Mr. BLEDSOE. Thank you, Senator. That condition is rather widespread.

Senator NEUBERGER. I have run into quite a number of them, and it just seems to me, Mr. Bledsoe, that it is rather harsh to penalize someone when just the matter of an arbitrary date more or less intrudes in the situation.

Mr. BLEDSOE. Yes.

Senator NEUBERGER. That is all I have, Mr. Chairman.

Senator SCOTT. Thank you.

Mr. KERLIN. Mr. Chairman, for the record, there are approximately 40,000 such situations.

Senator Scort. Thank you very much, Mr. Bledsoe.

Mr. BLEDSOE. Thank you, gentlemen.

Mr. BRAWLEY. Mr. Ross Messer, legislative representative of the National Association of Post Office and General Services Maintenance Employees.

STATEMENT OF ROSS A. MESSER, LEGISLATIVE REPRESENTATIVE, NATIONAL ASSOCIATION OF POST OFFICE AND GENERAL SERVICES MAINTENANCE EMPLOYEES

Mr. MESSER. Mr. Chairman, I know you have a lot of other witnesses, so I would like to make a few comments and insert my statement as if read.

Senator SCOTT. If there is no objection, that will be done. (The above-mentioned document is as follows:)

STATEMENT OF Ross A. MESSER, LEGISLATIVE REPRESENTATIVE, NATIONAL ASSOCIATION OF POST OFFICE AND GENERAL SERVICES MAINTENANCE EMPLOYEES Thank you, Mr. Chairman and members of the committee, for this opportunity to appear before you today. My name is Ross A. Messer and I am legislative representative of the National Association of Post Office and General Services Maintenance Employees, representing the custodial employees of the postal field service and General Services Administration.

I wish to take this opportunity to thank Senator Johnson for his interest in the Civil Service Retirement Act, its application, and for introducing S. 2875, a bill to revise the Civil Service Retirement Act. I also wish to thank you Mr. Chairman, and the members of the subcommittee for your interest in the subject of civil-service retirement and its liberalization.

The Civil Service Retirement Act has, in our opinion, needed liberalizing for a number of years. It has not kept pace with the liberalization of other retirement or old-age survivorship systems as it has not been revised since 1948, although other systems have been revised since that date. S. 2875 liberalizes the method of computing annuities for future retirees, for employees retired on disability, and for surviving dependents.

Our association has for a number of years favored retirement after 30 years of service, on a full annuity, regardless of age. The present law requires a reduction of one-fourth of 1 percent for each full month the retiring employee is under age 60. Section 9 (d) of S. 2875 would change the present formula to onetwelfth of 1 percent per month up to 30 months, one-eighth of 1 percent for each month in excess of 30 and up to 60, and one-sixth of 1 percent per month for each month in excess of 60 that the employee is under age 60 at the time of retirement. We are still of the opinion that the committee should give consideration to retirement upon the completion of 30 years, on full annuity, regardless of age. Section 9 (a) of S. 2875 liberalizes the method of computing annuities by allowing 2 percent of the average salary multiplied by total service as compared with 12 percent of average salary multiplied by total service, while retaining the feature of 1 percent of the average salary plus 25 multiplied by the total of years of service for the employees with lower salary averages.

Employees with short periods of service who were forced to retire on disability have been unjustly treated due to the way their annuities were computed. Section 9 (a) liberalizes the method of computing disability retirement by allowing (1) at least 40 percent of the average salary or (2) the sum obtained by computing his salary in the normal method after increasing his total service by the period lapsing between the date of separation and the date the employee attains the age of 70, whichever is the lesser. This is a great improvement over the present law and will materially assist those retiring on disability.

Section 10 of S. 2875 liberalizes the benefits to survivors of an annuitant or an employee who dies while in the service. The proposals in section 10 greatly improve the benefits paid today; however, it is believed that after careful study the benefits could be increased even beyond those proposed in section 10.

