ENLISTED ASSOCIATION OF THE NEBRASKA NATIONAL GUARD, Hon. RICHARD V. WHITE Chairman. Rayburn House of Representatives Busiding, Washington. D.C. June 30, 1975. DEAR ME WHITE: The Enlisted Association of the Nebraska National Guard unanimously supports H.R. 100-100 percent Retirement for National Guard Technicians and requests your committee's favorabie action on this bill. EANNG SUDDOrt this bill because: (1) To disallow 100 percent Retirement for National Guard Technicians would be to discriminate against an important segment of Government employees. (2) The present system penalizes Guardsmen who have faithfully served their country and the National Guard since World War II. (3) Passage of this legislation would provide an equitable retirement to National Guard Technicians, and is the only action consistent with the Congres sional intent to provide a living retirement to all working people in the United States. If there are any other matters on which we, as an association, can be of help or information. please feel free to contact us. We would appreciate any contribution you can make toward the furthering of this very important piece of legislation. Sincerely, DONALD W. BUBBACH, STATEMENT OF COL. JOHN T. Carlton, EXECUTIVE DIRECTOR, RESERVE OFFICERS ASSOCIATION OF THE UNITED STATES Mr. Chairman and members of the subcommittee, we appreciate having this opportunity to present our views on such bills as H.R. 100, to correct certain inequities in the crediting of National Guard technician service in connection with Civil Service retirement and for other purposes. We address ourselves particularly to clauses (a) and (d) of the bill. The purpose of these two clauses is to amend the law to provide that former National Guard technicians who had served for varying periods of time as such but had. prior to the enactment of the National Guard Technician Act, P.L. 9486. left those positions and were working as Army or Air Force Reserve techni cians or in other federal Civil Service positions will receive retirement credit for the time spent in the National Guard. These individuals had served honorably as Guard technicians; most were transferred to other positions in the federal service for the convenience of the government. Yet, because of the restrictive provisions of P.L. 90-486, which was written to apply only to those who were serving as National Guard technicians on the effective date of the Act, they are denied earned benefits. It is unclear as to why such provisions were written into the Act, but the effect was to deny earned credit for Civil Service retirement, leave, death or injury compensation, group insurance and severance pay, which were provided to all other National Guard technicians for the same periods and types of service. In our mind this is clearly unjust. Thus your committee will perform a worthy service if it would recommend favorable action on clauses (a) and (d) of such bills as H.R. 100. We respectfully urge that you do so. Hon. BROCK ADAMS, Washington, D.C. NATIONAL GUARD ASSOCIATION OF WASHINGTON, DEAR REPRESENTATIVE ADAMS: The House Subcommittee on "Retirement and Employees Benefits" of the Post Office and Civil Service Committee has scheduled hearings concerning National Guard Technician Retirement Legislation. The purposes of this proposed National Guard Technician Retirement legislation are: (a) To give all Federal employees, irrespective of the agency by which they are employed, identical credit for National Guard technician service before January 1, 1969, the effective date of the National Guard Technicians Act of 1968, and (b) To remove the 55 percent limitation on the credit currently allowed for National Guard technician service before January 1, 1969, thereby permitting full credit for all such prior service. The National Guard Technicians have drawn their pay from the Federal Government and the Military Secretaries have been empowered, by law, to set their salary schedules and other working conditions since the first technician was employed in 1924. Thus from the beginning, these individuals were “federal employees" in all but a legal sense. All other groups brought in under the Federal Civil Service Retirement Act, whose prior service was covered by Social Security, have been given full credit for that service for retirement purposes. All that is, except for the National Guard technicians. The National Guard Association of Washington strongly urges your support during the upcoming House Subcommittee Hearings on this important piece of legislation affecting members of the National Guard in communities of your district. Attached is a fact sheet with information for your records. I would encourage your endorsement of this letter to The Honorable Richard C. White, Chairman on Retirement and Employee Benefits Subcommittee. Sincerely, ROBERT F. RANZENBACH, President. FACT SHEET-NATIONAL GUARD TECHNICIAN RETIREMENT LEGISLATION Purposes of Legislation are: (a) To give all Federal employees, irrespective of the agency by which they are employed, identical credit for National Guard technician service before January 1, 1969, the effective date of the National Guard Technicians Act of 1968; and (b) To remove the 55 percent limitation on the credit currently allowed for National Guard technician service