CORRECT CERTAIN INEQUITIES IN THE CREDITING OF NATIONAL GUARD TECHNICIAN SERVICE TOWARD RETIREMENT THURSDAY, JUNE 12, 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, Cannon House Office Building, Hon. Gladys Spellman [acting chairwoman of the subcommittee] presiding. Mrs. SPELLMAN. The subcommittee will come to order. The committee is reconvening to continue its deliberations on the 19 National Guard technician bills now in the subcommittee. Further hearings are scheduled in room 2216 of the Rayburn Building on June 24, 25, and 26. 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 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 first by hearing from Mr. Thomas A. Tinsley, Director of the Civil Service Commission's Bureau of Retirement, Insurance, and Occupational Health. STATEMENT OF THOMAS A. TINSLEY, DIRECTOR, BUREAU OF RETIREMENT, INSURANCE, AND OCCUPATIONAL HEALTH, U.S. CIVIL SERVICE COMMISSION Mr. TINSLEY. Thank you. I appreciate the opportunity to again appear before this subcommittee. I do have a prepared statement. It's not a great deal different from the position the administration has taken on similar bills over the past 2 or 3 years. Mrs. SPELLMAN. If you would touch on the main points of it, I think it would be helpful to me. Mr. TINSLEY. I believe the witness who appeared yesterday and the chairman adequately described the legislative history behind the current provision for coverage of the National Guard technicians which dates back to 1968, and was effective January 1, 1969. In effect, the law provided that technicians who previously had been considered State employees, now will be considered Federal employees. In the process, there was a problem as to what to do for the purposes of retirement and other benefits with the service that had been performed while they were considered State employees. This is somewhat similar to the situation that has been before this subcommittee before in other instances. The law enacted at that time provided that an individual who was a technician on or after January 1, 1969, would be covered under the Civil Service Retirement Act and would receive full credit in terms of the years of service, but in terms of determining the value of that service in computing his annuity, he would only receive 55 percent for each year of that pre-1969 technician service. The Senate report points out quite properly that the 55-percent figure was a compromise, and I'm quoting: The committee had a wide range of choices in considering the degree to which past technician service (which is considered State service except for the District of Columbia) should be creditable for future civil service retirement. It could have recommended no credit for past service on the permise that the technicians were similar to any other non-Federal employee and as such would accrue retirement credit only from the period in which he was a statutory Federal employee covered under the civil service retirement system. The other extreme would have been to recognize past technician service to the extent of 100 percent for civil service retirement purposes. The committee, after long and careful examination of all aspects of this matter, has unanimously concluded that the 55-percent credit represents a fair, equitable, and generous treatment of this matter. That is the way the 55-percent credit came into existence and is there today. There were various pros and cons offered at that time as to how the prior State service should be treated. Some of the arguments advanced were that these people as State employees were already provided benefits under social security and in instances under State retirement laws. There was some value to those. The arguments advanced for granting them full Federal credit were those advanced in other instances here. Although they were State employees, the type of service had a Federal benefit and the duties of the position had not really changed subsequent to 1969. As I indicated, the 55 percent was pure compromise. I have been unable, in reviewing the history, to really find out any rationale, other than let's split it close to the middle. Mrs. SPELLMAN. All right. The administration's opposition to this particular bill is based primarily on its cost and the unfunded liability? Mr. TINSLEY. The unfunded liability is $128 million; probably slightly higher, but that's the best estimate we can come up with. It would require a $7.9 million annual appropriation for 30 vears. As I've said before, the current administration is greatly concerned over any additional spending in these areas. The matter of how prior State service should be treated under the retirement law also enters into this; however, this case is not on all fours with some of the other bills that have been up here on State service. Mrs. SPELLMAN. What was the position of the Commission back in 1967? Mr. TINSLEY. I believe the position of the Commission and the administration at that time was that these technicians should be considered Federal employees. The bill that was being considered involved a number of matters concerning this technician service, and the primary thrust of that bill was to make them Federal employees, and give them all Federal benefits. It is not quite clear, at least in my mind as to