SURVIVOR ANNUITIES WITH RESPECT TO REEMPLOYED ANNUITANTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00364R000500220001-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: December 9, 2016
• Document Release Date: August 21, 2000
• Sequence Number: 1
• Publication Date: September 28, 1966
• Content Type: REPORT

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pp SURVIVOR ANNUITIES WITH RESPECT TO REEMPLOYED
ANNUITANTS
HEARING
SUBCOMMITTEE ON EETIf,EMEN', INSURANCE.
AND HEALTH BENEFITS.
COMMITTEE ON
POST OFFICE AND CIVIL SERVICE
HIOTJSE OF REPRESENT iTIVEES,
EIGHTY-NINTH CONGRESS
SECOND SESSION
ON
S. 699
AN ACT TO AMEND TIIE CIVIL SERVICE RETIREMENT ACT
SO AS TO PROVIDE FOR INCLUSION OF CERTAIN PERIODS
OF REEMPLOYMENT_ OF, ANNUITANTS FOR THE PURPOSE
OF COMPUTING ANNUITIES OF THEIR SURVIVING SPOUSES
SEPTEMBER 28, 1966
Printed for the use of the
Committee on Post Office and Civil Service
U.S. GOVERNMENT PRINTING OFFICE
69-714 WASHINGTON : 1966
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COMMITTEE ON POST OFFICE AND CIVIL SERVICE
TOM MURRAY, Tennessee, Chairman
JAMES H. MORRISON, Louisiana
THADDEUS J. DULSKI, New York
DAVID N. HENDERSON, North Carolina
ARNOLD OLSEN, Montana
MORRIS K. UDALL, Arizona
DOMINICK V. DANIELS, New Jersey
LINDLEY BECKWORTH, Texas
ROBERT N. C. NIX, Pennsylvania
JOE R. POOL, Texas
WILLIAM J. GREEN, Pennsylvania
-SPARK M. MATSUNAGA, Hawaii
.PAUL J. KREBS, Now Jersey
RAYMOND F. CLEVENGER, Michigan
JAMES M. HANLEYY New York
JOHN V. TUNNEY, California
iCHARLES H. WILSON, California
JEROME R. WALDIE, California
ROBERT J. CORBETT, Pennsylvania
H.R. GROSS, Iowa
GLENN CUNNINGHAM, Nebraska
EDWARD J. DERWINSKI, Illinois
ROBERT F. ELLSWORTH, Kansas
ALBERT W. JOHNSON, Pennsylvania
JOHN H. BUCHANAN, JR., Alabama
JAMES T. BROYHILL, North Carolina
CHARLES E. JOHNSON, Staff Director
B. 13ENTON BRAY, Associate Staff Director
JOHN H. MARTINY, I..'o2(neet
WILLIAM A. IRVINE, Assistant Staff Director
THEODORE J. KAZY, Senior Staff Assistant
SUBCOMMITTEE ON RETIREMENT, INSURANCE, AND HEALTH BENEFITS
DOMINICK V. DANIELS, New Jersey, Chairman
LINDLEY BECKWORTH, Texas GLENN CUNNINGHAM, Nebraska
WILLIAM J. GREEN, Pennsylvania H. R. GROSS, Iowa
SPARK M. MATSUNAGA, Hawaii JOHN H. BUCHANAN, JR., Alabama
RAYMOND F. CLEVENGER, Michigan
JAMES M. HANLEY, New York
Ex Officio Voting Members
TOM MURRAY, Tennessee ROBERT J. CORBETT, Pennsylvania
It
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CONTENTS
Statement of-
Page
Dorson, C. L., president, Retirement Federation of Federal Em-
ployees-----------------------------------------------------
6
Ruddock, Andrew E., Director, Bureau of Retirement and Insurance,
Civil Service Commission_____________________________________
4
Additional statements and letters submitted by-
American Federation of Government Employees, statement of ------
8
Broyhill, FIon. Joel T., a Representative in Congress from the State of
Virginia, statement of________________________________________
6
Government Employes' Council, AFL-CIO, statement of _. _ _ _ - - _ _ _ _ _
7
Macy, Iion. John W., Jr., Chairman, U.S. Civil Service Commission,
letter dated September 27, 1966-------------------------------
2
Nilan, Patrick J., legislative director, United Federation of Postal
Clerks, AFL-CIO, statement of-------------------------------
9
Pastore, Hon. John 0., a Senator in Congress from the State of Rhode
Island, statement of-----------------------------------------
7
Rademacher, James [-I., vice president, National Association of Letter
Carriers, statement of________________________________________
9
Rommel, Wilfred II., Assistant Director for Legislative Reference,
Bureau of the Budget, letter dated September 13, 1966-----------
3
Tarr, Clarence M., president, National Association of Retired Civil
Employees, letter dated September 22, 1966 --------------------
10
Wolkomir, Nathan T., president, National Federation of Federal
Employees, statement of_____________________________________
9
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SURVIVOR ANNUITIES WITH RESPECT TO
REEMPLOYED ANNUITANTS
WEDNESDAY, SEPTEMBER 28, 1966
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON RETIREMENT, INSURANCE, AND
HEALTH BENEFITS OF THE COMMITTEE
ON POST OFFICE AND CIVIL SERVICE,
T4 ashington, D.C.
