Mr. WHITE. Talking in terms of the retirement law, should the bill go back-would it be equitable to go back and accept those who have retired or should it compensate those already in service?

Mr. TINSLEY. As a matter of principle, we have always opposed legislation that has attempted to go back and apply retroactively in areas like this. We have always felt that any changes should be prospective.

Mr. WHITE. Is your $128 million unfunded liability predicated on going back and picking up this annuity?

Mr. TINSLEY. No.

As I indicated earlier, Mr. Chairman, that $128 million figure is really our minimum figure. There are other features of this bill we've been unable to get a firm figure on as to how many other people would be affected and to what extent they would.

However, the bulk of the cost here would be in that $128 million.
Mr. WHITE. I have no further questions.

Ms. SPELLMAN. Thank you, Mr. Chairman. Counsel, would you like to ask a question?

Mr. MCCLUSKEY. Yes. Mr. Tinsley, are the National Guard technicians presently in the competitive service?

Mr. TINSLEY. Yes.

They're under regular Federal civil service.

There are some peculiarities in terms of National Guard technician service.

There are certain things that happen with them that normally do not happen with other individuals; for example, as a requirement, they must be able to maintain their National Guard military status.

In the event for any reason, either physical or any other reason, they cannot remain qualified from the military standpoint of the National Guard, they are automatically separated from their technical position.

That makes them unusual. There are no such requirements in most other positions in the Federal Service. This would also give these individuals place them in a position that really they are perfectly capable of performing civilian duties, but not military ones.

If they were separated even for the reason of military, they would immediately be eligible for early retirement on the basis of involuntary separation, which normally you would not find in other situations.

There is also a disadvantage, or could be a disadvantage there. They could very well be considered disabled from the standpoint of the military part of the service and we would not consider them so from the civilian technician standpoint and therefore, would not give them the benefit of disability retirement.

Mr. MCCLUSKEY. Presently when a civil servant retires and comes back and is reemployed, the annuitant cannot collect the whole salary. Isn't that correct?

Mr. TINSLEY. That's right.

Mr. MCCLUSKEY. Now, if one retires from military, comes to work for the Government, he collects his full retirement or full annuity as a civil servant, but then he can pick up full salary. Is that correct? Mr. TINSLEY. Just about all enlisted military who retire from the military are entitled to receive both military retirement pay and their full salary while working for the Federal Government.

55-933 - 75-2

Mr. WHITE. May I intervene at this point?

That's only if the employee gets a waiver of the reduction of his annuity or reduction of his

Mr. TINSLEY. Not in the case of military retirement, where you're dealing with the enlisted and some reserve members.

Mr. WHITE. With regular officers

Mr. TINSLEY. The Dual Compensation Act. I think what you may be confusing with this is the other situation involving civil service retirement and one becomes reemployed.

In that instance, the salary is reduced by the full amount of his annuity. In the case of military retirement, the officer who comes into the Federal Service, civilian service, it's the Dual Compensation Act that is controlling.

Mr. WHITE. If I can make the distinction between enlisted and reserve as compared to regular.

Mr. TINSLEY. I hesitate to answer that, Mr. Chairman, because it's been sometime since I've gone back and reviewed the legislative history of the Dual Compensation Act.

Mr. MCCLUSKEY. I have one last question, Mr. Tinsley, and that's outlined in the latter procedure, how 55 percent retirement credit can be compromised, because the Government had contributed so much money to the social security retirement fund, and so forth.

When the Commission has accepted other groups into the retirement system, have any other groups to your knowledge taken a reduced annuity, based on what the Federal Government has placed into the State retirement or social security?

Mr. TINSLEY. Well, I think you're really asking two questions: First, are there any offsets?

Congress last year in passing the minimum annuity bill placed offsets in the law. There are other laws on the books where there are, if not offsets, there are other requirements. In the case of some Veterans Administration benefits the individual can receive benefits from the Veterans Administration only if his income is under a certain amount of money and that income would include other payments from the Federal Government.

