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It can not truthfully be said that the employees are unanimously in favor of this schedule. Probably no other phase of the retirement question causes so much difference of opinion as the amount of annuity to be paid the retired employee. This is quite natural. The employee who is in receipt of a good salary, say $2,000 or more, does not regard with favor a plan which will compel him to retire on an annuity of $600 or less. The large mass of employees, however, are included in the classes in which salaries range from $720 to $1,400 per annum, and such employees are more enthusiastically in favor of annuities as provided in the Wadsworth bill.

As a test case, in March, 1917, I compiled statistics concerning employees in the Bureau of Pensions who would be eligible for retirement on July 1, 1917, under the provisions of the Wadsworth bill if enacted before that time. It was found that if all should live until July 1, 197 would be eligible for retirement. Of this number exactly 100, or nearly 51 per cent, would receive the maximum annuity of $600; that the lowest annuity would be $180; and the average for all annuitants would be $509.40. It is believed that the average annuity under this bill for the classified service, as a whole, will be about $500 per annum. I am frank in stating, as my personal opinion, that such annuities are fair to the employee and that they will afford a great measure of relief to those who must sooner or later be compelled to retire from the service; also that the Government should not, in justice and in equity, enact a retirement law providing a lower schedule of annuities, particularly under a partly contributory system.

The following is a sample table of annuities :

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The Wadsworth bill provides for deduction of 2 per cent from the salaries of all employees included within the provisions of the bill, limited, however, to $50 per annum, and said deductions become a contribution to the “ civil-service retirement and disability fund.” How far such deductions will go toward mainta'ning the proposed retirement system must be to a certain extent speculative, for the following reasons :

First. It is practically impossible to estimate accurately the number of employees who will retire from the service under the provisions of any bill which includes optional retirement. This feature is not peculiar to the Wadsworth bill; it was also included in the bill known as the Pomerene bill, reported to the Senate at the last session. Students of the question now almost unanmously indorse the theory of optinal retirement, particularly during the first years of operation.

Second. There are at present no available statistics to show how many employees are over 70 years of age. Senator Pomerene in submitting his report, heretofore quoted, states “about 5,000 are 70 years of age or over.” Others believe the number to be considerably in excess of 5,000. If but 5,000 retire the amunt of contributions on a 2 per cent basis as provided in the Wadsworth bill will produce nearly double the amount necessary to pay the annu'ties during the first year of its operat on; or, to reduce this statement to figures, the estimated contributions will amount to $4,900,000, and the estimated annuities will amount to $2,500,000. Of course, if a greater or less number retire the ratio of amount contributed to amount of annuities paid will vary in prportion thereto.

Third. The number of vacancies caused by the retirement of superannuated employees and subsequently filled by appointment or promotion is an unknown quantity, difficult to estimate, and a problem which must be solved by experiThe vacancies remaining unfilled become an asset to the Government. One system of retirement will have no great idlvantage over another when this feature is considered. If there is any force to the argument that a young employee will do more work than one superannuated then it must necessarily follow that there can be, and should be, it in::terial reduction in force following the enactment of a retirement law,

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If this plan is followed in the branches of the service where practicable, then the saving to the Government will amount to millions of dollars annually. It is my opinion that upon the enactment of a retirement law restrictions should be placed on the filling of vacancies. This could not be done in all branches of the service; if a letter carrier is retired his place must be filled ; if a lighthouse keeper is retired, some one must immediately take his place; but it is safe to say that under normal conditions in the departmental service in Washington and in many branches of the service throughout the country not more than 50 per cent of the vacancies caused by retiring superannuates need be filled during the first five years under the operation of any retirement system ; and in some branches of the service I believe not more than 25 per cent of such vacancies need be filled. This would result in a direct saving to the Government amounting to millions of dollars annually.

I have a concrete example to illustrate this point. As before stated, there were in March, 1917, in the Bureau of Pensions 197 employees, or more than 19 per cent, who were over 70 years of age and consequently eligible for retirement. The salaries of these employees aggregate $253,260 annually.