There are certain features of the bill with which we do not agree. Section 5 (a) provides that an employee shall be automatically separated from the service on the last day of the month in which he attains the age of 70 and all salary shall cease from that date. The present law allows employees reaching age 70, who have not completed 15 years of service, to continue in the service until they have completed 15 years of service. Section 5 (a) would change this by requiring the separation of an employee at the end of the month in which he becomes age 70. Public Law 112, 84th Congress, section 108, Independent Offices Appropriations Act, 1956, removed the age limit requirements for appointment to civil-service positions. It seems quite strange that an employee could be appointed to a position even though he was 69 years of age, which would not give him sufficient time to earn civil-service retirement coverage by age 70; however, we do feel that an employee who has received a regular civil-service appointment should be allowed to remain in the position until he has served a sufficient period of time to be covered by the Civil Service Retirement Act. With this thought in mind, we would like to suggest an amendment to section 5 (a), page 14, line 15, by inserting the following language immediately following the "comma": "Provided the employee has completed 5 years of civilian service.”

Section 9 (a), page 21, line 16, provides that the annuity shall not exceed 75 percent of the average salary, which is a change from the present law which provides that the annuity shall not exceed 80 percent of the average salary. In our opinion, the lowering of the maximum annuity from 80 to 75 percent will hurt employees who have a low average salary. It is believed that the 80 percent maximum annuity should be allowed to continue on any annuity which is not more than $100 per month. The lowering of the maximum from 75 to 80 would reduce the annuity for some hourly rate postal employees who are employed for only a few hours per week. We would like to suggest an amendment to section 9 (a), page 21, line 17, by inserting the following language after the word “salary"; "Except that any annuity of $100 or less per month shall not exceed 80 percent of the average salary."

The administration has recommended coordination between the civil-service retirement system and the Social Security Act. In 1954 the Civil Service Commission released certain information from the Committee on Retirement Policy for Federal Personnel, relative to coordination of the civil-service retirement system with the Social Security Act. All of the information distributed by the Civil Service Commission was reproduced and distributed to the various locals of our association for their study and comments. The reproduced material was also distributed to all the delegates in attendance at our 1954 national convention in Detroit, Mich. After considerable study and debate on the proposal as outlined by the Civil Service Commission in 1954, our convention voted to oppose any coordination with, or underwriting of, the Civil Service Retirement Act by the Social Security Act. The position of this association has not changed since 1954; therefore, we are opposed to the administration's proposal to coordinate the Civil Service Retirement Act and the Social Security Act, as set forth in S. 3041.

It seems very strange to us that the Civil Service Retirement Act cannot be liberalized to provide the same benefits as the Social Security Act, when the Government employees are contributing, and have been contributing for a number of years, 6 percent of their salary to the retirement system, while employees in private industry are contributing only 2 percent, and will eventually, in 1957, contribute 4 percent to social security.

I would like to place our association on record as favoring the principles set forth in S. 2875, with the two amendments which we have suggested and other beneficial or clarifying amendments offered by other employee groups as they may apply in their particular cases. It is hoped that the subcommittee will

favorably report S. 2875 with the necessary corrective and clarifying amendments, to the full committee, where the bill will be favorably acted upon and reported to the Senate for action.

I wish to again thank you, Mr. Chairman, and members of the committee, for the opportunity of appearing before you today to express the views of our association on S. 2875.

Mr. MESSER. We are wholeheartedly in favor of the Johnston bill. There are two features that we would like to have considered.

One is the mandatory retirement at age 70, regardless of years of service, and this appears quite strange, in view of the fact that Public Law 112 of the 84th Congress removed the age limit for appointment in the Government service and people can be appointed past age 70 now, but you would require other people who were appointed below age 70 to be separated at age 70.

The second item is the change from 80 to 75 percent of the annuity. We do not believe that this should be applied on annuities of less than $100 per month as that would definitely affect the employees in the lower pay levels with long periods of service.