So, you do have a situation there where a civil service retirement has become increasingly more of a problem in recent years with the cost of living increases for that individual to maintain a retirement income below where it will not knock him out of the VA pension.

There are several other situations involved which I'd be glad to furnish to the committee for the record.

There are some clear-cut elections, where you've got to take one or the other, and you elect which ever you want. Now, in terms of the novelty of using the service for one purpose, in other words, eligibility and then saying for that service we won't pay you for 100 percent of that service, we'll only pay on the basis of 55 percent, this is somewhat novel.

There's only one other situation. I've been trying to think of it. Some years ago where there was some service, questionable Federal Service and someone felt some benefits should be paid for, there was a provision made that for each month of that type of service, there would be added to the annuity a certain amount.

It was a relatively small amount and I think at that time it was stated in dollars as opposed to a percent.

That, too, I'll be able to furnish for the record, if you wish, Mr. Chairman, in order to give you the earlier precedent in this area. In my own judgment, and I think in the commission's judgment, in areas such as this, I don't think compromises ever resolve anything for very long.

In many areas compromise is the way of life, and the only way you can resolve issues. Here, I think in these situations, as I've stated, I think on one or two occasions in the past, either this service is Federal service or State service; either the Federal Government readily accepts responsibility for it, or it does not.

If it is going to go the route of accepting responsibility for it, I can't see any sense in horsing around saying it's really good or worth only 55 percent.

It's either good or not good.

Mr. MCCLUSKEY. So, you're saying in your own personal opinion it should either give 100 percent or

Mr. TINSLEY. No; I'm saying this, my personal opinion is I don't think this particular type of compromise ever solves a problem; otherwise, if it did, we wouldn't be here today.

If you were to move it to 75 percent tomorrow, we would still be here 2 years from today.

Mr. WHITE. Mr. Taylor?

Mr. TAYLOR. Thank you.

Mr. Tinsley, I apologize for being late.

My understanding indicates 45,000 technicians in this category. Mr. TINSLEY. That's our estimate.

Mr. TAYLOR. Is it the provision of this bill that this would permit persons to receive benefits who left the technician program prior to 1969 ?

Mr. TINSLEY. If they came back in regular, Federal civilian service or if they are now in the Federal civilian service in another capacity, yes, it would.

Mr. TAYLOR. Even though they left the service?

Mr. TINSLEY. Yes.

It has that affect.

Mr. TAYLOR. What is the average age of a technician?

Mr. TINSLEY. Retired?

Mr. TAYLOR. Average retirement age.

Mr. TINSLEY. I don't believe we've had too many retire under the civil service retirement from the date the law was enacted in 1968. The law had a provision in it that he had to be a technician in 1969; therefore, limiting the parameters of your coverage.

I honestly don't know the average age of their retirement in our system. These technicians, I do not think would be individuals who would be up in age.

The fact that they have to maintain a military capability, would move these individuals to a lower age than the normal employee. Mr. TAYLOR. Is my information correct? Unfunded liability is approximately

Mr. TINSLEY. At least $128 million. The 30-year funding payment, that includes the interest, would amount to $7.9 million a year and

if you multiply the $7.9 million-for the sake of my simple arithmetic, if I use $8 million, what the U.S. taxpayers will pay over a 30-vear period for that benefit is $240 million.

Mr. TAYLOR. One more question, Mr. Tinsley.

When this law was enacted in 1969, at that time, were employees given the option to willingly remain under the State retirement system?

Mr. TINSLEY. My recollection is they were given the option to go one way or the other. Such election is irrevocable. If he decided to stay with State, that was it.

I don't know how many exercised that option.

Mr. TAYLOR. Thank you, Mr. Chairman.

Mr. WHITE. When you spoke of irrevocable when you stated they stayed in the State retirement system, does this bill change that at all? Mr. TINSLEY. I'm not sure, Mr. White.

Mr. WHITE. You don't think it would?