If retired under the provisions of the Wadsworth bill the annuities would aggregate $99,842 annually, a difference of $153,418. There is already restrictive legislation in regard to filling vacancies in this bureau. Assuming that the commissioner would fill such vacancies as he is permitted under the law, the expenditure on account of original appointments and promotions would amount to $55,100 the first year. The contributions from those remaining in the seryice would amount the first year to $20,832, and the net saving to the Government would equal $119,150—an amount more than sufficient to pay all annuities for the second year without taking into consideration the contributions for that year.

It may be pointed out that the Bureau of Pensions furnishes an extreme example of superannuation, but it also teaches the lesson that it is only a question of a few years when similar conditions will exist in nearly every branch of the service unless a retirement law is enacted.

I fully believe the enactment of the Wadsworth bill providing a contribution of 2 per cent from the salaries of the employees, coupled with the saving accruing to the Government through reduction in the number of employees, would equal the amount necessary to pay all annuities as provided in said bill during the first 10 years under its operation.

We have been told that we should wait until a scientific bill can be drafted, one that will show exactly what the cost to the Government will be; that there is grave danger in enacting a law unless these factors are determined in advance. Such arguments are fallacious. No person can know how many employees will be retired under the provisions of any bill wherein an option is given to the employee or where discretion is conferred upon the executive. As already pointed out, such a provision is not peculiar to the Wadsworth bill, as it was also incorporated, in a modified form, in the Pomerene bill; moreover, every advanced student of the retirement question now admits that such option should be a feature of any retirement law.

While the scientists are quibbling over details as to the particular form in which a retirement bill should be drafted, the Government goes on from year to year expending millions of dollars in salaries and does not get value received. A statesman once said, “ The way to resume is to resume.”

I would paraphrase that by saying, “The way to get an equitable retirement law is to legislate.” Put a fair law on the statute books and let experience demonstrate its imperfections and let subsequent legislation cure its defects. No tariff law has been perfect and no income tax law has been perfect; then why expect that a retirement law can be enacted which will be free from imperfections? The enactment of the Wadsworth bill will, in my opinion, come as near to providing an equitable and satisfactory system of retirement as it is possible to devise at the present time. It will be simple in its administration, no board of investment will be necessary, no complicated system for keeping individual accounts will be required, and finally, the partly contributory plan embodied therein will ultimately provide for a nearly equal distribution of the cost of maintenance between the employees and the Government.

Before I leave this question of contributions I desire to point out that under the wholly contributory or compulsory savings plan the entire amount of annuities for those who are retired at once becomes an immediate charge on the Government. Mr. Pomerene estimated this would cost the Government about $2,750,000 the first year and would increase steadily for about 25 years. Under the plan contemplated in the Wadsworth bill the entire amount of contributions becomes immediately available for the payment of annuities and it is altogether probable that not until the fifth or sixth year under the operation of this bill will the Government be required to contribute to the fund. In the meantime experience will demonstrate the value of this system.

A feature of the Wadsworth bill proposes to vest administration so far as adjudication and payment of annuities is concerned, in the Commissioner of Pensions; keeping the official records of employees who are in the classified service and certification from such records in the Civil Service Commission; and the bookkeeping and accounting in the Treasury Department. This contemplates a more harmonious system of administration than has been incorporated in other retirement bills, most of which provide for administration by the Secretary of the Treasury; moreover, the cost of administration through this plan will be reduced to the minimum.

