Section 6 (c) continues and extends the present provisions for the retirement, at age 50 with 20 years' service under certain conditions, of employees engaged in the investigation, apprehension, or detention of persons suspected or convicted of offenses against the criminal laws of the United States.

There are a number of occupations in the industrial and other establishments of the various departments and agencies which would seem to merit equal consideration under these provisions because of their hazardous nature from the standpoint of accident frequency as well as the effect on general health. Therefore, we suggest that section 6 (c) of S. 2875 be amended so as to include those classes of employees whose occupations require hazard-rate premiums under life-insurance policies issued by the major insurance companies.

Section 9 of the bill provides three different methods for the computation of annuities depending on the title of the position and the branch of Government under which the service is rendered. Since all such service is rendered, ultimately, for the same Government, and since deductions from salary, under section 4 (a) are identical for all under the system, we fail to find ample justification for more than one method of computation.

We, therefore, respectfully urge that section 9 of S. 2875 be amended so as to provide for the computation of all annuities under the Civil Service Retirement Act, on the basis of 21/2 percent of the basic salary for any 5 consecutive years of creditable service multiplied by the total number of years and months of such service, with the proviso that the total amount of annuity shall not exceed 75 percent of such 5-year average salary.

The Civil Service Commission's Retirement Report for the Fiscal Year Ended June 30, 1954, shows in table C-8, that of the 60,573 survivor annuitants on the roll at that time, 56,882 were receiving annuities under $100 per month, 37,561 were receiving less than $50 per month, and 4,034 were receiving less than $10 per month.

These circumstances would seem to amply justify a provision for minimum survivor annuities under the Civil Service Retirement Act. Therefore, we urge that section 10 of S. 2875 be amended so as to provide for the establishment of minimum annuities, in all survivorship cases, on the basis of a minimum credit of 15 years' service, but not exceeding an annuity equal to 40 percent of the average salary. At least one other system for the retirement of Federal employees, the Foreign Service retirement system, has had such provisions since

1946.

Many Federal employees do not have coverage, other than that provided by the Civil Service Retirement Act, which would provide protection for their families after death. This protection, as now provided, ceases immediately after the employee's separation, unless he retires at that time.

Most other systems, under which coverage might be secured after separation, require varying periods for qualification. The major public system, social security, requires coverage for at least 18 months to provide qualification for family benefits.

Since the separated employee, who dies between separation from the protection of the civil-service system and the time required to gain coverage, is "caught in a squeeze," it seems only fair that the protection of one system should be extended for at least a limited time to allow qualification for other protection.

We, therefore, recommend that section 10 of S. 2875 be amended to provide for the continuation of the family benefits of the act for at least 18 months following separation of the employee for purposes other than retirement.

For many years the subject of tax exemption for civil-service annuities has been the basis of much discussion and proposed legislation. Finally, a measure of relief was provided in the Internal Revenue Act of 1954, Public Law 591, 83d Congress, which allows a tax credit at the first increment rate on up to $1,200 of the annuity less the amount of any annuity or pension received under the Social Security or Railroad Retirement Acts and subject to certain earned-income restrictions.

Under these other two major retirement systems, also administered by the Federal Government, the maximum amounts excluded from taxation are much greater than the credit allowed civil-service annuitants and apply to a vastly larger segment of our citizens.

In fact, benefits under the Social Security Act are now exempt on amounts which may be as great as $2,400 per annum and on benefits under the Railroad Retirement Act which will be as much as $3,129.60 by 1976 without change in present law.

In view of the cited precedents, and in the belief that relief from taxation should be extended on an equal basis to all our senior citizens, we urgently suggest that section 15 of S. 2875 be amended so as to provide for the tax exemption of civil-service annuities in amounts at least equal to the amounts exempted from taxation under other major federally administered systems.

Mr. BRAWLEY. Mr. Dorson, this committee might be in favor of that kind of an amendment, but it is completely beyond our jurisdiction. We have no jurisdiction at all on that.

Mr. DORSON. I understand that the committee does not assume jurisdiction on tax problems. However, it has somewhat in the past, without very much success, and it is true that the only change in that did come through the Ways and Means Committee and the Finance Committee of the Senate.

However, since that particular section of the bill, section 15, does seem to be intended to cover it and although it has not been so applied-we thought it pertinent to comment on that particular point. Mr. BRAWLEY. All right.