The subcommittee met, pursuant to notice, at 10 a.m. in room 346,
'Cannon House Office Building, Hon. William J. Green presiding.
Mr. GREEN. The subcommittee will come to order.
The subcommittee is meeting this morning to consider the bill,
S. 699, as amended, to amend the Civil Service Retirement Act so as
to provide for inclusion of certain periods of reemployment of annui-
tants for the purpose of computing annuities of their surviving
:spouses.
Under present law, if the reemployment of a retired employee
amounts to at least 1 year of full-time continuous service, he is en-
titled upon final separation to a supplemental annuity based on the
service and salary during the period of reemployment. The law al-
lows the payment of such supplemental annuity only as a single life
annuity, and precludes providing any survivor benefits to the annui-
tant's spouse by virtue of the period of reemployment.
The proposal under consideration, while not creating a survivor
annuity, would provide the qualifying reemployed annuitant, in lieu
of electing a single life annuity, a supplemental annuity reduced by 10
percent, thus providing an additional survivor annuity equal to 55
percent of the single life rate to the spouse originally designated at the
time of retirement.
At this time, without objection, the bill S. 699, the report from the
Civil Service Commission, and the report from the Bureau of the
Budget will be placed in the record.
(The bill and the reports are as follows:)
IS. 699, 89th Cong., 2d sess.]
AN ACT To amend the Civil Service Retirement Act so as to provide for inclusion of certain periods of
reemployment of annuitants for the purpose of computing annuities of their surviving spouses
Be it enacted by the Senate and house of Representatives of the United States of
America in Cnngress assembled, That section 13(b) of the Civil Service Retirement
Act, as amended, is amended by striking out the third sentence and inserting in
lieu thereof the following: "In the case of any annuitant who upon termination
of employment is married to a wife or husband potentially entitled to annuity as
surviving spouse by virtue of the annuitant's retirement, the benefit described
in the proviso shall be reduced by 10 per centum and such wife or husband shall
be paid an annuity equal to 55 per centum of such benefit commencing and termi-
nating at the same times as the survivor annuity payable by virtue of the annui-
tant's retirement, unless at time of claiming the benefit under the proviso. the
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2 SURVIVOR ANNUITIES-REEMPLOYED ANNUITANTS
annuitant notifies the Commission in writing that he or she does not desire the
wife or husband to receive such annuity."
Svc. 2. The amendments made by this Act shall apply only with respect to
reemployed annuitants whose periods of reemployment expire on or after the date
of enactment of this Net.
Svc. 3. The provisions under the heading "Civil Service Retirement and Disa-
bility Fund" in title I of the Independent Offices Appropriation Act, 1959 (72
Stat. 1064; Public Law 85-844), shall not apply with respect to benefits resulting
from the enactment of this Act.
Passed the Senate August 22, 1966.
Attest:
EMERY L. FRAZIER,
Secretary.
U.S. CIVIL SERVICE COMMISSION,
Hon. TOM MURRAY Washington, D.C., September 27, 1966.
,
Chairman, Committee on Post Office and Civil Service,
House of Representatives.
DEAR MR. CHAIRMAN: This refers to your request for Commission report on
S. 699, a bill "To amend the Civil Service Retirement Act so as to provide for
inclusion of certain periods of reemployment of annuitants for the purpose of
computing annuities of their surviving spouses."
Except for retired Members of Congress, disability retirees whose annuities
have been terminated, and retirees with annuities based on involuntary separa-
tion (not for cause or age), section 13(b) of the Civil Service Retirement Act
sets the conditions which apply to all annuitants reemployed in the Government
service regardless of when retirement occurred. When an annuitant is reemployed
subject to section 13(b) the following features apply:
1. Annuity continues during reemployment.
2. Salary in the reemployment position must be reduced by the annuity
allocable to the period of actual employment.
3. No deductions for the retirement fund are taken, but the annuitant is
deemed "covered by" the Retirement Act so as to exclude the employment,
from social security coverage.
