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tion as many of the benefits for employees of the Panama Canal and Alaska Railroad should be retained as are consistent with benefits given employees who are now covered by the Civil Service Retirement Act. It is believed that the bill approved by the committee accomplishes these ends.

Testimony established that approximately 4,600 employees on the Panama Canal and 2,200 employees in Alaska will be brought under the civil service retirement system by this legislation. It was estimated by the Civil Service Commission that the cost of the bill, as amended by the committee, will be approximately $425,000 annually plus a one-time cost of $450,000 occasioned by the retroactive provisions of the bill.

ANALYSIS OF BILL.

Section 1 repeals the Alaska Railroad Retirement Act and the retirement provisions of the Canal Zone Code and extends the Civil Service Retirement Act of May 29, 1930 as amended. to cover employees affected by the repeal.

Section 2 directs the Civil Service Commission to determine the assets in the Alaska Railroad retirement and disability fund and in the Canal Zone retirement and disability fund and transfer such assets to the civil service retirement and disability fund. Also, all contributions made by employees of the Alaska Railroad and Canal Zone are to be credited to the individual accounts of such employees in the civil service retirement and disability fund in accordance with service rendered.

Section 3 retains the present provisions in the Alaska Railroad and Canal Zone Retirement Acts establishing 62 years as the age for compulsory retirement.

Section 4 retains the existing provisions of the Alaska Railroad and Canal Zone Retirement Acts granting an additional annual annuity of $36 for each year of construction service with the Alaska Railroad or the Panama Canal.

Section 5 extends to retired employees of the Panama Canal, the Panama Railroad Company, and the Alaska Railroad the provisions of section 8 of the Civil Service Retirement Act of May 29, 1930, as amended by Public Law 426, Eightieth Congress, increasing the annuities of such employees by 25 percent or $300, whichever is the lesser, or the option of continuing to receive the same annuity while naming a surviving spouse to receive one-half of such annuity but not to exceed $600 per year.

Section 6 provides that service with the Panama Railroad Company prior to January 1, 1924, is to be fully creditable for retirement purposes without the deposit otherwise required for past service not covered by employee contributions. This provision is in the Canal Zone Retirement Act (Canal Zone Code, title II, sec. 98).

Section 7 fixes the effective date of the provisions of the bill the same as the effective dates of corresponding provisions of the Civil Service Retirement Act of May 29, 1930, as amended.

Reports received by the Committee with respect to this legislation from the Civil Service Commission dated March 31, 1949, Department of the Interior dated May 3, 1949, and the Bureau of the Budget dated April 13, 1949, are as follows:

CIVIL SERVICE COMMISSION, Washington, D. C., March 31, 1949.

Hon. Toм MURRAY,
Chairman, Committee on Post Office and Civil Service,

House of Representatives.

DEAR MR. MURRAY: I am referring further to your letter of March 14, 1949, relative to H. R. 3445, a bill to repeal the provisions of the Alaska Railroad Retirement Act of June 29, 1936, as amended, and sections 91 to 107 of the Canal Zone Code and to extend the benefits of the Civil Service Retirement Act of May 29, 1930, as amended, to officers and employees to whom such provisions are applicable.

Section 1 of the bill would have the effect of repealing the Alaska Railroad and the Canal Zone Retirement Acts, and placing the covered employees under the Civil Service Retirement Act.

Under section 2 the retirement funds of the systems would be consolidated and the employees' accounts set up under the Civil Service Retirement Act with resultant credit for the service covered by their contributions.

Section 3 continues the existing automatic retirement age of 62 after 15 years' service on the Isthmus or in Alaska. The automatic retirement age for employees generally under the Civil Service Retirement Act is 70 years after 15 years of service.

Section 4 provides for an increase in annuities of persons retired under the Alaska Railroad Retirement Act and Canal Zone Retirement Act, prior to the effective date of this amendment by 25 percent or $300, whichever is the lesser. In lieu of this increase each such annuitant may within 60 days following such effective date elect to forego this increase and name his wife or husband to receive upon his or her death one-half of his or her annuity, the survivor benefit not to exceed $600 per annum. Should any such annuitant die within 60 days of the effective date of the amendment, he shall be presumed to have made the election for the survivor benefit. Except as provided in this paragraph all existing annuity and refund rights of separated employees subject to the Canal Zone and Alaska Railroad retirement systems are preserved.

