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Member under section 8 shall commence on the first of the month after the occurrence of the event on which payment of the annuity is based.

"(c) An annuity shall terminate on the last day of the month preceding the month in which death or any other terminating event provided in this Act occurs. "(d) Any person entitled to annuity from the fund may decline to accept all or any part of such annuity by a waiver signed and filed with the Commission. Such waiver may be revoked in writing at any time, but no payment of the annuity waived shall be made covering the period during which such waiver was in effect.

"(e) Where any payment is due a minor, or a person mentally incompetent or under other legal disability, such payment may be made to the person who is constituted guardian or other fiduciary by the law of the State of residence of such claimant or is otherwise legally vested with the care of the claimant or his estate: Provided, That where no guardian or other fiduciary of the person under legal disability has been appointed under the laws of the State of residence of the claimant, payment may be made to any person who in the judgment of the Commission is responsible for the care of the claimant, and such payment shall be a bar to recovery by any other person.

"EXEMPTION FROM LEGAL PROCESSES

"SEC. 15. (a) None of the moneys mentioned in this Act shall be assignable, either in law or equity, or be subject to execution, levy, attachment, garnishment, or other legal process.

"(b) Notwithstanding any other provision of law, there shall be no recovery of any payments under this Act from any person when, in the judgment of the Commission, such person is without fault and such recovery would be contrary to equity and good conscience; nor shall there be any withholding of recovery of any moneys mentioned in this Act on account of any certification or payment made by any former employee of the United States in the discharge of his official duties unless the head of the department or agency on behalf of which the certification or payment was made certifies to the Commission that such certification or payment involved fraud on the part of such employee.

"ADMINISTRATION

"SEC. 16. (a) This Act shall be administered by the Commission. Except as otherwise specifically provided herein, the Commission is hereby authorized and directed to perform, or cause to be performed, any and all acts and to make such rules and regulations as may be necessary and proper for the purpose of carrying the provisions of this Act into full force and effect.

"(b) Applications under this Act shall be in such form as the Commission shall prescribe, and shall be supported by such certificates from departments or agencies as the Commission may deem necessary to the determination of the rights of applicants. The Commission shall adjudicate all claims under this Act. "(c) Questions of dependency and disability arising under this Act shall be determined by the Commission and its decisions with respect to such matters shall be final and conclusive and shall not be subject to review. The Commission may order or direct at any time such medical or other examinations as it shall deem necessary to determine the facts relative to the disability or dependency of any person receiving or applying for annuity under this Act, and may suspend or deny any such annuity for failure to submit to any such examination. "(d) An appeal to the Commission shall lie from any administrative action or order affecting the rights or interests of any person or of the United States under this Act, the procedure on appeal to be prescribed by the Commission.

"(e) Fees for examinations made under the provisions of this Act, by physicians or surgeons who are not medical officers of the United States, shall be fixed by the Commission, and such fees, together with reasonable traveling and other expenses incurred in connection with such examinations, shall be paid out of the appropriations for the cost of administering this Act.

"(f) The Commission shall publish an annual report upon the operations of this Act.

"(g) The Commission is hereby authorized and directed to select three actuaries, to be known as the Board of Actuaries of the Civil Service Retirement System. It shall be the duty of such Board to report annually upon the actuarial status of the system and to furnish its advice and opinion on matters referred to it by the Commission, and it shall have the authority to recommend to the Commission and to the Congress such changes as in the Board's judg

ment may be deemed necessary to protect the public interest and maintain the system upon a sound financial basis. The Commission shall keep or cause to be kept such records as it deems necessary for making periodic actuarial valuations of the Civil Service Retirement System, and the Board shall make such valuations at intervals of five years, or oftener if deemed necessary by the Commission. The compensation of the members of the Board of Actuaries, exclusive of such members as are in the employ of the United States, shall be fixed by the Commission.