4. If the final period of reemployment comprises at least 1 year of con-
tinuous full-time service (not under another Government retirement system
or as President or a judge of the United States), the annuitant is entitled
at separation to a supplemental annuity computed under current law on his
years of service and salary in the full-time reemployment period. The sup-
plemental annuity is specifically made a single life benefit and cannot be
used to create an annuity for or to increase the potential annuity of any
survivor.
5. If the final period of reemployment comprises at least 5 years of con-
tinuous full-time service (as described), the annuitant may at separation
make deposit in the retirement fund covering the reemployment service and
elect to have his annuity completely recomputed under current law based
on his entire service. The complete recomputation operates as though he
were retiring for the first time, with a new right of election as to type of
annuity and the benefit of liberalizing provisions enacted since his original
retirement.
S. 699 would amend the supplemental annuity provision to make the otherwise
single-life annuity amount available to increase the potential survivor annuity
rate of the spouse of the reemployed retiree. Under the bill, if the retiree eligible
for supplemental annuity provided survivor annuity for spouse at time of original
retirement and is still married to that spouse, the supplemental annuity would be
reduced by 10 percent and the spouse would be entitled to additional potential
survivor annuity equal to 55 percent of the supplemental annuity amount. The
reduced supplemental annuity with benefit to spouse would be payable auto-
matically under these conditions unless the retiree elects in writing at time of
claiming supplemental annuity to not provide the added survivor annuity for
spouse. In case of such election and in all other types of cases, the supplemental
annuity would remain a single-life benefit, increasing the retiree's rate only.
This change in the supplemental annuity provision would be prospective in its
operation and would apply only to reemployed annuitants whose periods of full-
time reemployment service end on or after date of the bill's enactment.
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SURVIVOR ANNUITIES REEMPLOYED ANNUITANTS, 3
At the time the supplemental annuity provision was added to the Retirement
Act in 1956, experience indicated that the reemployment periods of annuitants
were relatively brief and the resulting supplemental annuity amounts were not
large enough to provide a significant increase in a spouse's potential survivor rate.
The supplemental annuity was thus made a single-life benefit. Over the years
this has been a satisfactory arrangement in the great majority of cases.
However, there are instances in which the annuitant serves in reemployment for
a substantial period and earns a supplemental annuity large enough to provide a
meaningful increase in his spouse's survivor rate under a joint- and survivorship-
supplemental annuity provision. S. 699 proposes an acceptable method of
allowing use of supplemental annuity to increase potential widow and widower
annuities in proper cases, and the Commission has no objection to its enactment.
We have no data on which to base a precise estimate of the retirement cost
involved in this proposal. The number of reemployed annuitants who qualify
for supplemental annuity is small. Considering the low volume of cases expected
to be affected, the cost probably would not be material in terms of the total cost
of the retirement system.
In connection with our report on S. 699 to the chairman of the Senate Com-
mittee on Post Office and Civil Service, the Bureau of the Budget advised that
from the standpoint of the administration's program there is no objection to the
submission of the report.
By direction of the Commission.
Sincerely yours,
ExECUTIVE OFFICE OF THE PRESIDENT,
BUREAU OF THE BUDGET,
Washington, D.C., September 13, 1966.
Ilon. Tom MURRAY,
Chairman, Committee on Post Office and Civil Service, House of Representatives,
Washington, D.C.
DEAR MR. CHAIRMAN: Reference is made to the committee's request for the
views of the Bureau of the Budget respecting S. 699, an act "To amend the Civil
Service Retirement Act so as to provide for inclusion of certain periods of re-
employment of annuitants for the purpose of computing annuities of their sur-
viving spouses," as passed the Senate August 22, 1966.
Under present law, reemployed annuitants continue to receive their annuities
with salary for the reemployment position reduced by the amount of the annuity.
Such persons reemployed full-time for at least 1 year are entitled, on re-retirement,.
to a supplemental, single-life annuity based on the salary and length of the re-
employed service, computed under current law-that, is the law in effect at the
time of the second retirement. These employees make no contribution for the
single-life annuity and it cannot be used to create an annuity for, or to increase the
potential annuity of, a survivor.
The purpose of S. 699 is to provide a special formula to permit a reemployed
annuitant to use single-life annuity to provide a spouse s survivor annuity.
Under the terms of S. 699, the privilege would be available only in the case of an
employee who made provision for survivor annuity at the time of his first retire-
ment and would require a 10 percent reduction in the supplemental single-life
annuity to pay for the added survivor benefit.
There would be no objection from the standpoint of the administration's
program to enactment of S. 699.
Sincerely yours,
WILFRED H. ROMMEL,
Assistant Director for Legislative Reference.
Mr. GREEN. Our first witness this morning is Mr. Andrew E.