Section 5 provides that the amendment shall be effective the first day of the month following the date of approval. That provision of the Civil Service Retirement Act which continues on furlough those employees who during a war or emergency period left their civilian positions to enter the armed forces of the United States on or after September 9. 1939, is extended to the persons affected by this act as of that date.

The Commission has consistent.y favored the elimination of the numerous retirement systems now in effect for Government employees and the inclusion of all employees within one standard system. Favorable action on this bill is recommended.

In order to obviate any question regarding payment out of the civil service retirement and disability fund to those persons already retired, it is suggested that the bill be amended by adding after the word "annuity" in line 25, page 3, the words "shall be paid out of the civil service retirement and disability fund and"

In view of request for immediate reply, the Commission has not been able to clear this report with the Bureau of the Budget. By direction of the Commission: Sincerely yours.

HARRY B. MITCHELL, President

Hon. Toм MURRAY,

DEPARTMENT OF THE INTERIOR,
OFFICE OF THE SECRETARY,
Washington, D. C., May 3, 1949.

Chairman, Committee on Post Office and Civil Service,

House of Representatives.

MY DEAR MR. MURRAY: This is in reply to your telephone request of April 29 for the views of this Department on H. R. 3445, a bill "To repeal the provisions of the Alaska Railroad Retirement Act of June 29, 1936, as amended, and sections 91 to 107 of the Canal Zone Code and to extend the benefits of the Civil Service Retirement Act of May 29, 1930, as amended, to officers and employees to whom such provisions are applicable.' Inasmuch as the administrative concern of this Department, with respect to this bill, relates solely to the Alaska

Railroad, my comments on the bill are confined to those portions affecting that agency. I recommend that H. R. 3445 be enacted.

In general, the bill would repeal the Alaska Railroad Retirement Act of June 29, 1936, as amended, and extend the provisions and benefits of the Civil Service Retirement Act of May 29, 1930, as amended, to employees of the Alaska Railroad. Section 3 of the bill provides for mandatory retirement of employees of the Alaska Railroad at the age of 62. This provision is considered desirable in the interests of efficient operation of the Railroad.

The primary objective of this legislation is to consolidate the retirement systems of the Alaska Railroad and the Canal Zone with that of the civil service. Such a consolidation would simplify administration and create a uniformity of retirement benefits offered by the Federal Government to its employees. It is our belief that this bill, if enacted, would aid materially in reducing turn-over in personnel on the Alaska Railroad. A more liberal retirement act for Alaska Railroad employees, as contemplated in this measure, would provide a strong inducement for present and prospective employees to remain with the Railroad, thereby contributing toward the creation of a more stable working complement on the Railroad.

From an equitable viewpoint, the employees of the Alaska Railroad, many of whom work under hazardous and rigorous conditions, are, I believe, entitled to at least the same retirement benefits which are applicable to Federal employees generally.

In view of the fact that hearings on this bill have been scheduled for May 3, this report is being sent to you prior to its submission to the Bureau of the Budget. Therefore, no commitment can be made concerning the relationship of the foregoing views to the program of the President.

Sincerely yours,

OSCAR L. CHAPMAN, Under Secretary of the Interior.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington, D. C., April 15, 1949.

Hon. Toм MURRAY,

Chairman, Committee on Post Office and Civil Service,

House of Representatives, Washington, D. C.

MY DEAR MR. MURRAY: This will acknowledge receipt of your letter of March 24, 1949, extending an invitation to the Bureau of the Budget to comment on H. R. 3445, to repeal the provisions of the Alaska Railroad Retirement Act of June 29, 1936, as amended, and sections 91 to 107 of the Canal Zone Code and to extend the benefits of the Civil Service Retirement Act of May 29, 1930, as amended, to officers and employees to whom such provisions are applicable.