We would suggest that that be included, and, sir, I would like to say that we are opposed to the coordination, underwriting, substituting, or whatever you might want to call it, of the Social Security and the Retirement Act.

Senator CASE. Are there any questions?

(There was a negative response.)

Senator CASE. Thank you very much.

Mr. BRAWLEY. William H. Ryan.

STATEMENT OF WILLIAM H. RYAN, PRESIDENT OF DISTRICT NO. 44, INTERNATIONAL ASSOCIATION OF MACHINISTS, AFL-CIO

Mr. RYAN. Mr. Chairman, I am W. H. Ryan, president of district No. 44, International Association of Machinists. I represent that portion of over 900,000 members of our association who are Federal employees.

In order to conserve the time of the committee and not be accused of being repetitious, with your permission, I would like to submit for the record my prepared statement and also make a very short verbal statement.

Senator CASE. Without objection, that may be done. (The above-mentioned document is as follows:)

TESTIMONY OF W. H. RYAN, PRESIDENT OF DISTRICT No. 44, INTERNATIONAL ASSOCIATION OF MACHINISTS

Mr. Chairman and members of the Senate Post Office and Civil Service Subcommittee, district No. 44 of the International Association of Machinists membership is composed of that portion of 900,000 members of the IAM AFLCIO who are employed as skilled employees by the Federal Government in Navy yards, arsenals, Air Force activities, Bureau of Engraving and Printing, Government Printing Office, Alaskan Railroad, Panama Canal Company, mail equipment shops of the Post Office Department, Coast Guard stations and various hydroelectric activities under the Department of Interior.

Our organization heartily endorses S. 2875 which is under consideration of this subcommittee. After carefully analyzing the subject bill we recognize it as a proposed piece of legislation which, if enacted, would provide many overdue improvements in the present retirement statute.

Our organization has for many years supported many of the realistic proposed changes in the act of May 29, 1930, which are embodied in S. 2875.

Our membership is especially pleased to note that these amendments are being made to the basic Retirement Act without coordinating same with the Social Security Act. Our national conventions have consistently recorded themselves as opposed to any coordination of the Civil Service Retirement Act with the Social Security Act (as proposed by S. 3041).

Our organization is of the firm belief that the Civil Service Retirement Act can be amended and improved year by year to meet the needs of changing economic standards without coordination with the Social Security Act. We believe, however, that these necessary changes could be realized without creating apprehension amongst those who are concerned over the funding of the civilservice retirement system if some legislative means could be found to require the Federal Government to apropriate and pay into the fund each year the actuary estimates of the Government's monetary obligations to the fund. Our organization endorses the realistic changes proposed by S. 2875 which relate to

1. The new formula for computing future retirees annuities;

2. The lessening of annuity penalties for retiring after 30 years' service after attaining age 55;

3. Increase in ceilings on annuities to surviving children and widow and/ or dependent widower;

4. The lessening of penalties for dependents and survivor coverage; 5. Immediate survivor annuities to widows upon demise of their husbands;

6. Guaranteed percentage minimum annuity for employees retired on disability;

7. Immediate reduced annuities for employees involuntarily separated after 20 years' service and attainment of age 50.

Our organization suggests that S. 2875 be amended in the interest of clarification on one point, and in the interest of relieving proposed and present conditions which we believe not to be proper.

On the point of clarification, we recommend and urge that under section 1 titled "Definitions," that the term "basic salary” and “average salary" be clarified to state that longevity pay is to be considered as a part of the base salary and average salary as it applies to the act. It is our understanding that longevity pay has been an issue of legal interpretation under the Retirement Act, and we believe that a firm definition written into the law would forestall future misunderstandings and questions on the inclusion of such pay in computing deductions and retirement benefits. This clarifying language could be made by writing in appropriate language after the proviso in subparagraph (d) of section 1 of S. 2875.