Ruddock, Director of the Bureau of Retirement and Insurance, Civil
Service Commission.
Good morning, Mr. Ruddock. We are happy to have you here.
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4 SURVIVOR ANNUITIES-REEMPLOYED ANNUITANTS
STATEMENT OF ANDREW E. RUDDOCK, DIRECTOR, BUREAU OF
RETIREMENT AND INSURANCE, CIVIL SERVICE COMMISSION
Mr. RL"DDOCK. I have a very short statement, Mr. Chairman, and
I would prefer to read it, with your permission.
I appreciate this opportunity to appear on behalf of the Commission
in this hearing on the bill S. 699. The purpose of this amendment to
the Retirement Act is to allow a retiree to provide for a survivor
annuity based on his supplemental annuity earned by reemployment
service.
Linder present law, if a retiree is reemployed under conditions not
terminating his annuity entitlement, his salary is reduced by the
amount of his annuity, and he is considered covered by the Retire-
ment Act but no deductions for the retirement fund are withheld from
his salary. If he completes between 1 and 5 years of continuous
full-tune reemployment service, he is entitled upon separation to a
supplemental annuity computed on the basis of his years of service
and salary during the reemployment period. The supplemental
annuity thus earned is a single-life benefit which cannot increase the
benefit payable to any survivor.
S. 699 would amend the act to make the supplemental annuity
amount available to increase the potential survivor rate of the husband
or wife of the reemployed annuitant. Under the bill, additional
survivor annuity is available if the retiree elected a survivor annuity
at the time of his original retirement and if he is still married to the
same husband or wife. The supplemental annuity would be reduced
by 10 percent and the husband or wife would be entitled to an increased
survivor benefit equaling 55 percent of the supplemental annuity
amount. The reduction with the increased survivor benefit would be
automatic unless the retiree elected to take a single-life supplemental
annuity.
At the time the supplemental annuity provision was added to the
act in 1956, experience indicated that the reemployment periods of
annuitants were relatively brief and that the resulting supplemental
annuity amounts were not large enough to provide a significant in-
crease in a spouse's potential survivor rate. The supplemental
annuity was accordingly made a single-life benefit. Over the years
this has been a satisfactory arrangement in the vast majority of cases.
However, we now recognize that there are instances of an annuitant
working for an extended period and earning a supplemental annuity
large enough to provide a meaningful increase in the potential survivor
rate of his husband or wife. S. 699 provides a workable method of
allowing use of supplemental annuity to increase widow or widower
annuities in proper cases, and the Commission has no objection to its
enactment.
Because of the small number of reemployed annuitants who qualify
for supplemental annuity, we would anticipate that the probable cost
of S. 699 will not be material in terms of the total cost of the retire-
ment system.
At this point, Mr. Chairman, I would add that over the years
since 1956, the number of reemployed annuitants who do earn a
supplemental annuity averages slightly less than 200 a year. I believe
the number we had last year actually was 171. So, we are talking
about a very small number of potential beneficiaries of this legislation.
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SURVIVOR ANNUITIES-REEMPLOYED ANNUITANTS 5
I thank you-for permitting me to express the views of the Commis-
>sion on this legislation, and I will be happy to answer any questions.
Mr. GREEN. Thank you, Mr. Ruddock, for coming before our
committee today and presenting a very fine statement.
I would like to recognize the other members of the committee for
any questions they might wish to ask at this time,
Mr. MATSUNAGA. I do not quite understand when you say that the
supplemental annuity would be reduced by 10 percent and the husband
or wife would be entitled to an increased survivor benefit equaling
55 percent of the supplemental annuity amount. Do you mean the
regular entitlement for the additional salary which he would. be
earning would be reduced by 10 percent?
Mr. RUDDOCi. Yes. Let us assume a hypothetical case. Let
us assume an annuitant is reemployed for 1 year's continuous full-
time employment at a salary of $10,000. At the end of that 1 year
of service he leaves employment and applies for a supplemental
annuity. The supplemental annuity would be 2 percent of the
annual salary rate during that period of employment multiplied by
the years of service. So, in his case, 2 percent of $10,000 would be
$200 times 1 year of service. He would have earned a supplemental
annuity of $200 a year. If S. 699 is enacted and he is an individual
who, on his original retirement, elected reduced annuity with benefits
to a survivor, then unless he affirmatively elects not to provide
survivor annuity from this supplemental annuity, the $200 would be
reduced by $20, so he would then receive a supplemental annuity
at the rate of $180. After his death, the survivor annuity of his
wife would be increased by $110, or 55 percent of the $200 unreduced
rate. The 10-percent reduction in his annuity is essentially the
price he pays for the survivor annuity. From an actuarial basis,
that is a bargain to the employee. That is considerably less than
the actuarial cost of providing a survivor annuity.