It is entirely logical that the Commissioner of Pensions shall adjudicate and pay the claims of the annuitants. The work will be similar to that already performed in his bureau; the clerical force is trained in the technique of considering claims for pensions; applications for annuities can be specially and expeditiously considered and acted upon by the Pension Office; the disbursing clerk now issues on an average 230,000 checks each month in payment of Army and Navy pensions, and the addition of another 5,000 or even 10,000 checks in payment of annuities would become a mere item in the transaction of the routine business of that office. The present mechanical equipment in the way of addressographs, graphotypes, and adding machines is sufficient to take care of the additional business of paying annuities. There will be no rent to pay. and, in fact, the business can be cared for by the regular force and equipment in the bureau without additional cost. An initial expenditure would be necessary, however, in establishing the system and in connection with the work incident to adjudicating some 5,000 or 6,000 claims for annuities which would probably be filed as soon as the law becomes operative. Boards of surgeons under the jurisdiction of the Commissioner of Pensions are located in nearly every section of the country, and should an application be filed for retirement on account of disability as provided in section 5 of the Wadsworth bill, the applicant could, without great inconvenience, appear before such board for physical examination. The availability of these boards constitutes another reason for investing administration in the Commissioner of Pensions. Should an applicant or an annuitant have cause to make appeal on account of any alleged injustice in the adjudication or in the payment of his claim for annuity, his appeal would lie with the Secretary of the Interior and would be judicially determined by officials familiar with the laws, rules, and regulations governing pension appeals. It is contemplated the same procedure could be adapted to fit the requirements of a retirement law without the employment of extra clerical force in the department. I am authorized by the Commissioner of Pensions to state that in his opinion any law providing for retirement of Government employees should include in its provisions administration by the commissioner.

As contemplated by the Wadsworth bill, the Civil Service Coinmission will continue its records already in existence, showing periods of service of all employees in the classified civil service and the compensation receivel by such employees, the commission to furnish, upon request of the Commissioner of Pensions, a proper certificate from the records in support and in substantiation of an applicant's claim for annuity. I am informed that these records are nearly complete and that the additional work which might be required of the commission could be performed with a slight additional expenditure for clerical services.

The plan for transferring funds on the books of the Treasury Department from specific appropriations to the “civil service retirement and disability

is so simple and so easy of execution as to warrant the statement that no other retirement bill has ever included in its provisions a vehicle which could compare with this in simplicity and in reducing the cost of administration to the minimum. After an initial expenditure for the purpose of installing the system it is believed that the work of bookkeeping and accounting in the

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Treasury Department can be accomplished by the regular force at present engaged in a similar line of work.

One feature of the Wadsworth bill is a provision for retiring employees who may become physically or mentally incapacitated for rendering efficient service before reaching the retirement age, a necessary prerequisite, however, being that the applicant for retirement on account of disability shall have had at least 15 years' service. Not many employees will become eligible for retirement under this provision, but in the interest of humanity and good administration some such provision should be made for a very deserving though small class of cases.

Another feature is a provision for payment of annuities monthly. Most other retirement bills have a plan for payments quarterly, which does not commend itself to the employees. By utilizing the improved methods and mechanical equipment used in the payment of Army and Navy pensions in the Bureau of Pensions it will be possible to pay annuities monthly without additional cost in administration. It is contemplated that checks shall be issued in payment of annuities without requiring separate receipts or vouchers, a practice in harmony with the present system of paying Army and Navy pensions.

Still another distinctive feature of the Wadsworth bill will be found in section 3, which provides that employees in the civil service who have also performed service under the authority of the United States beyond seas or honorable service in the Army, Navy, or Marine Corps of the United States, either Regular or Volunteer, shall receive credit for such periods of service when computing their total service for the purpose of classification. This will include service in the Philippines, in Porto Rico, or in other branches of the service beyond seas, also temporary service in the Military or Naval Establishments.

The wisdom of such provision is apparent at this time when so many of the employees in the civil branches have been mustered into the military and naval service of the United States. It will be noted, however, that in the case of an employee who may be eligible for, and elects to receive, a pension on account of disability incurred in the line of duty, the period of his military or naval service shall not be included for the purpose of classification.

Employees of the Library of Congress and the Botanic Gardens are also included in the provisions of this bill. These employees, coming as they do under the legislative branch of the Government, have a peculiar status. While they are not in the classified civil service, yet their duties, rights, and privileges are analogous to those of civil-service employees, and their tenure of office is reasonably certain; therefore it would appear to be an act of justice to give them the same benefits of a retirement law as will be received by the employees in the classified service.

In conclusion I desire to state that I would not appear before this committee and urge retirement legislation at a time when so many other matters of moment are engaging the attention of Congress if I were not firmly convinced that the interests of the Government would be subserved by such legislation. It has been pointed out that there can be an actual and immediate saving to the Government through reduction in the clerical force due to the retirement of the superannuated and disabled employees. If the partly contributory system on the basis of a 2 per cent contribution as embodied in the Wadsworth bill is adopted, no immediate outlay on the part of the Government will be necessary for the payment of annuities as provided therein.