Mr. DORSON. The policy of not making major changes in the Civil Service Retirement Act retroactive as to application, while admittedly desirable from an administrative standpoint, has created many inequities and much dissatisfaction among those who retired or were separated with deferred annuity rights prior to the effective date of such changes. In addition, such a policy has been the major cause of the problem of adjusting annuities with which the Congress is faced periodically.

To eliminate many of the inequities and much of the dissatisfaction that we believe will be created by the provisions of S. 2875, we suggest that the bill be amended by striking out the present language of section 4, beginning on line 13 and ending on line 18, on page 40, and inserting in lieu thereof the following:

SEC. 4. In the case of those who before the effective date of this Act shall have been retired, or separated with title to deferred annuity, their rights shall be determined and annuity adjusted under this Act with proper weight being given to the increases in the average salaries of the position which forms the basis for their annuities, but this Act shall not be construed as to reduce the annuity of any such retired person nor shall any increase in annuity commence before the effective date of this Act.

The inclusion of such a provision in a major revision of the Civil Service Retirement Act is not entirely without precedent. The act of May 29, 1930, Public Law No. 279, 71st Congress, cited as the present organic act, contained a similar provision in section 8.

Mr. Chairman, with the amendments herein suggested, our organization requests the early enactment of S. 2875 and urges its favorable consideration by the committee of the Congress.

We thank the subcommittee for the opportunity afforded us to express the views of our organization.

Mr. BRAWLEY. Mr. Kerlin, do you have any questions?
Mr. KERLIN. No.

Mr. BRAWLEY. Thank you very much.

The next witness is Mr. George Warfel.

STATEMENT OF GEORGE WARFEL, PRESIDENT, NATIONAL ASSOCIATION OF SPECIAL DELIVERY MESSENGERS

Mr. WARFEL. I would be glad to present my statement for the record which is just an endorsement of the bill.

Mr. BRAWLEY. You may read it or wait until the next hearing. Mr. WARFEL. I will present it right now.

(The above-mentioned document is as follows:)

STATEMENT OF GEORGE L. WARFEL, PRESIDENT OF THE NATIONAL ASSOCIATION OF SPECIAL DELIVERY MESSENGERS

Mr. Chairman and members of the committee, I am George L. Warfel, president of the National Association of Special Delivery Messengers with headquarters at 112 C Street NW., Washington, D. C. Our membership is deeply appreciative of the active interest shown by Members of Congress in the introduction of the various bills seeking to liberalize the Civil Service Retirement Act. We also express our thanks to Chairman Johnston and the members of this committee for getting these hearings underway, and for this opportunity to express our views.

We wholeheartedly endorse the principles of S. 2875. First, because it provides for many just and greatly needed improvements in present law for which our national conventions have gone on record; and second, for the reason that it seeks to maintain the Federal civil-service retirement system separate and apart from social security (OASI), with which objective we are in complete accord and consider of the utmost importance. We see no necessity for such "coordination" as is provided by the bill S. 3041 in order to obtain (1) full coverage for all employees, or (2) the much-needed increase in annuities and the survivorship benefits which are a part of S. 2875.

While endorsing the principles and objectives of S. 2875 we respectfully recommend the following amendments which we trust may receive full consideration by the committee:

(1) That basic pay be specified to include longevity, overtime and night differential.

(2) That section 7 (d) relating to disability retirement be so amended as to exclude the penalties imposed on disabled annuitants by the present wording. (3) Inclusion of widows' annuity for those employees who retired between April 1, 1948, and October 1, 1949.

(4) While this bill greatly reduces the penalty imposed on those who retire before age 60 with 30 years, service, we urge that all penalty be removed, making it possible to retire at full annuity after 30 years' service, regardless of age.

(5) That in section 9 (line 16, p. 21) 75 percent be stricken out and 80 percent substituted, which is as in the present law.

Mr. Chairman, I again thank you for this opportunity to make these recommendations and trust that the committee will favorably act on the bill.

Mr. WARFEL. All I wish to say is that we appreciate the work of the committee and the committee staff and the work of the chairman in arranging for these early hearings, and are glad to endorse the bill in principle.

Mr. BRAWLEY. Thank you, sir.
Mr. Charles Puskar.

STATEMENT OF CHARLES E. PUSKAR, EXECUTIVE SECRETARY, NATIONAL ASSOCIATION OF POSTMASTERS; ACCOMPANIED BY EDWARD J. QUIGLEY, POSTMASTER AT BROOKLYN, N. Y.