Mr. MATSUNAGA. But he would have to act positively in order to
avoid the new provisions of S. 699.
Mr. RUDDOCK. Yes; that is right. Under the. provisions of law,
for an individual who is retiring, if he is married, the law provides a
reduced annuity with benefit to the widow unless he furnishes the
Commission in writing a statement that he does not want the survivor
annuity. This is primarily for the protection of the widow and is to
avoid misunderstandings. It also takes care of the situation where
the individual perhaps dies or suffers some kind of disabling accident
,during the process of retiring and is unable to perfect his election.
The present law for regular annuities and, similarly, this provision
in S. 699, where the individual is unable to perfect an election, would
provide the survivor protection, rather than deprive the widow of the
survivor protection.
Mr. MATSUNAGA. I would like to know what the exact meaning of
41single-life benefit" is.
Mr. RUDDOCK. This is an annuity to the retiring employee only,
and with no provision for annuity to a surviving widow or widower.
Mr. MATSUNAGA. I have no further questions.
Mr. GREEN. Mr. Buchanan?
Mr. BUCHANAN. I appreciate your testimony, Mr. Ruddock. I am
delighted to find there is some benefit corning to the Federal employees
which is not opposed by the administration.
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6 SURVIVOR ANNUITIES-REEMPLOYED ANNUITANTS
Mr. RUDDOCK. I am happy to be in that position this morning, sir.
Mr. BUCHANAN. Fine.
Mr. GREEN. Mr. Hanley?
Mr. HANLEY. Mr. Ruddock, do you have an estimate of the cost
of this legislation?
Mr. RUDDOCK. N o. We have been unable to calculate any cost.
In terms of the total cost of the retirement system, this is so small
that it is infinitesimal. We are talking of a potential 200 or less.
customers a year. We do not have detailed information on how
many of them have spouses currently living. We would have information at the time the man originally retired as to whether he was.
married or single, but we do not receive notice of the death of a spouse
unless it is a case in which we are paying an annuity to that person.
Mr. HANLEY. I have no further questions, Mr. Green.
Mr. GREEN. I have no questions, Mr. Ruddock. Unless there are
further questions, I want to thank you once again for giving us the
benefit of your views on this legislation.
Mr. RUDDOCK. Thank you, Mr. Chairman.
Mr. GREEN. Our next witness is Mr. C. L. Dorson, president of
the Retirement Federation of Civil Service Employees.
STATEMENT OF C. L. DORSON, PRESIDENT, RETIREMENT FED
ERATION OF CIVIL SERVICE EMPLOYEES
Mr. GREEN. It is certainly a pleasure to welcome you before the
committee.
Mr. DoRSON. Thank you kindly, Mr. Chairman.
I have no written statement. The organization which I am proud'
to represent favors the enactment of the legislation before you, and.
hopes this committee will act speedily and favorably. Thank you.
very much.
Mr. GREEN. Thank you very much, Mr. Dorson.
If there are no other witnesses, we will keep the record open for
several days, without objection, so anyone who should like to submit:
a statement on this particular piece of legislation may do so.
The meeting is adjourned.
(Whereupon, at 10:30 a.m., the subcommittee adjourned.)
(The following statements and letter were submitted for inclusion
in the record:)
STATEMENT OF HON. JOEL T. BROYHILL, A REPRESENTATIVE IN CONGRESS FRoi
THE STATE OF VIRGINIA
Mr. Chairman, I am most grateful to the subcommittee in affording me the
opportunity to express my keen interest in and strong support for the bill under
consideration, S. 699.
The Civil Service Retirement Act permits, and has for the past 10 years, the
allowance of a supplemental annuity to reemployed retirees who subsequently
perform at least 1 continuous year of full-time reemployment with the C?overn-
ment. In 1956, when the supplemental annuity provision was adopted, experi-
ence indicated that periods of reemployment of retirees were somewhat short,
and the resultant benefits would not he substantial enough to significantly increase
the spouse's eventual rate of annuity. Thus, the supplemental annuity was
limited to a single life rate, for the sole benefit of only the retired employee.
However, a decade of experience discloses instances in which retirees perform
reemployment service for substantial periods, thereby earning supplemental
benefits large enough to furnish meaningful increases in the spouses' survivor
rates.
