sion 883, if you wish to testify or have testimony presented in your behalf. Pursuant to rule 6 of the committee, 25 copies of proposed testimony should be filed with the committee not later than January 30. Senator SCOTT. Mr. Philip Young of the Civil Service Commission. You just go ahead, Mr. Young. STATEMENT OF HON. PHILIP YOUNG, CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION Mr. YOUNG. Thank you, Mr. Chairman. I have a prepared statement which I would like to read. Mr. Chairman, I am glad to have this opportunity of explaining to you the administration's carefully considered views with regard to retirement legislation affecting Federal employees. The enactment of S. 2875 would not be in accord with the program of the President. This position is taken because, first, the increase of more than one-half billion dollars in retirement costs which would result from the liberalization of benefits proposed by S. 2875, andSenator LANGER. Wait a minute, Mr. Young. I have in my office the platform of the Republican Party where it said they were going to increase these retirements. Do you mean to say that the President is against it now? Mr. YOUNG. It said that an increase of one-half billion dollars in retirement costs which would result from the liberalization of the benefits in S. 2875 is not in accord with the President's program. Senator LANGER. Well, how much would it be? Would $75 million be Mr. YOUNG. No; I cannot give you a figure on that. I think that is a problem of the Bureau of the Budget, Senator, rather than for the Civil Service. Senator LANGER. The Republican platform says you were going to increase retirement benefits. Mr. YOUNG. As we look at these various bills on retirement, I think, Senator, including the proposal of the administration, you will find an increase in benefits is evidenced. Senator LANGER. Pardon me for interrupting. I wanted to get your attitude, I wanted to know if you were going to stay with the platform or cut it out. Mr. YOUNG. Secondly, the bill would not resolve the problems currently arising from lack of coordination between the civil service retirement system and the old-age and survivors insurance provisions of the Social Security Act. In view of this position, Mr. Chairman, I am not including in my statement detailed comments and recommendations concerning the many and varied provisions of S. 2875. The Congress, by act of July 16, 1952, Public Law 555, the 82d Congress, created the Committee on Retirement Policy for Federal Personnel and directed that it make a comparative study of all retirement systems for Federal personnel and report to the Congress. During the past 3 years great time and effort and appropriations in the amount of $217,800 have been expended in a comprehensive study of all aspects of the subject of retirement benefits for Federal employees. Its report, as directed by the Congress, was to include findings and recommendations regarding the following: 1. The types and amounts of retirement and other related benefits provided to Federal personnel, including their role in the compensation system as a whole Senator LANGER. Could I get that figure again, how much you spent? Mr. YOUNG. $217,800. This is what the Congress appropriated to this Committee which was established, Senator, for the study of retirement systems. Senator LANGER. Thank you. Mr. YOUNG. Secondly, the Committee was directed by the Congress to include in its findings and recommendations the necessity for special benefit provisions for selected employee groups, including overseas personnel and employees in hazardous occupations; 3. The relationships of these retirement systems to one another, to the Federal employees' compensation system, and to such general systems as old-age and survivors insurance; and 4. The current financial status of the several systems, the most desirable methods of cost determination and funding, the division of costs between the Government and the members of the systems. and the policies that should be followed in meeting the Government's portion of the cost of the various systems. President Truman appointed Mr. H. Eliot Kaplan, a recognized expert in the field, to serve as Chairman of that Committee. President Eisenhower continued Mr. Kaplan in this position. The ex officio members of the Committee were the Secretary of the Treasury, the Secretary of Defense, the Chairman of the Board of Governors of the Federal Reserve System, the Director of the Bureau of the Budget, and the Chairman of the Civil Service Commission. Between the time of its formal organization in 1952 and the date of its termination, June 30, 1954, this committee made a thorough study of all retirement systems, civilian and military, affecting Federal and District of Columbia personnel. Its report to Congress, made in five parts, is printed as Senate Document No. 89 of the 83d Congress. The committee found, Mr. Chairman, that the major Federal employee retirement problem existing today is a lack of coordination. between the civil service retirement system and the old-age and survivors insurance system. Senator LANGER. Mr. Chairman, if I may ask a question. Of course, this committee could do it themselves, who did they employ to make this investigation? Mr. YOUNG. They had their own independent staff. Senator LANGER. Who were they? Mr. YOUNG. I cannot give you the names of them now. I would be glad to supply it for the