Efficiency is the watchword of the day in all commercial and industrial enterprises, but the Government through its present method of administration in the civil service has hardly kept pace with the times. We can no more expect an efficient civil service which is clogged with superannuation than we could expect an efficient Army or Navy under the same conditions. There is just as much reason for retirement in the civil branch of the Government as there is for retirement in the military and naval branches. It is equally sure that in the immediate future the utmost economy will be demanded and the inaximum efficiency will be needed in the civil branch of the Government. The enactment of a retirement law will, more than any other measure, accomplish these things.

I can not close this statement without making a plea for the employees whom I represent and of whom I am one. When the retirement question is being considered the humanitarian factor can not be ignored. In the civil service to-day are hundreds and thousands of employees who are waiting anxiously for the enactment of a retirement law; men and women who have rendered faithful service, some of them for more than 50 years, and who would like to retire and spend their few remaining years in peace and comfort. An employee in the civil service has little opportunity to accumulate a sufficient competence during his period of service to enable him to separate himself voluntarily from the service when his earning capacity has become impaired. The fact that Government employees have not been enabled to save a competency is accentuated when we consider the constantly increased cost of living during the past 10 or 15 years and the abnormal cost at the present time. Salaries have not kept pace with these conditions.

Many superannuated employees would like to retire from the service, but either can not afford to resign or dare not take the step in the face of present conditions. They would be only too glad to retire if the Government would supplement their meager incomes with a modest stipend such as the Wadsworth bill provides. So anxious are the employees to have a retirement law enacted that they now come to Congress and offer a contribution toward establishing and maintaining a system. The plan may not be perfect, but if enacted into a law it is sure to result in a real saving to the Government, it will give increased efficiency to the civil service, and it will afford a great measure of relief to a very deserving class of faithful servants. Will not Congress, in the interest of economy, in the interest of efficiency in the service, and in the interest of humanity, give this question their earnest consideration ?

Mr. BEACH (continuing). Mr. Chairman, so that you may be advised now of the most essential features of the plan proposed, I will quote a few excerpts from my prepared statement. * I will be very brief. It will take but a short time.

The CHAIRMAN. That will be all right.
Mr. BEACH (reading):

The plan for retirement, at certain specified ages as outlined in the first section of the Wadsworth bill, is entirely new and has not heretofore been incorporated in any other retirement bill. It provides that eligibility for retirement shall be fixed at 70 years during the first year of operation, at 69 years during the second year, 68 years during the third year, and so on until 65 years becomes the minimum age for optional retirement. As provided in section 7, an employee may be continued in the service beyond the retirement age for stated periods, at the discretion of the head of the department or bureau. After the law has been in full force and effect for a period of 10 years, however, retirement becomes compulsory at 70, and optional at any time between 65 and 70.

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The schedule of annuities provided in the Wadsworth bill fixes a maximum of $600 per annum for those who have been 30 years in the service, and other annuities graduated both in relation to number of years in the service and the average salary, pay, or compensation received during the last 10 years of service.

As a test case, in March, 1917, I compiled statistics concerning employees in the Bureau of Pensions

Where I am an employee (continuing reading) who would be eligible for retirement on July 1, 1917, under the provisions of the Wadsworth bill, if enacted before that time. It was found that if all should live until July 1, 197 would be eligible for retirement. Of this number exactly 100, or nearly 51 per cent would receive the maximum annuity of $600; that the lowest annuity would be $180; and the average for all annuitants would be $509.40. It is believed that the average annuity under this bill for the classified service as a whole will be about $500 per annum.

The CHAIRMAN (interposing). In the classified civil service?

Mr. BEACH. Yes. I believe that the average annuity for the service as a whole, under the provisions of this bill, would be about $500. The salaries in the Bureau of Pensions are higher; the average salary is between ten hundred and eleven hundred dollars in the pension service. If I am not mistaken, this is somewhat higher than the service as a whole.

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