CONTENTS Greenlief, Maj. Gen. Francis S., NGUS (Ret.) executive assistant, Na- tional Guard Association of the United States, accompanied by Col. William A. Blatt, ANG (Ret.), legislative counsel__. Hickey, Charles, national vice president, National Association of Gov- ernment Employees, accompanied by William Carson, Maryland Air National Guard; and William Spears, West Virginia Army National Montgomery, Hon. G. V., a Representative in Congress from the State Paterno, Vincent J., president, Association of Civilian Technicians--- Spencer, Richard W., business representative for the National Army- Air Technicians Association, accompanied by John Callanan and Robert Magno, president of local 371__. Tinsley, Thomas A., Director, Bureau of Retirement, Insurance, and Occupational Health, U.S. Civil Service Commission--- Webber, Clyde M., president, American Federation of Government Em- ployees, accompanied by Carl K. Sadler, legislative representative; and George Hobt, National Guard technician, National Guard co- Webster, Raymond S., special assistant to the Deputy Assistant Secre tary of Defense for Reserve Affairs, accompanied by Richard B. Selby, Office of Civilian Personnel Policy, Manpower and Reserve Affairs; and Bernard Hurlock, Deputy Chief of the Office of Techni- cian Personnel, National Guard Bureau__. Whitehead, Robert C., president, NFFE Local 1708, State of Louisiana, accompanied by Hon. Gillis Long, a Representative in Congress from Williams, Sgt. Maj. Virgil, president, Enlisted Association, National Guard of the United States, accompanied by William C. Ament, legis- lative chairman; J. W. Rumburg, Maryland Army National Guard; William Paulsen, Maryland Air National Guard; and Dornell De- kowski, Air National Guard, Maryland.... Wolkomir, Dr. Nathan T., president, National Federation of Federal Employees, accompanied by J. Gene Raymond, Air National Guard, Statements and communications- Burbach, Donald W., president, Enlisted Association of the Nebraska 123 Ginn, Hon. Bo, a Representative in Congress from the State of Georgia_ Greenlief, Gen. Francis S., executive assistant, National Guard Associa- tion of the United States, letter dated June 17, 1975___. Hanley, Hon. James M., a Representative in Congress from the State Huband, James E., director of Maintenance, Virginia National Guard, 125 115 Merdinian, Stepan M., vice president and managing director, Hotel Ranzenback, Robert F., president, National Guard Association of Page 121 114 115 123 115 St Germain, Hon. Fernand, a Represenative in Congress from the 116 Sapp, Oliver J., president, Local 2953, American Federation of Gov- 122 117 Stover, Francis W., director, National Legislative Service, Veterans 120 Udall, Hon. Morris K., a Representative in Congress from the State of 111 Webster, R. S., Special Assistant to the Deputy Assistant Secretary (Reserve Affairs), letter dated June 19, 1975, in response to and enclosing information requested during the appearance of Mr. Webster before the subcommittee___ 26 Young, Hon. Don, a Representative in Congress from the State of 117 Administration reports received from Office of Management and Budget, letter dated June 9, 1975---- Copy of H.R. 100--- Summary of recommendations on the legislation__- 130 132 128 127 CORRECT CERTAIN INEQUITIES IN THE CREDITING OF 117 120 111 26 17 WEDNESDAY, JUNE 11, 1975 U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON POST OFFICE AND CIVIL SERVICE, Washington, D.C. The subcommittee met at 9 a.m., in room 304 of the Cannon House Office Building, Hon. Richard C. White (chairman of the subcommittee), presiding. Mr. WHITE. The subcommittee will come to order. The subcommittee has convened this morning to begin extensive deliberations on the 19 National Guard Technician bills now in the subcommittee. These bills would, in effect, amend the National Guard Technician Act of 1968 to grant 100-percent retirement credit for pre-January 1, 1969, technician service for annuity computation purposes, and to allow all former technicians in Government service credit for their pre-January 1969 technician service. Thus, the 19 bills would, in one way or another, delete the 55-percent credit allowance now granted to technicians and bring the 55-percent figure up to a full 100-percent credit for annuity computation. Further, the bills would repeal the restriction that benefits and annuities be granted only to those technicians serving in the National Guard program on and after January 1, 1969. This would allow all former technicians in other Government service on and after January 1, 1969, to also receive full service credit for their pre-January 1969 technician service. We shall begin these hearings by hearing first from Congressman G. V. (Sonny) Montgomery of Mississippi, author of H.R. 