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SURVIVOR ANNUITIES-REEMPLOYED ANNUITANTS 7
S. 699 proposes amending the supplemental annuity provision so as to make the
additional annuity available to increase the rate of the potential survivor annui-
tant. It proposes, if the reemployed annuitant who becomes eligible for a supple-
mental annuity had designated a survivor annuity for the spouse upon initial
retirement and is still married to that particular spouse, to reduce the supplemental
annuity by 10 percent and entitle the spouse to an additional potential survivor
benefit amounting to 55 percent of the supplemental annuity. Such reduced.
annuity and additional survivor protection would be automatically payable by
operation of law, unless the retiree elects to accept the single life benefit.
I believe that S. 699 proposes a highly desirable and workable method of permit-
ting use of the supplemental annuity for survivor purposes. I urge the commit
tee's prompt and favorable consideration of the bill, and will exert my best efforts to
obtain its early and successful consideration by the House.
STATEMENT OF IION. JOHN O. PASTORE, A SENATOR FROM THE STATE OF RHODE ?
ISLAND
Mr. Chairman, first of all I want to thank you for giving me this opportunity
to explain to the members of the subcommittee the facts which led me to in
troduce S. 699. This bill would amend the Civil Service Retirement Act to
provide for the inclusion of certain periods of reemployment of annuitants for
the purpose of computing the annuities of the surviving spouses.
S. 699 will provide relief to Dr. Otto Reitlinger and a very few other civil
servants who are in a position similar to his.
Dr. Reitlinger is a 75-year-old scientist of great distinction. Ile received the
U.S. Navy Distinguished Civilian Service Award for his development of a safe
nonexplosive monopropellant used in our naval torpedoes.
This economical fuel bears his name--Otto Fuel II. It is the propellant used
in one torpedo now being distributed to our fleet for evaluation and will be
used in another torpedo still under development.
Dr. Reitlinger is employed at the present time at the Naval Propellant Plant
in Indian Head, Md. Ile is doing research now on a fuel which would allow the
operation of our torpedoes at even greater depths. This is of significant interest
in the field of modern underwater warfare.
Because of his eminence in his field the Civil Service Commission, at the request
of the Bureau of Naval Weapons, exempted Dr. Reitlinger three times from
mandatory retirement. The third extension terminated in December of 1964.
His work did not terminate, however. Dr. Reitlinger was retired on December
31 of that year and immediately reemployed to continue his classified experiments.
This brings me to the problem which led to the drafting of S. 699. Under the
provisions of the Civil Service Retirement Act, Dr. Reitlinger's spouse, in the
event she survives him, will be deprived of additional survivor's benefits for the
years of his reemployment.
S. 699 will remedy the inequity. The bill provides that a reemployed annuitant
may elect a survivor annuity which will be based on his supplemental annuity
provided that he meets with certain conditions which were recommended by the
Civil Service Commission.
I understand that a minimum number of reemployed civil servants will be
affected by the proposed legislation-perhaps less than 50.
In the next 5 years Dr. Reitlinger's fuel will save the Government approximately
$80 million. This economy will result from the use of Reitlinger's monopropellant
in one torpedo model alone. Others will follow and the savings will grow.
In comparison the cost of this legislation is infinitesimal.
I am certain that the committee will act with equity-aware of Dr. Reitlinger's
contribution to our national defense and economy in Government-when you -
consider S. 699.
STATEMENT OF THE GOVERNMENT EMPLOYES' COUNCIL, AFL-CIO
Mr. Chairman and members of the subcommittee, the Government Employes"
Council desires to endorse the proposal under consideration by the subcommittee.
Basically, the bill permits a retired Federal worker who is reemployed to obtain
an increased annuity for his surviving spouse, if he elected that type of shared.
pension at the time of his original retirement.
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8 SURVIVOR ANNUITIES-REEMV PLOYED ANNUITANTS
The Civil Service Retirement Act now entitles the reemployed retired worker
to secure a supplemental annuity upon completion of 1 year's reemployment. A
reemployed retiree, who acquires 5 additional years of service, may have it added
to his original length of service and have his entire pension recomputed. Of
course, to accomplish this, he must make the appropriate contribution to the
retirement fund. But, in either case, the additional retirement credit cannot be
used to increase the amount of annuity due his survivor upon the employee's
death.
Retired Federal workers who are reemployed perform very useful services for
their agencies. Their years of experience and knowledge of technical matters and
procedures in many cases lead the departments to request their return to duty
following retirement. Since their services are valuable to the Federal Govern-
ment, they should not incur any diminution of their equity in the retirement
system. To deny them the opportunity to augment the annuities of their
surviving spouse in proportion to their own entitlement is in our view unfair.
The bill approved by the Senate allows the reemployed retiree to choose a
survivor annuity if lie made such a choice at the time of his initial retirement.
To do so, he would have to accept a 10-percent reduction in his own augmented
pension. This is the amount of reduction in effect for those who elect a sur-
vivorship annuity when they retire initially for any part of the pension exceeding
$3, 600.