whether or not at that time, and I was not a participant in the 1968 consideration of this bill, as to whether or not that went as far as granting them full credit retroactively for all prior State service. Subsequent to that time, at least in the last two Congresses, the Administration and the Commission, as I have indicated have pretty much taken the position I've taken today. Mrs. SPELLMAN. I understand that the Senate passed S. 584 last Tuesday, which is a companion bill to this one. Mr. TINSLEY. It was reported to the full Senate by the committee. As I understand it, the bill is a companion. I understand there was an amendment to it. I don't know what it was and the bill was reported without hearings. Mrs. SPELLMAN. What position did the Commission take on that bill? Mr. TINSLEY. We had not been asked to report on the bill. The fact that the Senate committee took the bill up in a rather hurried fashion, left me to believe that they really preferred not to have our position. Mrs. SPELLMAN. Of course, you indicated that you weren't with the Commission or in the position to be spokesman for the Commission back in 1967. Do you have any idea why there would be a reversal of the position on the part of the Commission? Mr. TINSLEY. Well, I think since that period of time, more and more groups have been petitioning Congress to provide Federal credit for prior State service. Since that time, the financing provisions were placed in the civil service retirement law, and the attendant publicity given to the cost since the financing provisions were placed in the Civil Service Retirement Act in 1969. Now each time Congress considers a bill its cost is before it and if enacted, you pay for it each year. Prior to that time, nobody worried too much about whether the money was there to fund it, but I think some cost-consciousness has also entered into it; reflecting a little bit on how liberal you want to be. Mrs. SPELLMAN. How many people are we talking about. Mr. TINSLEY. There were between 40,000 and 45,000. Now, those were the numbers in 1969. I don't know if it has changed a great deal today. Perhaps the National Guard Bureau would be able to give you the exact figures. This bill goes a little further than earlier bills and gives credit for this service to those who are not now in technician positions, but are in other Federal positions covered under the retirement system. As to how many of those people are in this situation we don't really know. We really have no way of knowing how many former people with technician service are now Federal people, employees in other capacities. It could be just a handful. I don't know what the turnover has been over the years in technician positions in the States, but it certainly would not be as large a number as those that we were discussing in these other areas. Mrs. SPELLMAN. Then, if your figures are right, how much would this cost? Mr. TINSLEY. Liability here would be $128 million. By comparison to some other figures you've heard from me up here, the annual amortization 30-year payment is $7.9 million a year. Mrs. SPELLMAN. Chairman White. Mr. WHITE. Thank you very much, Mrs. Spellman. Mr. Tinsley, there are some matters that your testimony raises in my mind and I only ask them out of ignorance. You mentioned that some of the National Guard technicians are already qualified under a Federal retirement system as National Guardsmen? Mr. TINSLEY. Some of them; by virtue of the fact that, in addition to being civilian technicians, each one of the individuals is required to be a military member. After a period of time, 20 years, 30 years, many of them do acquire some pension rights under the military system. Mr. WHITE. Even though during the 20 years, they may not have been in Federal service, they may acquire it? Mr. TINSLEY. Yes. It is based entirely on the military end of the service: not civilian. Mr. WHITE. OK. Now, will this bill lead to any kind of duplication? Mr. TINSLEY. There could in some instances be some duplication; I think some arguments have been advanced to this in the past. I don't know exactly how many of these people wind up with duplication. I would suggest, Mr. Chairman, the Defense Department or the National Guard Bureau would be in a much better position and more expert than I in terms of being able to describe to you the pension situation from the military point of view. Mr. WHITE. Insofar as this bill could very well receive favorable consideration by Congress, by this committee, then the full committee, then the House, going to the Senate, it seems to me it might be well to include language to alleviate any duplication, if that duplication would be inequitable: therefore, invite from you any language that would prevent such duplication. Mr. TINSLEY. All right, Mr. Chairman. I would be glad to do that; furnish that proposal to tend to eliminate anv dual pavments by the Federal Government to you. Mr. WHITE. Would H.R. 100 or a similar bill require retroactive annuity payment? Mr. TINSLEY. As I interpret the bill, you could interpret it to go back completely to January 1, 1969, and make adjustments for those who have already retired. At this moment, we have been unable to obtain a firm figure on exactly how many of these people may have retired in the interim. |