record if you would like to have it. It is listed in the copy of the report if anyone here has a copy of the report. Senator LANGER. But I want to know who made the investigation. Were they friendly to these retired people or unfriendly? Mr. YOUNG. I think they were impartial. It was a factual, realistic study of the problems involved in the retirement systems. Senator LANGER. Were you on the committee? Mr. YOUNG. A member of the overall committee. Senator LANGER. Could you tell us whom you employed? Mr. YOUNG. As I say, Senator, I cannot give you the names now. This committee disbanded in June 1954. They are printed in Senate Document No. 89 which is the report of the committee, I am sure, and I will be glad to supply them for the record or to you personally if you would like to have them. Senator LANGER. I wish you would supply them. I want to find out who those men and women were who made that investigation. If I may have it in the next day or two I would appreciate it. Mr. YOUNG. We can give it to you today, Senator, because I think your office probably has a copy of the report. If they do not have a copy of that report we will supply it. Mr. BRAWEY. We have a copy of it, Senator. I will send and get it now. Senator LANGER. I want to find out who did that work. I am sure Senator Scott would be interested, too, to know who made that investigation, I imagine. Pardon my interruptions, Mr. Young. Mr. YOUNG. Certainly. Shall I continue, Mr. Chairman? Mr. YOUNG. The civil-service retirement system is a staff retirement plan for about 90 percent of all Federal employees which provides annuity benefits in amounts related directly to length of Federal service and to salary earned. As a part of the personnel policy of the Government, it fulfills three major objectives: First, it serves as an inducement for the best qualified people to enter and make a career of Federal service. Secondly, it provides a humane method of separating superannuated employees by retiring them on annuity. Thirdly, it provides career employees with security against want in old age. The old-age and survivors insurance, on the other hand, provides benefits geared primarily to social need. Benefits are not proportional to length of service for one employer or to total service. May I point out, Mr. Chairman, excuse me, there is a typographical error. That word should be "employer," not "employee" in the third line of that paragraph. Amounts payable are weighted heavily in favor of low-salaried employees. Maximum benefits may be payable after nominal coverage. Mr. Chairman, the concept of coordination of civil-service retirement with social security is in no way inconsistent with the objectives of the staff plan. Social security, with its concept of social need, is in a very true sense complementary to the career retirement system and would complete a well-rounded program for Federal employees. In commenting on the need for coordination between these systems, the Kaplan committee had this to say, and I am quoting from the report: Staff-retirement systems in industry are designed to take into account that old-age and survivors' insurance benefits will be payable: the old-age and survivors' insurance benefit is thus an integral part of their overall benefit program. The civil-service retirement system, on the other hand, is designed as if members of the system were not affected by the old-age and survivors' insurance program. However, our study indicates that there is considerable mobility of employees between the Federal service and private industry, with many earning some credits under both the civil-service retirement and old-age and survivors' insurance. Of employees covered by the Civil Service Retirement Act at one time or another during the period from 1937 through 1951, more than 70 percent also had some employment under old-age and survivors' insurance. A degree of worker mobility is, of course, highly desirable. However, because Federal employment is excluded from old-age and survivors' insurance coverage, this shifting of employees between industry and the Federal service inevitably results in inequities in benefit payments. Employees who go from private industry into the Federal service lose valuable rights acquired under old-age and survivors' insurance. Others may qualify under both the Federal staff retirement system and old-age and survivors' insurance and receive a total benefit which may be unwarranted in relation to the period of service and amount of contributions. Some may fail to qualify under either the staff retirement system or old-age and survivors' insurance. It appears to the committee that these inequities would become more pronounced if old-age and survivors' insurance benefits are increased, as proposed, and the exclusion of civil-service employees from old-age and survivors' insurance coverage is continued. Excuse me, Mr. Chairman, there is a typographical error in the third line from the end of that paragraph-after the word "insurance" the term "benefits" should be inserted so that it reads "survivors' insurance benefits are increased, ***" If Federal employment were covered by old-age and survivors' insurance and the civil-service retirement system, the retirement system could pay benefits which would take into account that social security benefits would also be payable. Hence the employee whose work life was divided between Federal service and private