Mr. TINSLEY. I don't think it would, but I think it would be a question here.

Mr. WHITE. Let me ask you this.

Suppose a technician worked for over 5 years, thereby I presume he would qualify for the retirement of civil service; this happened before 1969.

Would he then be eligible to come into retirement?

Mr. TINSLEY. If he was in the Federal system today or came in? Mr. WHITE. That's the criteria.

Mr. TINSLEY. He would have to be under the system today or in the future.

Mr. WHITE. Either officers or enlisted men; if it is an officer in the National Guard, a technician, would he be eligible to receive both in the retirement system according to what vou said there; in the same category as a reserve officer and an enlisted man?

Mr. TINSLEY. Reserves, enlisted, yes.

I'm trying to visualize a situation here where you have other situations and I can't visualize one. It's highly unlikely that any such situation would occur.

Mr. WHITE. You know what would be very helpful, certainly to me, maybe to some other members, would be a graph to show what the present law is; how it affects their various annuities, including how the social security is affected, the civil service retirement and whatever other retirement system you have.

How the passage of this act will alter it. Can we get that from the Civil Service Commission?

Mr. TINSLEY. We'll try.

Mr. WHITE. I certainly would appreciate it. We may need it very quickly.

Mr. TINSLEY. I don't know how quickly we can put it together; depends on how much information and expertise I have.

Mr. WHITE. So many factors in here; it's hard to encompass them all at one time.

Mr. TINSLEY. I don't know whether the Department of Defense National Guard Bureau would be a better resource than the Commission. They're very familiar with the other areas here, and other areas are what you're primarily interested in-social security; the retirement

type situation. They would certainly have the expertise, far more than we would.

Mr. WHITE. We'll ask them, then.

Mr. TINSLEY. If not, I'll be glad to talk to them.

Mr. WHITE. You all do talk occasionally and can work something

out.

Mr. TINSLEY. We will. Thank you very much.

Mrs. SPELLMAN. Mr. Tinsley, if you were to allow retroactive credit for tenure status as proposed by this bill, what problems might be created?

Mr. TINSLEY. With this bill, again, despite my statement earlier, with this particular bill, in terms of retroactivity, the bill is designed to do just that.

It is pretty difficult to avoid retroactive application here, because it's that back service that's in question, you're trying to straighten out. Now, the only question of retroactivity is where a technician between 1969 and today has retired. The question of retroactivity is whether you go back to the first day he retired, for example, if he retired in 1972 and adjust the annuity he is now receiving based on the earlier formula. Since you're dealing with only a period of 5 years, in all probability, not a great many of these people retired. If they did, they have only been on the rolls for a relatively short period of time. The amount of money that you would be dealing with in terms of that past service would not be large, but the large part would be the future cost.

So, because of the peculiar nature of this particular situation that we find ourselves in, in this particular bill, we are almost dealing with something that is a retroactive situation.

We took care of the future in 1969 when we said from this day forward the technician is the equivalent of a Federal employee and is entitled to all the benefits. That took care of the future.

So, I know of no way to avoid it.

Most questions are of retroactivity, basically, because that's what the problem is we're dealing with.

Mrs. SPELLMAN. Isn't military service performed after 1956 deducted for annuity purposes?

Mr. TINSLEY. It cannot be used if that service entitles an individual to social security coverage and benefits, it cannot be used both ways. It is not counted in civilian service; however, I explained it is counted and is paid for up to the date, usually age 62, that the individual is entitled to begin receiving social security benefits.

At that point in time, will back out of military service and reduce the civil service annuity.

Although I haven't double checked, I believe the same situation would apply here; but there it would be only the military service that would not be creditable.

This civilian technician service would be perfectly legitimate; there would be no offset.

Mr. MCCLUSKEY. Mr. Tinsley, I think the chairwoman is trying to say, asking you what the problems might be relating back, specifically to the 1968 act, just talking specifically about the technicians, themselves, in service as relates to leave, annual leave, sick leave, and everything else.