"SHORT TITLE

"SEC. 17. This Act may be cited as the 'Civil Service Retirement Act." SEC. 2. (a) On and after the effective date of this Act persons employed as members of the civilian faculties of the United States Naval Academy and the United States Naval Postgraduate School shall be included within the terms of the Civil Service Retirement Act, and on and after that date the Act of January 16, 1936 (49 Stat. 1092), as amended, shall not apply to such persons.

(b) In lieu of the deposit prescribed by section 4 (c) of the Civil Service Retirement Act, an employee who by virtue of subsection (a) is included within the terms of such Act shall deposit, for service rendered prior to the effective date of this Act as a member of the civilian faculty of the United States Naval Academy or of the United States Naval Postgraduate School, a sum equal to so much of the repurchase price of his annuity policy carried as required by the Act of January 16, 1936, as amended, as is based on the monthly allotments which were registered with the Navy Allotment Office toward the purchase of that annuity, the deposit to be made within six months after the effective date of this Act. Should the deposit not be made within that period no credit shall be allowed under the Civil Service Retirement Act for service rendered as a member of the civilian faculty of the United States Naval Academy or of the United States Naval Postgraduate School subsequent to July 31, 1920, and prior to the effective date of this Act.

SEC. 3. The amendment approved September 30, 1949 (Public Law 310, Eighyfirst Congress), to section 4 (b) of the Civil Service Retirement Act of May 29, 1930, as amended, insofar as it relates to the amount of the reduction in the annuities of officers and employees who elect to receive reduced annuities under such section, shall take effect as of April 1, 1948, but no increase in annuity shall be payable by reason of such amendment, to those who retired on or after April 1, 1948, and prior to October 1, 1949, for any period prior to the first day of the first month which begins after the effective date of this Act.

CONTINUATION OF PRIOR RIGHTS

SEC. 4. Except as otherwise provided, the amendments made by this Act shall not apply in the case of employees or Members retired or otherwise separated prior to its effective date; and the rights of such persons and their survivors shall continue in the same manner and to the same extent as if this Act had not been enacted.

EFFECTIVE DATE

SEC. 5. This Act shall take effect on January 1, 1957.

SHORT TITLE

SEC. 6. This Act may be cited as the "Civil Service Retirement Act Amendments of 1956."

ANALYSIS OF S. 2875, A BILL TO REVISE THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, AS AMEN DED

Section 1 of S. 2875 amends the Civil Service Retirement Act in its entirety. The basic changes made in existing law by S. 2875 are as follows:

SECTION 1. DEFINITIONS

Various terms used throughout the existing law are accompanied either by definitions or by reference to a section which defines the terms. In other instances, regulations, precedent and administrative rulings are relied upon for the meaning of the terms used.

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Section 1 defines terms used throughout the Act. Only three present meanings of terms are changed as follows:

Section 1 (c)

1. "Congressional employee" under present law does not include the Architect of the Capitol and employees of the Architect. S. 2875 includes such employees in the definition of "Congressional employee," thus extending to the Architect of the Capitol and his employees the same retirement benefits that accrue to other groups of legislative employees

Section 1 (d)

2. "Basic salary" is defined under present law to permit the use of military pay in the computation of retirement benefits. S. 2875 would bar the use of military pay for this purpose. This change is proposed because it is deemed inappropriate to permit the rate of annuity upon retirement from a civilian position to be based upon pay from a source other than civilian employment.

(NOTE. This change in no way relates to or changes the present law and practice of crediting military service for retirement purposes.)

Section 1 (1)

3. Under present law, lump-sum payments include retirement deductions, sums deposited by an employee or Member and interest on such deductions and deposits to the date of separation or to the date of entitlement to a deferred annuity or date of death, whichever is earlier except that no interest accrues if the service covered thereby aggregates 1 year or less. S. 2875 defines "lump-sum credit" to end the practice of crediting interest after December 31, 1956, on the theory that to provide the protection afforded by the act and at the same time allow interest on deposits made for the purpose of obtaining protection amounts to dual benefits unwarranted by the circumstances.