Subparagraph (d) of section 7 of S. 2875 would place an earning restriction on a disability annuitant. We believe this provision to be unfair to those disability annuitants who may be making an effort to rehabilitate themselves by engaging in such employment as the operation of newsstands or other limited forms of rehabilitation employment.

The provisions of said paragraph could possibly be construed to mean that income from investments which have no relation to the disability annuitant's earnings from Government employment could be the cause of disqualifying the person for disability annuity. We therefore recommend that the last sentence of subparagraph (d) of section 7 be stricken from the proposed legislation. Subparagraph (f) of section 7 of S. 2875 contains language which is now in effect in the Civil Service Retirement Act of May 29, 1930, as amended; which has caused a very unfair condition to exist for those persons who have a permanent partial loss of the use of a member of their body. The present retirement law has been construed by the Civil Service Commission and the Bureau of Employees Compensation to forbid the concurrent payment of annuity and disability awards to an employee retired under section 1 (a) of the Civil Service Retirement Act.

In other words, the position has been taken that employees who have earned full retirement rights based upon 30 or more years of service, and 62 years of age or over cannot also receive payments from the employees' compensation fund for a compensation award for the permanent partial loss of the use of a hand or leg.

We believe this to be a very unfair restriction because such employees have earned their full retirement rights under section 1 (a) of the civil-service retirement law but because of their disability they are placed in the position of having

to pay for services which they cannot perform in connection with their private lives.

For instance, many of these persons cannot perform normal personal duties because of their permanent partial disability; therefore we believe that they should continue to receive compensation payments concurrently with retirement annuities which they have earned.

The referred-to inequity could be corrected by amending section 6 of the existing civil-service retirement law and section 7 of S. 2875, to permit the concurrent payment of awards for the permanent partial loss of the use of the members of the body (losses which were incurred in the line of Federal employment) from the employees' compensation fund, and earned retirement annuities from the civil-service retirement fund.

I am certain that the Congress did not intend to consider that retired civilservice employees be considered as persons who should not enjoy the use of all members of their anatomy upon earning full retirement.

We earnestly urge your committee to incorporate our suggested changes in S. 2875 and to favorably report the bill to the full committee.

Senator CASE. May I ask you as to what portion and how many of this 900,000 members are Federal employees?

Mr. RYAN. We do not have our membership broken down to the number of Federal employees as against the total number of our organization.

There have been several attempts to do that, but with the fluctuation of employment in our group which is made up of subscribed membership-and if you can appreciate how during the times of emergency our Federal employee membership climbs very, very high, and then it recedes with the reductions in force that take place afterwards.

Mr. Chairman and members of the committee, our organization heartily endorses the provisions of S. 2875, and our organization being a member of the Government Employees' Council, we endorse the statement made yesterday by Mr. Jerome Keating, chairman of our retirement committee, and Mr. Thomas G. Walters, the operations director of the Government Employees Council, AFL-CIÓ.

We have one point, however, in S. 2875 which we would like to call to the attention of the committee and also I might say that the particular provision appears in existing law: Subparagraph (f) of section 7 of S. 2875 contains language which is now in effect in the Civil Service Retirement Act of May 29, 1930, as amended; which has caused a very unfair condition to exist for those persons who have a permanent partial loss of the use of a member of their body. The present retirement law has been construed by the Civil Service Commission and the Bureau of Employees Compensation to forbid the concurrent payment of annuity and disability awards to an employee retired under section 1 (a) of the Civil Service Retirement Act.

In other words, the position has been taken that employees who have earned full retirement rights based upon 30 or more years of service, and 62 years of age or over cannot also receive payments from the employees compensation fund for a compensation award for the permanent partial loss of the use of a hand or leg.

We believe this to be a very unfair restriction because such employees have earned their full retirement rights under section 1 (a) of the civilservice retirement law but because of their disability they are placed in the position of having to pay for services which they cannot perform in connection with their private lives.

For instance, many of these persons cannot perform normal personal duties because of their permanent partial disability; therefore,