100, which is a very significant number, which was the first of the 19 bills received by the subcommittee. Mr. Montgomery, would you approach the witness stand. The procedure in this committee is you may deliver your testimony in full or summarize, and your statement can be placed in the record in full as you wish. We do ask you to keep it to approximately 10 minutes, if possible. STATEMENT OF HON. G. V. (SONNY) MONTGOMERY, A REPRESENT- Mr. MONTGOMERY. I would like to submit my full statement in the record and summarize. Mr. WHITE. Without objection it will be done. Piirai StwTEMENT OF Box 4 7. MOSTROMERY I am happy to appear before this committed to tree its favorable action on legislation to provide 100 percent medit for vertice before January L. 1969, the effective Ante of the National Guard Techniciara set of 38 Instead of the 56 percent credit which that Act provides As you know, I introdneed in this Congress HR 100 which was co-sponsored by Mes, Holt, Mr. Mitchell of New York. Ar. Fiken. Mr. Wres of Indiana, Mr. Lott, and Mr. Cochran. There are at least 1 wher hils in his Congress, at last count, all with the same objective of giving hele leserving men and women-and their survivors the retirement benefits to which they are fairly entitled A short review of the history of this legistation may bein. The Cabinet Committee on Federal Staff Retirement Sytems recommended to the President (p. 48, H. Doc. No. 402, 89th Cong, 21 Seas hat National Garri hnicians (all of whom were paid entirely from Federal funds at zares ixer by Federal authorities) be treated as Federal employees for retirement purposes. The C.S. Civil Service Commission recommended the establishment of his stars with 100 percent credit for all prior servies. The Department of Defense Snerred. The Office of Management and Budget approret. HR 2 embodying his principle, was supported by Administration witnesses and passed the House on February 20, 1967. As passed by the House, it would have provided 100 percent prior service credit for technicians. When the Senate disagreed, Honse conferees argued unsuccessfully for restoration of title II of the bill which covered National Guard technicians (Conference report on HR 2. House Report No. 925 dated November 14, 1967). The Senate Armed Services Committee devised the totally unprecedented 55 percent formula, and in its report of July 22, 1988, to accompany S. 3865. (Senate Report No. 1446, 90th Congress, 2d Session), gave an extensive, if unsatisfying, explanation of its reasons. As this Committee knows, in every other instance, from May 22, 1920, (the inception of the Federal Civil Service Retirement System) through July 1. 1960, when thousands of Agricultural Stabilization County Committee employees were brought under the Federal Civil Service Retirement by Publice Law 86-568, every single one of those groups was given full credit for all prior service. The groups include rural mail carriers. D.C. Government employees, the F.B.I.. Congressional employees, Members of Congress, and a host of others, including those brought under by administrative action authorized by the Congress. Full credit was given to the Cooperative Agricultural Extension employees who were administratively covered in the system in 1945, despite the fact that some of their prior service was covered by State retirement systems and the Federal Government had contributed the employer's share of the cost. Full credit was given for the prior service of the County Agricultural Stabilization and Conservation Committee employees by Public Law 86-568 although that service had been covered by the Social Security Act and the Federal Government had paid the employer's OASI tax. Never before had the fact that a Federal civilian employee was giving part of his off-duty time to participation in reserve training, which would entitle him like every other participant to retired pay at age 60 with 20 or more years of military service, been used as an argument to reduce the amount of his Civil Service annuity, in complete contravention of the letter and spirit of section 1336 of title 10, United States Code. I would like to point out a few of the most flagrant inequities of the current law. Technicians covered by the retirement laws of the States of Connecticut, Massachusetts, Nevada and Ohio, numbering 3.098 on July 1, 1968, according to the tables contained in the Senate report (p. 34), were not covered by the Social Security Act. Why should their annuities be reduced to reflect the Social Security Act contributions made by the Federal Government to technicians in other states? Moreover, while 4.450 technicians had a vested interest in state retirement systems, according to the Senate report (p 9), there is no discussion whatsoever of the plight of the other 