before January 1, 1969, thereby permitting full credit for all such prior service. All other groups previously brought under the Civil Service Retirement Act, whose prior service was covered by Social Security, have been given full credit for that service for retirement purposes. Many technicians, who were covered by Social Security will derive no benefits because they did not accrue the necessary quarters of coverage prior to January 1, 1969, when they became covered by Civil Service retirement. The majority of National Guard technicians will be mandatorily separated before they can begin to claim Social Security at age 62-65. Seventy-five percent of technicians covered by local retirement systems did not have the service required to acquire vested interests in State systems, and will never become entitled to State annuities. The 55 percent imposed limitation applies not only with respect to service during the 1955–1968 period during which the Federal Government contributed to Social Security and during 1962-1968 to State retirement, but also to service before 1955, when the U.S. Government made no contributions. Fewer than half the technicians in the program at the time the Retirement Act was adopted in 1968 had completed the qualifying 40 quarters, or 10 years, under the Social Security program as a result of their technician service. That means that a majority of the technicians as they then existed, will probably never become eligible for Federal Old Age and Survivors Benefits. For them, their Federal contributions into Social Security will be lost. Even those few who had completed the necessary 40 quarters, and thus were insured, will suffer a reduction in the Social Security benefits that eventually are paid because further contributions ceased for both employee and employer, on the day they entered the Federal retirement system in 1968. Technicians have been employed fulltime by the National Guard since 1924. From the beginning, they were Federal employees in all but a legal sense. Their duties are primarily related to the National Guard's Federal defense mission. They have drawn their pay from the Federal Government, and the Military Secretaries have been empowered by law to set their salary levels and prescribe other conditions of employment. They have worked to enhance the military readiness and capability of the Guard as a first-line element for national defense. Prior to passage of the Technician Act of 1968, the Federal Government made contributions to the retirement systems of 20 States on behalf of technicians of those States. On that basis 100 percent credit for Federal retirement was perceived as a windfall and retired credit was reduced to 55 percent. The technicians of the 31 States for which no Federal payment to retirement systems was made also suffered the 45 percent reduction although no windfall occurred or was perceived. Technicians of Massachusetts, Ohio and Nevada were never included in the Social Security program, thus the Federal Government made no contribution for the employer's share of FICA. Yet the technicians of these States also suffered the 45 percent reduction of retirement credit. Under current law restricting to 55 percent technicians service before 1 January 1969, Guard technicians are almost forced to remain in their job until age 60 in order to qualify for a sufficient annuity. In some cases technicians could have as much as 42 years of military service, far beyond their Active force counterpart. After age 55, the value of most technicians as a mobilizable asser in combat units is greatly decreased. If they were granted 100 percent credit for service before 1 January 1969, a large number would elect for retirement at an earlier age, thereby improving vitalization and enhancing readiness. The principle of “equal pay for equal work" should be observed by giving equal credit for prior service in the computation of retired pay. One of the objectives of legislation to include all Guard technicians under a uniform retirement program was to encourage and facilitate transfers between States without loss of credits. The 45 percent reduction formula has served to defeat that objective in part, because technicians in those States covered by those State retirement systems, which give 100 percent credit for past service, elected to remain under their State retirement program. Technicians must maintain military membership in the National Guard as a continued condition of technician employment. They must continue to meet the physical and educational standards for military service else they lose their technician jobs. COMMONWEALTH OF VIRGINIA, DEPARTMENT OF MILITARY AFFAIRS, ADJUTANT GENERAL'S OFFICE, Hon. HERBERT E. HARRIS, II, DEAR MR. HARRIS: As you are aware, the Subcommittee on Retirement and Employee Benefits of the House Post Office and Civil Service Committee has scheduled hearings on National Guard Technician Retirement Legislation. The primary purpose of this legislation is to remove the 55 percent limitation on the credit currently allowed for National Guard Technician service before 1 January 1969, thereby permitting full credit for all such prior service. All other groups previously brought under this Civil Service Retirement Act, whose prior service was covered by Social Security, have