Mr. PUSKAR. We will proceed with our presentation in summary form, Mr. Brawley, if that is all right, because it will only take about 4 minutes, and Mr. Quigley came all the way from Brooklyn to be here. For the record my name is Charles E. Puskar. I am the postmaster at Imperial, Pa., and executive secretary-treasurer of the National Association of Postmasters of the United States.

In this latter capacity, I am representing John F. Fixa, postmaster of San Francisco and the president of our organization. I would also like to introduce the gentlemen accompanying me today: Postmaster Edward J. Quigley, of Brooklyn, N. Y., who is here today in his capacity as chairman of the public relations committee of our organization, and Mr. George W. Grader, who is administrative assistant in charge of the Washington office of our association.

Mr. Chairman, we have 33,698 members, which is slightly more than 88 percent of the 38,000 postmasters in the United States, and we are grateful to you and the members of your committee for this opportunity to express our views regarding the civil-service retirement system. The National Association of Postmasters has long advocated more liberal retirement benefits for Federal employees, and we want to go on record as approving in principle the benefits embodied in S. 2875, known as the Johnston retirement bill.

We feel that the formula for computing annuities in S. 2875 would bring retirement benefits more equitably in line with those existing in private industry today, and many other liberalizing features of the bill, in our opinion, are long past due.

Postmasters today, more than ever before, feel secure in their jobs under the Ramspeck-O'Mahoney Act, and, like all Federal personnel with civil-service status, can look forward to a life career in the postal service as long as they efficiently and conscientiously manage their respec respective offices. That fact makes the liberalization of the civilservice retirement system of paramount importance to us.

It has been said that the bill would cost approximately an additional $521 million. As responsible citizens and as postmasters, it is natural that we are somewhat apprehensive as to whether the fiscal condition of our Government could absorb that total cost.

In view of the liberal benefits we would receive under the bill, it is my opinion that the large majority of our members would have no objection to paying an additional amount above the 6 percent of our salaries presently being paid into the civil-service retirement fund, in order to lower the net cost to the taxpayers of our Nation,

It has been said that an additional cost of approximately one-half billion dollars may jeopardize the fiscal policy of the Nation by placing the Nation's indebtedness dangerously close to the national debt ceiling. Therefore, we recommend that provisions be made in the bill for financing the total cost of the bill, in order to reduce the possibility of an objection on a financial basis by the executive branch of the Government. In that respect, I was happy to hear Mr. Brawley explain why it was not possible to put that in that bill.

It is now my pleasure, Mr. Chairman, with your permission, to present Postmaster Edward J. Quigley, of Brooklyn, N. Y., chairman of our public relations committee, for further testimony.

Mr. QUIGLEY. Mr. Chairman, members of the committee, for the purpose of the record, I am Edward J. Quigley, postmaster at Brooklyn, N. Y., and chairman of the public relations committee of the National Association of Postmasters of the United States.

You have been patient and generous in allowing the representatives of the various postal organizations to submit testimony relative to the civil-service retirement system during this hearing. It has been pointed out by various witnesses here that liberalization of our retirement system is much needed.

The members of our association concur with that opinion. It has been noted that no complete revision has been made in the Civil Service Retirement Act since it was enacted in 1920. In the ensuing years the cost of living has more than doubled and we feel that the Johnston bill, S. 2875, will help to alleviate the unfair condition that presently

exists.

We feel that the outstanding feature in the Johnston retirement bill is the more liberal factor for the computation of retirement benefits, and we heartily endorse that principle.

However, as pointed out by Mr. Puskar, we also feel that it is our responsibility to recommend some means of helping to finance the cost of the bill. For that reason, I concur that it would not be objectionable to a large majority of our members to increase our contribution to the civil-service retirement fund to offset at least a part of the cost of the increased benefits.

The means of financing the bill is necessarily the responsibility of Congress and the executive branch of the Government. However, we feel that the method of financing should be spelled out in the bill itself. Postmasters, like any other Federal employees, are not unwilling to accept the liberalized retirement plan, but on the other hand, feel that it is legislation that is long past due.

However, as responsible citizens, we feel that some method of financing the cost of the bill is also our concern.

On behalf of our approximately 34,000 members, we thank you for having given us the opportunity to testify at these hearings, and we are indebted to the members of this committee for the consideration and courtesy shown us.

Mr. BRAWLEY. Thank you very much.

Mr. Thurmond Darr.