11.481 technicians who were covered by state systems (p 84) but did not have and, in all probability, never would acquire a vested interest under the state plan, or derive any benefits whatsoever for their prior participation. Assuming a windfall to the States resulting from the uncommitted Federal contribution, as the Senate report does (p 17), it is crystal clear that those technicians who did not acquire a vested interest in the state plan benefit not at all. Yet they too suffer the 45 percent loss of credit for prior service. Similarly, why should technicians in the 31 states which did not cover them under their state retirement systems, have their annuities reduced to reflect the Federal contribution to the retirement systems of the other 20 states and Puerto Rico which included technicians under those systems? Why should service before 1951, when technicians were not covered by the Social Seurity Act or any other federally-supported system, be subject to the 55 percent formula? The Senate report (p 9) states that some 20,000 technicians had already earned 40 quarters of coverage and had a vested right to Social Security benefits. It did not go into much detail with respect to the 17,000 or 46 percent of the technician force that had not, and might not ever, earn the necessary 40 quarters of coverage because of their conversion to the Federal program and loss of Social Security Act coverage. Nothing was said of the $58.3 million contributed by the technicians themselves to match the Federal contribution as reported by the Senate Armed Services Committee (p 9). Obviously some or all of the $58.3 million contributed by this 46 percent of the force, plus the interest earned in the interim, is a windfall to the United States, which the Senate report neglects to talk about. And it is appropriate to observe that 1,756, or 4.39 percent of the technicians eligible to be covered by the Federal Civil Service Retirement program on January 1, 1969, elected not to do so, remaining instead under their local state programs. Neither they, nor the 389 District of Columbia National Guard technicians who had always been participating and contributing members under the Federal system, were hurt or helped by the prior service formula and will be wholly unaffected by any change that may be made at this time. This committee is rightly concerned with increases in the unfunded liability of the Civil Service Retirement Fund. On the other hand, hundreds of millions of dollars of retired pay are paid annually to military retirees, and all of the Federal Government's liability to the Armed Forces is unfunded. The Civil Service's unfunded liability is increased every day by the appointment in the Civil Service of a veteran whose military service is creditable without contribution of the employee or Government. The fact that annuities are computed on the basis of the employee's high three salary years rather than on the amount of his own contributions is practically a built-in guarantee of increased unfunded liabilities, as are increases in pensions resulting from consumer price index increases. I will accept the Civil Service Commission estimate of $128 million as the long range cost of giving the additional 45 percent credit required to provide 100 percent credit for past technician service. However, I view it in a different light. I view it as the amount of money of which this group of employees has heretofore been unjustly deprived. I see it as the amount of money that must be expended if the axiom and keystone of the Federal Service System-"Equal pay (including equal retired pay) for equal work"-is to be applied with respect to this group, as it has been in every other instance. I hope that you will bear in mind that since the first legislation was introduced to provide retirement at the level provided in this bill, such legislation was: (1) recommended by the Department of Defense and the Civil Service Commission, approved by the Office of Management and Budget, and passed by the House of Representatives in 1967; and (2) twice passed by the Senate (1973 and 1974). I think it is unfortunate that the Department of Defense has seen fit to reverse its position. I strongly urge this committee to correct the very great injustice which the current law insures. Mr. MONTGOMERY. Mr. Chairman, I apologize for being late. I should know you would start the committee hearing on time. I congratulate you for it. I would also like to thank you for giving us the opportunity to testify on H.R. 100, to provide 100 percent credit for technicians for service before January 1, 1969. This would be in lieu of the 55 percent credit provided by the National Guard Technician Act of 1968. The concept of providing 100 percent credit for prior service was endorsed |