Section 2 (b)

SECTION 2. COVERAGE

Judges of the United States are not now specifially excluded from the act. In March 1950, the Judicial Conference stated the opinion that these judges are not subject to the act which is contrary to the view of the Commission. The Senate bill clarifies the matter by specifically excluding these judges as desired by the Judicial Conference.

Section 2 (f)

Under present law the President has authority to exclude executive branch employees whose tenure is intermittent or of uncertain duration. This authority has been delegated to the Civil Service Commission by Executive Order 10530. S. 2875 confers this authority directly upon the Civil Service Commission subject to the restriction that no employee shall be excluded from coverage who has had more than 6 months' continuous service.

Section 2 (h)

The bill contains a provision to safeguard the coverage of persons who were subject to the Civil Service Retirement Act prior to December 31, 1956.

Section 3 (a)

SECTION 3. CREDITABLE SERVICE

At the present time, all periods of separation from the service are excluded from credit for retirement purposes. S. 2875 would exclude only those periods of separation which exceed 3 days. Most of the breaks in service of 1 or 2 days are the result of misunderstanding or clerical error where a transfer takes place over a weekend. This change is made primarily to improve and simplify the administration of the act.

Section 3 (d)

Under existing law, an employee who leaves his position during time of war or national emergency to enter the military service is not considered as being separated from his civilian position for purposes of the Retirement Act by reason of such service in the Armed Forces until termination of military service or until he applies for and receives a refund of his contributions to the retirement fund whichever first occurs.

Many individuals who left civilian employment early in World War II, or even during the emergency period which began in September 1939, are still in the military service-with resultant furlough status from their civilian jobs in accordance with the provisions of the Retirement Act. This means that they can, without returning to civilian employment, continue to accrue civilian retirement time credit and status with title to annuity arising whenever age or disability and service requirements are met.

The entire furlough period is creditable as civilian service for retirement purposes if the individual (1) is not granted military retired pay or (2) is granted retired pay under title III of Public Law 810, 80th Congress, or because of a disability incurred in combat or resulting from an explosion of an instrument of war. Accordingly, the retired pay award under (2) has the effect of giving the employee retirement credit under two systems for the same military career period.

An employee entering military service after June 24, 1948, has restoration rights in his civilian job only if he serves the military not more than 4 years and makes prompt application for restoration, but this application period is extended if he is hospitalized for not more than 1 year after discharge. Thus the 5 years would cover the longest period possible after entering military service for restoration purposes.

The proposed change will affect only those individuals who stay in military service more than 5 years and do not return to civilian employment. The employee who does return to civilian service will receive credit for the military service, unless it forms the basis for a type of retired pay which bars the credit, but in the latter case the time could not be counted even though he was carried on furlough. The termination of furlough after 5 years will prevent the individual from thereafter retiring under the disability provision or from accruing automatic credit for retirement under the Civil Service Retirement Act.

S. 2875 proposes to consider an employee as having been separated from a civilian position when he applies for and receives a refund or at the expiration of 5 years, whichever occurs earlier if he does not return to civilian service. An employee whose 5-year period has already elapsed would be considered as having been separated from his position on December 31, 1956. This change will in no way affect the crediting of military service in the case of persons who, subsequent to their military service, return to and serve in a civilian position covered by the act for a period of at lease 1 year.

Section 3 (g)

A deviation is warranted in the pattern of this analysis in which only changes in existing law are discussed to point out that the bill continues in effect the provision requiring at least 1 year of creditable civilian service subject to the act within the 2-year period preceding separation before retiring individual or his survivors are eligible for annuity based on that separation. Failure to meet this requirement does not deprive the individual or his survivors of any existing rights based upon a previous separation.

Section 3 (i)

The bill allows credit for periods of service performed in the employ of Federal agencies in carrying out relief programs (other than employees from relief rolls) or of a State or instrumentality thereof in carrying out fedeally authorized and financed programs in the case of an employee who subsequently becomes subject to the act. Such service would be allowable only if the employee has to his credit at least 5 years of other allowable service and shall have made a deposit therefor in the amount which would have been deducted had he been subject to the act. Also such service would be allowable only if excluded from credit for purposes of a State annuity.