industry would receive a total retirement benefit which would bear a reasonable relation to his lifetime service. The employee who did not remain in Federal service serving long enough to qualify under civil service retirement would get at least a social security benefit, and this benefit would include some retirement credit for his period of Federal service. Excuse me again, Mr. Chairman. There is a small typographical error in the second line on page 5. It should read "in Federal service." Let us take a look at some of the problems which exist because of the lack of coordination. That was the end of the quotation, Mr. Chairman. Take the case of a young man just beginning his working career. Assume that he has a wife and two small children. If he works in private industry or is self-employed, he is covered by social security, and if he dies after working as little as a year and a half, the Government-sponsored program of old-age and survivors insurance. provides his widow and children with valuable survivor benefits. Senator LANGER. Would you read that again, sir? They were talking here and I did not get that. Mr. YOUNG. Take the case of a young man just beginning his working career. Let us assume that he has a wife and two small children. If he works in private industry or is self-employed, he is covered by social security, and if he dies after working as little as a year and a half, the Government-sponsored program of old-age and survivors insurance provides his widow and children with valuable survivor benefits. If, however, instead of working in private industry, he decides to make Federal employment a career, and dies with less than 5 years of service, his survivors are left without any continuing benefits. If he dies after 5 or more years of service, survivor annuities are payable, but since the present civil-service retirement system properly relates the amount of such benefits to length of service, the amount is considerably less than a comparable social-security benefit unless he has worked for many years. This disparity, Mr. Chairman, in benefits cannot be properly corrected by shortening the service required to qualify for survivor benefits under the civil-service retirement system, nor by liberalizing the formula for computing the amount payable. A formula which would produce an adequate benefit after short service would result in excessive benefits after longer periods of employment. This would be true in any staff retirement plan which relates the amount of the benefit to length of service. The best available answer to this young man's problem lies in extending to him as a career employee of the Government the same basic protection which is now enjoyed by approximately 65 million workers already covered by the old-age and survivors insurance program. The protection provided by social security is geared primarily to social need rather than to length of service. Suppose, instead of working continuously for one employer, our young man changes his employment frequently. If all his service is covered by social security he will retain a continuity of basic protection, and reasonable benefits will be payable upon death or retirement. Senator SCOTT. May I interrupt you just a minute? Mr. YOUNG. Certainly, sir. Senator SCOTT. I have got to be in another meeting that I promised to be in. Senator Neuberger is on his way to take over, but in the meantime, I will ask my good friend and Senator, Senator Langer, if he will take the chair. Senator LANGER. I will be delighted and you could not get better man. Proceed. Mr. YOUNG. Suppose, instead of working continuously for one employer our young man changes his employment frequently. If all his service is covered by social security he will retain a continuity of basic protection, and reasonable benefits will be payable upon death or retirement. If, however, part of his employment is under the Civil Service Retirement Act, one of several situations may result. He may miss the boat and so have no protection under either system; he may qualify for inadequate benefits under one or the other; or he may by accident or design qualify for the maximum benefit intended by one system and in addition a similar full benefit intended by the other. Suppose, for example, our young man works in private employment for a year and a half, at the end of which he has acquired socialsecurity survivor protection. He then enters Federal employment, and dies 4 years later. He has then lost his social-security survivor protection, but has not yet qualified for civil-service retirement survivor benefits. Thus, no continuing benefits are payable by either system. Again, assume 5 years of employment covered by social security, and then 10 years under civil-service retirement, all at a salary of $4,200 a year. If all service had been covered by social security, after death the widow and 2 children would have received $2,400 a year in social-security benefits. However, since the last 10 years were under civil-service retirement, social-security survivor benefits are not payable. Civil-service retirement will pay only $670 a year to the widow and children. Mr. Chairman, to illustrate the third situation, assume a single employee retires under civil-service retirement in 1955 at the age of 60 with 35 years of service and an average salary of $4,200. His civilservice retirement annuity is $2,345 a year. By working at $4,200 a |