F7'IB 364" b00 00~ 20015 ?( ~~
IN REPLY PLEASE REFER TO
UNITED STATES CIVIL SERVICE COMM SSION
WASHINGTON, D.C. 20415
Honorable Wilbur D. Mills
Chairman
Committee on Ways and ,leans
House of Representatives
April 19, 1937
Dear 14r. Chairman:
This letter is in response to your oral request for an expression
of Commission views on those provisions of H. R. 5710, a bill "To
Amend the social security Act ...", that relate to transfer of
Federal employment credits to the social security system.
So far as. the civil service retirement systen is concerned, these
provisions, carried in section 116 of your bill, will--
CRC, 3/17/2003
Approved For Release 2004/12/15: CIA=RDP71 B00364R000500120015-4
~i?Ift Mf~l ?'- c1~'e41 M A S?;cr101'1 Ip~VE51 P?i Iai' 1fa ! l~+zit.~ :.il`. F24{tlf.lt.E, I
permit the basic pay of a Federal employee under the civil
service retirement system to be considered remuneration for
employment for OIISDI purposes if neither the employee nor
any of his survivors is entitled to a civil service annuity
on the basis of such service. The provision would
nothat
apply to service before June 30, 1966, or to service
terminated before the second month following enactment.
require the Chairman of the Civil Service Commission to
furnish the Secretary of Health, Education, and Welfare, upon
his request, a record of the service and pay of any e
individual.
direct the Secretary of the Treasury to transfer from the
Civil Service Retirement and Disability Fund to three of
the social security trust funds (The Federal Old-Age and
Survivors Insurance Trust Fund, the Federal Disability
Insurance Trust Fund, and the Federal Hospital Insurance
Trust Fund), annually, an amount sufficient to cover that
proportion of the cost of all benefits paid from the three
social security trust funds during the year which is attri-
butable to Federal employment under the retirement system,
plus interest from the date of such payment.
provide a formula for determinin:; the proportion of the
cost to be borne by the Civil service retirement and Dis-
h
f
e
t
ability Fund. For any one case, this proportion o
 .v.-kpp
Td "ease 2004112/15 : CI RDP71 BCO3&s4R000500120015-4
to persons who are entitled to benefits under the civil service re-
tirement system. Under that part of the proposal, retirement system
benefits would be raised to the extent necessary to assure that such
benefits, together with any OASDI benefits based on other work, will
at least equal the amount that would be payable to retirement system
beneficiaries if the Federal service had been covered by social
security. The benefit levels Which would be guaranteed are the ulti
%Ute levels proposed by H. R. 5710 for future beneficiaries of the
social security system.
e other half of the proposal is a guaranteed benefit applicable only
port of the bill H. R. 678+, and will similarly. support the bill
S. 1383. The Commission now ures favorable action on those pro-
visions of your bill which deal with the subject.
The transfer-of-credit proposal is one half of a two-pronged proosaal--
recommended to the President by his Cabinet Committee on Federal Staff
Retirement Systems and endorsed by him in his last year's Pay rre'sse e,
his January 23 message on Older Americans, and his budget message--
designed to assure that employees subject to the civil service retire-
ment system have a level of protection at leant as high as that which
the social security system affords the rest of the nation's worlforce.
old-age, disability, survivor's, hospital insurance or
other benefit is in the same ratio as the remuneration
for Federal employment bears to the total remuneration
for Federal plus other employment.
This legislation, if enacted, would assure Federal employees who leave
the service without entitlement to retirement system annuity benefits,
and those who lose such entitlement, that their service can be credit-
ed for social security and hospital insurance purposes and thereby give
them continuity of basic protection comparable to that afforded those
who work, and move from one job to another, in private industry, We
support that objective and the proposed method of obtaining it. Com-
panion legislation which would amend the civil service. retirement law
and which in needed to implement the objective has already been in-
troduced in'both houses and referred to the respective Committees.
on Post Office and Civil Service. I have already testified in sup-
We understand that all transfers of credit from the civil service
retirement system to the social security system would be made at
the tine the risk matures* e.g. at the time the employee dies, be-
comes disabled, or reaches social security retirement age without
,protection under the retirement system. Employees would thereby
acquire social security. protection, and would be treated as social
security beneficiaries, exactly as if.their Federal service had
actually been under social security.
Approved, For Release 2004/12/15 : CIA-RDP71 B00364R000500120015-4
 _-Approved For-Release 2004112/15: CCA-RDF71 03648000500120015-4
The retirement system would refund retirement contributions to
employees (or their survivors) only to the extent that such con-
tributions exceed the OASDI and Hospital Insurance tax the employees_
would have paid after June 30, 1966, if their F ecleral service after
that date had been covered by social security. This "tax equiva-
lent" would be deducted from refunds irrespective of whether social
security benefits are or will be payable and of whether OASDI and
Hospital Insurance taxes are being paid on earnings from other
employment. We estimate the level annual cost of this portion of
the proposal at $155 million, over and above the tax equivalents
deducted from refunds. A part of this cdo t would be a. proportionate
reimbursement for benefits paid from the three social security trust
funds in individual cases in which those benefits were not dependent
on or increased by transferred wage credits.
Adoption of the recommended two-pronged approach would--without
disturbing current benefit rights of present employees'and without.
changing the retirement system's present independent status--meet
to a large extent the needs for basic protection that are not now
being met by the civil service retirement system. We urge that
Congress act favorably on legislation to assure that those needs
are met.
The Bureau of the Budget advises that from the standpoint of the
Administration's program there is no objection to the submission of
this report.
By direction of the Cbmmisaion:
Sincerely yours,
S/John W. Macy, Jr.
Chairman
Approved For Release 2004/12/15 : CIA-RDP71 B00364R000500120015-4
 RE lease.-004112/15- CtA-RDr71 BO0364R0005U6fi2OM-
UNITED STATES CIVIL SERVICE COMM)SSION
ROUTING SLIP
NOTEs Indicate Clearance and/or Approval on Official File Copy (Yellow Tissue)
STAT
YOUR INFORMATION
NOTE AND FILE
NOTE AND RETURN
PLEASE SEE ME
PLEASE CALL ME
DRAFT
PREPARE REPLY FOR SIGNATURE OF
APPROVAL OR CLEARANCE
YOUR SIGNATURE
a
R
COMMENT
AS REQUESTED
'rPER CONVERSATION
REMA'RK$1
-7- 1
t1 +'' vYti- off? "` QQ ..
UJWL
AFT R APPROVAL
0 AFTER
FROM
ROOM
CSC FORM 367
JULY 1966
Approved For Release 2004/12/15 : CIA-RDP71 B00364R000500120015-4
)OT110H TO!
?*~ ~ 1, ~ 'r , ~ ~ ) 1 ~ k.I ~r , t, ~F. > 1 A r%~ ~ ~.,~ ~.~ ~ i .I ~ i ,~ ~` F_ a
NAME
0 AFTER MAILING
rI AFTER RECORDING
11 AFTER REVIEW