The general purposes of this bill are primarily to make applicable to employees, now subject to the Alaska Railroad Retirement Act or the Canal Zone Retirement Act, the features and provisions which were recently incorporated in the Civil Service Retirement Act by Public Law 426, approved on February 28, 1948. Secondarily, in so doing, it would consolidate the Alaska Railroad Retirement Act, the Canal Zone Retirement Act, and the Civil Service Retirement Act, in the interests of uniformity and legislative convenience. There is enclosed herewith, for your ready reference and convenience, a copy of a letter of February 25, 1949, with respect to H. R. 2120, a somewhat similar bill, restricted, however, to the Alaska Railroad Retirement Act, which the Civil Service Commission has forwarded to your committee. You will note that the Commission suggests a substitute draft bill for H. R. 2120, in substantially the same form as H. R. 3445, which omits from its provisions any added benefits for Alaska Railroad or Canal Zone employees in contrast to S. 1081, currently being considered by the Senate. Moreover, the Commission points out in its letter that the ideal situation would be one that would merge the systems without added advantages for any one group, and that the Civil Service Retirement Act is generally much more liberal in its terms than the Alaska Railroad Retirement Act.

It appears to this office that the position taken by the Civil Service Commission is an appropriate one, and that the enactment of H. R. 3445, giving the employees of the Alaska Railroad and the Panama Canal the same retirement benefits as those enjoyed by other Civil Service employees, would be preferable to the enactment of S. 1081.

Accordingly, it is believed that the Congress should give favorable consideration to this proposal.

Sincerely yours,

F. J. LAWTON, Assistant Director.

CHANGES IN EXISTING LA W

In compliance with paragraph 2a of Rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as introduced, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman):

ALASKA RAILROAD RETIREMENT ACT OF JUNE 29, 1936, AS AMENDED

[AN ACT

[For the retirement of employees of the Alaska Railroad, Territory of Alaska, who are citizens of the United States

[Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That all employees of the Alaska Railroad, Territory of Alaska, who are citizens of the United States and whose tenure of employment is not intermittent nor of uncertain duration, shall come within the provisions of this Act: Provided, however, That employees of the Alaska Railroad who in the past have been, or in the future may be, employed thereon for the period of at least three months per year for at least two years shall come within the provisions of this Act: Provided further, That clerical employees of the Alaska Railroad who were subject to the Civil Service Retirement Act of May 22, 1920, as amended, at any time between July 1, 1935, and the effective date of this Act shall deposit in the Alaska Railroad retirement and disability fund an additional 11⁄2 per centum of the basic salary, pay, or compensation received by them during such period, together with interest computed at the rate of 4 per centum per annum compounded on the last day of each fiscal year, but such interest shall not be included for any period during which the employee was separated from the service.

[SEC. 2. All employees to whom this Act applies shall, after reaching the age of sixty-two years and having rendered at least fifteen years of service in the Territory of Alaska, be automatically separated from the service and retired on the annuity provided for herein; and all salary, pay, or compensation shall cease from that date: Provided, That if the Secretary of the Interior certifies to the Civil Service Commission that, by reason of his efficiency and willingness to remain in the service, the continuance of such employee therein would be advantageous to the service, such employee may be retained for a term not exceeding two years, upon the approval and certification by the Civil Service Commission, and, at the end of the two-year term, by similar approval and certification, be continued for an additional term not exceeding two years: Provided, however, That no employee shall be continued in the service beyond the age of retirement for more than four years, except that where the Secretary of the Interior certifies, and the Civil Service Commission agrees, that by reason of expert knowledge and special qualifications the continuance of the employee would be advantageous to the service, further extensions of two years may be granted.

[All employees to whom this Act applies who would be eligible for retirement from the service upon attaining the age of sixty-two years shall, after attaining the age of sixty years and having rendered at least thirty years' service, computed as provided in section 7 of this Act, be eligible for retirement on an annuity as provided in section 6 of this Act. Retirement under the provisions of this paragraph shall be at the option of the employee, but if such option is not exercised prior to the date upon which the employee would otherwise be eligible for retirement from the service the provisions of this Act with respect to automatic separation from the service shall apply.