As a matter of equity to highly qualified retired employees who accept reemploy-
ment to assist their agencies, the bill approved by the Senate has appeal. Accept-
ance of the measure by the House will eliminate the present deficiency in the
statute.
The council solicits the cooperation of the subcommittee in presenting a favor-
able report to the full committee on S. 699 at an early date.
We are grateful for this occasion to offer our reactions to the pending bill.
STATEMENT OAS AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES
The bill, S. 699, which has been approved by the Senate, has the support of the
American Federation of Government Employees as a measure which merits
early enactment.
This bill would benefit the annuitant who has been reemployed by the Federal
Government after retirement from a position in the Federal service. It would
permit the reemployed annuitant to provide a survivor retirement benefit based
on the supplemental annuity to which he became entitled by reason of his
reemployment.
The survivor annuity would be 55 percent of the employee annuity in the case
of the survivorship growing out of the service during reemployment. To furnish
this survivor annuity, the retiree's supplemental annuity is to be reduced 10 per-
cent to cover the cost of the survivorship benefit. This reduction parallels the
reduction of 10 percent of that part of an annuity in excess of $3,600 of an em-
ployee who is retiring from his regular employment for the first time.
Present law requires the reduction of a reemployed annuitant's salary by the
amount of his annuity. Deductions are not withheld from his salary ; but if the
reemployment continues for 1 year of continuous service, he is entitled to a sup-
plemental annuity computed according to the usual formula. If the additional
service continues for 5 years, the retiree may pay into the retirement fund a sum
equal to the deduction for the period of additional service. For this payment, he
may receive a recomputation of his retirement benefit for his entire service both
before and after retirement. From the.employee's standpoint, the shortcoming
of the present law is that the recomputed benefit would not increase the survivor-
ship annuity payable to his spouse based on the earlier service.
In its original form, the bill permitted an annuitant who had been reemployed
to make a deposit in the retirement fund equal to the deduction which ordinarily
would have been made from the salary received after reemployment. It was
required that he must have elected a survivor, annuity at the time of retirem nt.
By way of further benefit, the annuitant would have been able to combine his
regular annuity with the supplemental annuity for the purpose of computation
of the survivor annuity as well as the reduction in his own annuity.
A significant feai.>>re of the original bill was the reduction from 5 to 2 years
of the period of reemployment required for a new computation of annuity based
on the combined periods of service. We do not agree with the objection of the
Civil Service Commission that this provision was unreasonable and dispropor-
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tionate to the value of the services performed or salary received during the
short reemployment periods. Two years do not constitute a particularly "short"
period. If a position is compensated accordiiig`to the principles of classification.
and in conformance with budgetary requirements, the resultant annuity shou 0
not be disproportionate to the value of the individual's services hat t h e
Government is paying for is experience gained through many 30 years of Federal
service.
It is our desire to express our gratitude to this committee for an opportunity
to express our views.
STATEMENT. OF NATIIAN T. WOLKOMIR,,PRESIDENT, NATIONAL FEDERATION OF
FEDERAL EMPLOYEES
Mr. Chairman and members of'the subcommittee, I 'am president' of the Na-
tional Federation of Federal Employees, the oldest and largest independent union
of Federal employees. Out organization has a long record of supporting con-
structive retirement legislation, going back to the orig nal Retirement Act of 1920,
the enactment of which was a major objective of the NFFE when our organization
was founded back in 1917.
I am happy to have this opportunity to express support of S. 699. S. 699 per-
mits an annuitant, who is reemployed, to count under certain conditions such
service in the recomputation of the annuity.. ofa sn rvi,ving spouse. This would
provide benefits to survivor annuitants comparable to those enjoyed by annuitants.
The rationale involved'in granting increases to annuitants is even. more compelling
for granting increases to their survivors due to the reduction built in,the.system.
As the fiscal soundness of the retirement fund will not be endangered, the NFFE
believes the annuitant should have the option provided-by S. 699. Accordiigly
NFFE recommends that favorable actioii'be taken on S. 699.
Thank you for your courtesies and for the opportunity to express these views.
STATEMENT Or PATRICK J. NILAN, LEGI,LA'rIva DIRECTOR, UNITED FEDERATION
or POSTAL CLERKS, AFL-CIO,
Mr. Chairman and rrleillbers of the committee
the United Federation of Postal
Clerks appreciates this opportunity to support , p99. which proposes to include
certain periods. of reemployment of annuitants for the purpose of computing
annuities. of their surviving spouse, .