been given full credit for that service for retirement purposes, except National Guard Technicians. The majority of Virginia National Guard Technicians will be mandatorily separated before they can begin to claim Social Security. No Virginia National Guard Technician has a vested interest in the Virginia Supplemental Retirement System because they were never authorized to participate in the retirement system and hence will never become entitled to state annuities. Many Virginia National Guard Technicians who were covered by Social Security, will derive no benefits because they did not accrue the necessary quarters of coverage prior to 1 January 1969, when they became covered by Civil Service Retirement. Enclosed is a typical retirement pay computation for a GS-7 Virginia National Guard Technician, retiring at age 60, with over 30 years total service. I would appreciate your support on this important matter would welcome the opportunity to visit with you or appear as an outside witness before your subcommittee. Sincerely yours, JAMES E. HUBAND, Director of Maintenance. RETIREMENT PAY COMPUTATION FOR A VIRGINIA MALE NATIONAL Guard TECHNICIAN, GS-7, RETIRING FEBRUARY 1974 BASIC DATA Date of Separation-February 22, 1974. Date of Birth of Retiree-January 22, 1914. Age at Retirement- 60 years 1 month. High Three Average Salary-$10,894. SERVICE Technician prior to January 1, 1969-18 years, 9 months, 4 days. Military-7 years, 4 months, 11 days. Sick Leave-8 months, 12 days. Total Service-31 years, 3 months, 6 days. ACTUAL, UNDER 55 PERCENT LIMITATION 12 percent X $10,894 × 5 years × 55 percent = $449.37. 14 percent X $10,894 X 5 years X 55 percent = $524.27. 2 percent X $10,894 X 8 years 9 months X 55 percent = $1,048.54. 2 percent X $10,894 × 13 years 2 months = $2,861.30. Basic annuity-$4,889.48. Less 10 percent unpaid deposit 1-$489.90. Life rate $4,399. After deduction for survivor benefit-$4,229.00. $4,229÷12=$352.41 per month. Less Blue Cross, Blue Shield $33.16. Actual-Monthly Benefit-$319.25. COMPUTATIONS IF UNDER H.R. 100 (100 PERCENT CREDIT FOR TECHNICAL SERVICE) 14 percent X $10,984 × 5 years = $953.22. 2 percent $10,984 × 21 years, 11 months = $4,775.05. IF EMPLOYED SAME PERIOD, SAME TIME, FOR OTHER AGENCY 11⁄2 percent X $10,984 X 5 years-$817.05. 14 percent × $10,984 × 5 years-$953.22. 2 percent X $10,984 X 21 years, 11 months-$4,775.05. Basic annuity-$6,545.32. All deposits paid (no deduction). Life rate $6,545.32. After deduction for survivor benefit-$6,160.78. $6,160-12=$513.39. Less Blue Cross, Blue Shield $33.16. Actual monthly benefit-$480.73. 1 Unpaid deposits represents monthly contribution the employee should have paid into the retirement system. Unpaid deposits for actual retirement computed at 55% of earnings prior to 1 Jan 1969 since retirement is based on 55%. H.R. 100 would require larger deduction for unpaid deposits since retirement would be based on 100% credit for service prior to 1 Jan 69. SUMMARY OF RECOMMENDATIONS ON NATIONAL GUARD TECHNICIAN LEGISLATION Statement of Thomas A. Tinsley, Director, Bureau of Retirement, Insurance, and Occupational Health, U.S. Civil Service Commission, Thursday, June 12, 1975: (1) Pending legislation should not be passed. (a) Crediting technicians 100 percent for service before 1969 would result in duplication of retirement payments. (b) Legislation would cost the Government $128 million in unfunded liability. Statement of Raymond S. Webster, Special Assistant to the Deputy Assistant Secretary of Defense for Reserve Affairs, Thursday, June 12, 1975: (1) Legislation is too costly and would double the Government's expense for technician annuity. (2) The National Guard Technicians Act of 1968 is still viable as law with no outstanding need for amendment. Dr. Nathan T. Wolkomir, president, National Federation of Federal Employees, Tuesday, June 24, 1975: (1) Give technicians with pre-1969 service credit the option of contributing to the Federal retirement fund for said service. Mr. Charles Hickey, National Guard vice president, Thursday, June 25, 1975: (1) H.R. 100 could be financed if: (a) The Federal Government retrived the $19,606,000 it has paid into State retirement funds for technician's service. (6) A transfer of credit is arranged from the social security fund to the civil service retirement fund in the amount of $58,348,000 which the Federal Government contributed as the employer's share to provide social security coverage for National Guard technicians. (c) The matching contributions made by the technicians to the social security fund of $58,348,000 are recovered. Maj. Gen. Francis S. Greenlief, executive assistant, National Guard Association of the United States. (1) Avoid double payment of annuities to technicians if 100 percent creditation for all service is made law by: (a) Computing the amount of State retirement and social security payment generated solely by reason of the Federal payment and then deduct that amount of the retirement from the annuity. (b) Going to the employee's pay record, identifying the amount of the Federal payment made on his behalf to OASI and/or State retirement and retrieving that amount from those retirement systems. (2) Modify H.R. 100 or adopt another bill if it would have a better chance of escaping a Presidential veto. |