[SEC. 3. Any employee to whom this Act applies who shall have attained the age of fifty-five and rendered at least twenty-five years of service, of which not less than fifteen years shall have been rendered in the Territory of Alaska, may voluntarily retire on an annuity equivalent in value to the present worth of a deferred annuity, beginning at the age at which the employee would otherwise

have become eligible for retirement, computed as provided in section 6 of this Act, the present worth of said deferred annuity to be determined on the basis of the American Experience Table of Mortality and an interest rate of 4 per centum compounded annually.

[SEC. 4. (a) Any employee to whom this Act applies who shall have attained the age of fifty-five years and shall have rendered at least fifteen years of service on the Alaska Railroad, and who shall have become physically or mentally disqualified to perform satisfactorily and efficiently the duties of his position or of any other position of approximately equal compensation to which he might be assigned, because of the strenuous or hazardous nature of such position, shall, upon the request or order of the Secretary of the Interior be retired on an annuity computed in accordance with the provisions of section 6 hereof: Provided, That no such employees shall be so retired except after an examination and finding as to his mental or physical disqualifications as hereinafter provided.

[(b) Any employee to whom this Act applies who shall have served for a total period of not less than five years, and who, before becoming eligible for retirement under the conditions defined in section 2 hereof, shall have become totally disabled for useful and efficient service in the grade or class of position occupied by the employee, by reason of disease or injury not due to vicious habits, intemperance, or willful misconduct on the part of the employee, shall upon his own application or upon request or order of the Secretary of the Interior, be retired on an annuity computed in accordance with the provisions of section 6 hereof.

[No claim shall be allowed under the provisions of this section unless the application for retirement shall have been executed prior to the applicant's separation from the service or within six months thereafter. No employee shall be retired under the provisions of this section unless he or she shall have been examined by a medical officer of the United States, or a duly qualified physician or surgeon or board of physicians or surgeons designated by the United States Civil Service Commission for that purpose, and found to be disabled in the degree and in the manner specified herein.

[Every annuitant retired under the provisions of this section, unless the disability for which he was retired be permanent in character, shall, at the expiration of one year from the date of such retirement and annually thereafter, until reaching retirement age is defined in section 2 hereof, be examined under the direction of the United States Civil Service Commission by a medical officer of the United States, or a duly qualified physician or surgeon or board of physicians or surgeons designated by the United States Civil Service Commission for that purpose, in order to determine the nature and degree of the annuitant's disability, if any. If an annuitant shall recover before reaching the age at which he would otherwise have become eligible for retirement and be restored to an earning capacity which would permit him to be appointed to some appropriate position fairly comparable in compensation to the position occupied at the time of retirement, payment of the annuity shall be continued temporarily to afford the annuitant opportunity to seek such available position, but not in any case exceeding ninety days from the date of the medical examination showing such recovery.

[If the annuitant shall fail to obtain reemployment through no fault of his own within the ninety-day period in any position included in the provisions of this Act, he shall be considered as involuntarily separated from the service as of the date he shall have been retired for disability, and, if otherwise eligible, entitled to an annuity under section 5 of this Act to begin at the close of said ninety-day period based on the service rendered prior to his retirement for disability.

[The United States Civil Service Commission may order or direct at any time such medical or other examination as it shall deem necessary to determine the facts relative to the nature and degree of disability of any employee retired on an annuity under this section. Should an annuitant fail to appear for any examination required under this section, payment of the annuity shall be suspended until the requirement shall have been met.

[In all cases where the annuity is discontinued under the provisions of this section before the annuitant has received a sum equal to the amount credited to his individual account as provided in section 11 (a) hereof, together with interest at 4 per centum per annum compounded on June 30, of each year, the difference, unless he shall become reemployed in a position within the purview of this Act, shall be paid to the retired employee, as provided in section 11 (b) hereof, upon application therefor in such form and manner as the United States Civil Service Commission may direct. In case of reemployment in a position within the purview of this Act the amount so refunded shall be redeposited as provided in section 11 (b) hereof.

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