This legislation proposes to snake it possible for a retired postal employee sub-.1 1 sequently reemployed by the Government to obtain for his surviving spouse an
increased annuity. , This opportunity would be available if such an employee
elected that type of shared pension at the time, of his original retirement.
Mr. Chairman, we believe this legislation would be a benefit,. not only to the
employee and his spouse, .but also to the Government agency, such as the Post
Office Department, in which a worker is reemployed. It is entirely possible the
Government would on.occasion encourage a retired employee to request reinstate-
ment to the active employee rolls. It is entirely possible the services and experi-
ence of this employee would be most beneficial. to the Government service.
S. 699, previously approved by the U.S. Senate, would permit a reemployed
retired worker to select a survivor annuity providing ho:made such an election at
the time of his initial retirement., The employee would,. of course, have to accept
the basic 10 percent reduction in his own increased pension.
Thank you, Mr. Chairman and members of the committee, for this opportunity
to present the views of the United Federation of Postal Clerks in support of this
legislation. We urge the :committee to favorably report S. 699 to the U.S. House
of Representatives and sincerely hope the House of Representatives, will approve
the legislation and send it to the President for enactment into law.
STATEMENT OF JAMES IT. RADEMACHER, VICE PRESIDENT, NATIONAL ASSOCIATION
Or LETTER CARRIERS
The National Association of Letter Carriers, which represents over 200,000
employees in the letter carrier craft, and an additional 25,000 retirees, widows,
and potential survivors, strongly endorses S. 699, legislation by Senator Pastore,
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which would provide for inclusion of certain periods of reemployment of annuitants
for the purpose of computing annuities of their surviving spouses.
We have a twofold purpose in endorsing this meritorious proposal: (1) the very
minute number of those involved need spokesmen for their cause, and we are
pleased to serve in that capacity; and (2) in our era of realistic retirement pro-
grams, the Government cannot sit idly by and permit laws to remain on the books
which cause an injustice to even one widow or widower of a former Government
worker.
It is the responsibility of all of us today to seek corrections and point out
injustices and inequities in existing legislation which tend to place the Government
worker and his family in a class of second-rate citizens.
Since there apparently is so little involved financially in the enactment of S. 699,
when compared to the overwhelming value of the legislation, Congress should see
fit to act promptly in this area.
Generally the reemployed annuitant is a Government worker who has found
it necessary to leave his agency, and upon return he finds that there does exist a
serious inequity which is injurious to his survivor annuity. Therefore, simple
justice alone dictates the need of enactment of S. 699, and we hope that the House
subcommittee will report the legislation favorably to the full committee where
subsequently it will be enacted into law.
NATIONAL ASSOCIATION or RETIRED CIVIL EMPLOYEES,
Washington, D.C., September 22, 1966.
Hon. DOMINICK V. DANIELS,
Chairman, Subcommittee on Retirement, Insurance, and Health Benefits, Committee
on Post Office and Civil Service, House of Representatives, Washington, D.C.
DEAR MR. DANIELS: We thank you for your invitation to present our views on
S. 699, a bill by Hon. John O. Pastore of the U.S. Senate, "To amend the Civil
Service Retirement Act so as to provide for inclusion of certain periods of reem-
ployment of annuitants for the purpose of computing annuities of their surviving
spouses." This bill has passed the Senate and is now pending before your sub-
committee of the House.
Under present law, when a retired Federal employee is reemployed his annuity
remains unchanged. His salary is reduced by the amount of the annuity pay-
ments received, and if his reemployment terminates within a year, that is all
there is to it. If his reemployment continues for more than 1 year, he is given
a supplemental retirement annuity, but this does not operate to increase the
Survivor annuity he had designated for his spouse. If his reemployment continues
for 5 years, his retirement is redetermined, and he may make a new election for a
survivor annuity.
S. 699, as amended in the Senate, would change the law with respect to survivor
annuities arranged by retiring Federal employees who are subsequently reemployed
and whose reemployment service continues for more than 1 year but less than
5 years. Upon termination of such reemployment periods, the retirees would
be permitted to increase the survivor annuities previously authorized, and to
elect corresponding additional reductions from their annuities. The bill would
not apply to grant additional survivor annuities in the cases of reemployed annui-
tants whose reemployment had terminated prior to the date of its approval.
This bill is very limited in its application and would affect only a relatively
few persons. However, it is a benefit to the few people who would be affected,
and we recommend its approval by your subcommittee and the Congress. We
regret that it does not provide retroactive relief for persons similarly situated
in the past, but we recognize the difficulty of trying to have it amended at this
late season and still receive approval. For this reason, we urge that the bill be
approved in its present language, and reserve for the future any attempt to
secure retroactive application of the principle it establishes.
Sincerely,
CLARENCE M. TARR, President.
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