The inclusion of this provision accomplishes the purpose of S. 1041, vetoed by the President on August 17, 1955.

Section 4 (d)

SECTION 4. DEDUCTIONS AND DEPOSITS

Under present law when an employee in a position subject to another retirement system transfers to a position subject to the Civil Service Retirement Act, he receives credit for time in the first position whether or not he makes an appropriate deposit to the retirement fund for such period of time.

The bill would require each Member or employee who had received a refund of retirement deductions under another retirement system to redeposit such refund with interst before any credit would be allowed under the Retirement Act for service covered by the refund. Adoption of this provision will prevent employees from receiving "windfalls" under certain conditions.

Section 4 (e)

Under existing law no interest is required covering periods of separation from the service in the case of deposits made by employees to cover periods for which no deductions were made or for which a refund was received. The bill provides that interest must be paid for periods of separation from the service as well as for periods of service. Interest would thus be charged for all periods during which the employee enjoyed the use of the money. The retirement fund would be earning interest on the money if it had been deposited into the fund.

Section 5 (a)

SECTION 5. MANDATORY SEPARATION

Under existing law an employee must be separated from the service on the last day of the month in which he attains the age of 70 years or completes 15 years of service if then beyond such age. The bill eliminates the 15-year requirement and would provide for automatic separation at age 70, regardless of length of service. At the present time, the mandatory retirement age for employees of the Alaska Railroad in the Territory of Alaska and citizen employees employed on the Isthmus of Panama by the Panama Canal or the Panama Railroad Company is 62 years with 15 years of service. The bill eliminates the special separation provisions relating to these employees so that hereafter they would be subject to the same mandatory separation provisions as other employees.

Section 5 (d)

Continues in effect the exemption of Members, Congressional employees and employees in the judicial branch from the mandatory separation provision.

Section 6 (b)

SECTION 6. IMMEDIATE RETIREMENT

Under present law a reduced annuity is paid upon separation for any reason after attaining age 55 and serving 30 years. S. 2875 would permit retirement after 30 years of service at any age. However, if the employee is under the age of 60 at the time of retirement, the annuity is on a reduced scale based on the number of months the employee is under 60 years of age at the time of retirement. Section 6 (c)

Under existing provisions relating to the retirement of employees whose duties are primarily the investigation, apprehension or detention of persons suspected or convicted of offenses against the criminal laws of the United States, the Civil Service Commission is required to give full consideration to the degree of hazard to which the employee is subjected in the performance of his duties, rather than the general duties of the class of the position held by the employee. Under the Senate bill the head of a department or agency would likewise be required to give consideration to these factors in recommending the retirement of an employee under these provisions. This change has the effect of tightening up the provisions of present law under which certain employees may retire with less than the usual number of years of service.

The bill defines the term "detention" for purposes of these provisions so as to include the duties of all officers and employees in the field service of the Bureau of Prisons (Federal Prison Industires, Inc., and officers and employees of the Public Health Service assigned to such field service and all other officers and employees of the Bureau of Prisons and Federal Prison Industries, Inc., whose duties in connection with persons in detention suspected or convicted of offenses against the criminal laws of the United States or the District of Columbia, or against the punitive articles of the Uniform Code of Military Justice, involve direct contact with such persons in their direction, supervision, inspection, training or employment. This provision carries out the purpose of S. 65 which was favorably reported by the committee and passed by the Senate on July 30, 1955, and is now pending in the House.

Section 6 (d)

Under present law a void exists with respect to employees with 20 or more years but less than 25 years service who are involuntarily separated through no fault of their own. Employees who have over 20 years of service cannot withdraw their deposits from the retirement fund and because they have less than 25 years of service, they do not have entitlement to an immediate annuity. S.

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