TESTIMONY OF TOM W. GRIFFITH, PRESIDENT NATIONAL RURAL LETTER CARRIERS ASSOCIATION BEFORE THE COMMITTEE ON POST OFFICE AND CIVIL SERVICE U.S. HOUSE OF REPRESENTATIVES ON CIVIL SERVICE SUPPLEMENTAL RETIREMENT SYSTEM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89-00066R000100070006-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: April 22, 2010
• Sequence Number: 6
• Publication Date: October 23, 1985
• Content Type: OPEN SOURCE

11'5 E;CAi
Mr. Chairman and Members of the Committee:
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NATIONAL RURAL LETTER CARRIERS' ASSOCIATION
TOM W. GRIFFITH, President
OLIN F. ARMENTROUT, Vice President
VERNON H. MEIER, Secretary Treasurer
DALLAS N. FIELDS, Director of Labor Relations
TESTIMONY
OF
TOM W. GRIFFITH, PRESIDENT
NATIONAL RURAL LETTER CARRIERS' ASSOCIATION
BEFORE THE
COMMITTEE ON POST OFFICE AND CIVIL SERVICE
U. S. HOUSE OF REPRESENTATIVES
CIVIL SERVICE SUPPLEMENTAL RETIREMENT SYSTEM
October 23, 1985
JONA,ti J. WAI Mt-k. Chairman
P.O. Box 2r-
Grantville, Pennsylvania 1-02h
STI\-I , R. SM! -H
P.O. Boa 2(40
Tahlequah, Oklahoma 744,,5
MARI YN. B. DAH1 1,
Route #), Bo,. 13
Mabel, Minnesota 55954
SCOTT It- B. H:
Route fl , Box 595
Morehead, Kentucky 40351
My name is Tom W. Griffith. I am the President of the
66,000-member National Rural Letter Carriers' Association.
letter carriers serve 15 million American families by
daily
traveling 2,387,951 miles over 38,925 rural routes throughout
We are honored to appear before the Committee on Post Office
and Civil Service and offer our testimony on your
are extremely grateful for the dedication that you and your
staff have put into mastering the complexities of developing
??C21
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a new retirement system. We appreciate the importance of moving
rapidly on this issue since the interim retirement system expires
at the end of this year. And, we are sure that after this
Committee's deliberations and action, that substantial work
will be required of a Committee of Conference. We support your
efforts to move expeditiously.
We wholeheartedly support your plan as we currently
understand the concepts. We have, for some time, accepted the
realities of a modern pension plan with some degree of enthusiasm;
that is a three-tiered approach where the first tier would be
Social Security, the second tier would be a Defined Benefit
Plan, and the third tier would be a Savings or Capital
Accumulation Plan.
Cost - We approve of the cost of your plan as projected
at 25.5% of payroll, which is nearly equal to the cost of the
existing system. The Hay Study, which was presented to this
Committee last year, indicated that Federal employees were lagging
behind private sector employees in total compensation. The
lag in pay was partially overcome by the retirement component.
We think that balance is important! Many of the components
of the current Civil Service Retirement system have provided
positive examples for private sector pension plans. Without
the strong example of the Federal Government, private pension
plans would not be nearly as generous as they are today.
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If the Government and the Postal Service are to be able
to attract, train and retain qualified, dedicated employees,
the compensation package, which includes a retirement program,
must be made attractive and worthwhile. The cost of the
retirement plan is one way the Government can express its
appreciation for many years of dedicated, effective service.
Social Security Tilt - We support your decision to use
an add-on form of Defined Benefit. We are aware that it
continues the tilt which exists in the Social Security System
toward the lower waged workers. However, your plan very wisely
includes a feature which can partially offset the tilt by the
individual initiative of any particular employee who voluntarily
participates in the savings plan.
Age and Vesting - We agree with and strongly support the
right of a worker to retire at 55 years of age with 30 years
of service, 60 years of age with 20 years of service, or 62
with 5 years of service. We suggest that for early retirement
benefits under the new system, an employee should have the right
to purchase such an option and share in the cost.
Employee Contributions - The mandatory employee contribution
to the defined benefit component is a step toward cost sharing
for early retirement. There is precedence for employee
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contributions to public sector pension plans unlike the private
sector plans, which are largely non-contributory retirement
plans. In the public sector, employee contributions to their
basic pension plan have the added benefit of discouraging the
temptation by future Congresses to tamper with the basic plan.
Accrual - We understand the difficult task that confronted
the Committee, with holding the cost within reason. We think
you have done an excellent job. However, we would hope there
would be a way to provide a slightly higher accrual rate, which
is back-loaded to encourage and reward those who wish to make
Government service their career.
Disability and Survivor Benefits - We compliment the Chairman
and Ms. Oakar's sensitivity and concern for anyone unfortunate
enough to need this benefit. Your concern is clearly reflected
in the eligibility and protection afforded employees and their
dependents in this section.
Computation - We fully support the average High-3 annual
salary formula. We think it is a fundamentally fair way to
compute an employee's annuity.
COLA - We strongly support the fact that this Bill includes
fully indexed COLA's. The Federal Government has been, and
should continue to be, a leading example for this Nation's
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workers. When Government provides a fully indexed COLA, it
has a positive effect. The testimony at the Senate Retirement
Forums pointed out that most private employers do not provide
a cost-of-living adjustment provision. However, many of them
make ad hoc adjustments every three to five years. We firmly
believe the reason for those ad hoc adjustments is due to the
pressure the Federal Government has brought in the work place
by having fully indexed COLA's. It is a very positive example
that the Federal Government has set, and it should continue.
It also assures retirees the ability to live out their lives
in dignity with a decent standard of living.
Savings-Capital Accumulation Plan - We said in our testimony
before the Senate, that we thought there should be a smaller,
voluntary savings component in S. 1527. For employees who desire,
they should be allowed to contribute up to 10% of their salary,
and the Government's one-for-one match should be limited to
the first 3% of salary. Your proposal provides that each employee
can contribute 6% of salary to receive a 3% match by the employer.
We believe that is basically along the lines that we had proposed
in our testimony in the Senate and, therefore, we can support
that provision of the plan.
An average rural letter carrier starts at about $18,000
a year. The average rural carrier, at the top of their career,
receives about $26,000. In those pay ranges, few of our members
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will be financially able to participate fully in a voluntary
savings program, early in their employment, because most will
buy their first homes and begin families. Mortgage, car, and
education costs will come first. Savings, unfortunately,
will probably take a back seat to those things for most rural
carriers. However, later in life, we suspect that most rural
letter carriers will take full advantage of the savings component
of the Bill.
That concludes our analysis of the key ingredients of this
piece of legislation.
Mr. Chairman, Ms. Oakar, we are extremely grateful for
the openness and cooperation which has been afforded us and
our staffs all through this process. We have not always been
in agreement and probably will not always agree in the future.
But, the process has been open and we have been allowed full
input. For that, we are grateful as we struggle with this
extremely complicated issue.
We appreciate your interest and concern that new employees
receive a pension plan that, in the words spoken a few years
ago by Chairman Ford, Speaker O'Neill and Chairman Rostenkowski
have indicated that new Federal employees should be provided
retirement benefits which are comparable to those under the
Civil Service Retirement System. We thank you for your efforts
in that behalf.
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