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PROGRAM STATEMENT no 10. 7. YUOVEZT am tompny to paar hartosra his maintenants arorabie action on Hotelarion to provita 100 tot ooit tot sorting inte samar? I. 1949, the
svipava Anin of the National (arat Tehnicsra 20 %. Ilstead of the 55 print armeilt which that Am promes
A. Vou know, I introdnoos in his Canzoes IR DA Which was s-sponsored Rv M fort, Mr. Mitenojot ar 7ort. fr hika. Mr. Mos i Indiana. Vír. 1411, mnd Me Coonran. The rest vast the hills o bis Congress, at last funt, all with the name oh jestive of Zving here teraz nes and women-and their murvivor the patiroinent Dements a rich her are 'airty entitiei.
A short review of the history of this station has been the Camnet Committee on ketteral Staff Reptiraamat yerine poommaa n be Parisiene (D. #8. 11. Doe No. 402, 9th Cong 21 tease hat Vadonai Gnarri Regnicans (all of whom ware paid aitiraly frora Pergi sinne at ara ikea y Feieral author Itine) be treated as fresloral omplogan 'or proneat porposes. The C.S. Civil Service Commission pocommends the establishment of his cars with 100 percont credit for all prtor ring. The Igarment of Defense nera. The Omee of Managemnetit
, and Budget andra. FR2. hariring his frineple, was Supported by Administration withstan and Jaseedi the Emu a Fabrary 20, 11907. As passerl by the hons, it would have provides 1 percent prior service crowlit for terhnirang.
When the Senate digagropi, Honge conforses are insticcesetilly for restoration of title II of the hill which covoreri Vational Guarri technicians (Confer. ence report, im HR 2, Honse Report. Vo. 925 darei Vovember 14, 1967).
The Senate Armed Servicpa Committes derisert the traily inprecertented 57 percent formula, and in its report of July 22, 14. to accompany S. 3863. (Sezate Report No. 1446, Asth Congress, 21 Session), gave an extensive if insatisfy. ing, explanation of its reasone
As this Committee knows, in every other instance from May 19 1920. (the Inception of the Federal Civil Service Retirement System) phrough July 1. 1960, when thousands of Agricultural Stabilization County Committte employees were brought under the Federal Civil Servis Retirement by Puhlie Law 1568. stery single one of thouse groups was given full credit for all prior service. The groups include rural mail carriers. D.C. Government employees, the F.B.L. Coagressional emplovops, Merlots of Congress, and a host of others, including those brought under hy administrative action anthorized by the Congress.
Full credit was given to the Caperative Agricultural Extension employees who were administratively cowered 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 56-568 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 1830 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, Maganchusetts, Nevnda 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 Necurity Act. Wliy should their annuities be reduced to reflect the Social Security Art contributions made by the facteral Government to technicians in other Biales y
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 34) but did not have and, in all probability, never would acquire a vested interpet under the state plan, or derive any benefits whatsoever for their prior particimilon. Assuing a windinil to the Stntes 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
Similarly, why should technicians in the 31 states which did not cover them
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
d interpartici d Fed t those
y the Department of Defense, Civil Service Commission, Office of Mopment and Budget, and the House of Representatives in 1967. While not adopted by the Senate in that year, the Senate has supWod it, Mr. Chairman, and in the last 2 or 3 years have sent bills over that did have the 100 percent credit.
As the committee knows, in every other instance from May 22 of 7920), through July 1, 1960, similar groups of employees with the Fedal connection were given full credit for prior service. It is this same equity and fair treatment that our National Guard technicians are sekking, through passage of H.R. 100. There have been many inaccurate and incomplete statements made concerning coverage by State retirement programs and our social security benefits for these technicians. As pointed out in my detailed testimony. such statements do not fully explain the situation and are highly misleading when applied to all National Guard technicians. Mr. Chairman, over half of the technicians are not covered by State retirement because they have not invested and probably never will. Almost half of the technicians have not attained the required number of quarters for social security coverage and probably will not. Becauuse of this great disparity and amount of coveraage available to National Guard technicians. I think it is very important that we pass H.R. 100 in order that all technicians be treated equally in their
retirement years. More importantly, the bill would afford the same type of coverage to technicians as given to other similar Federal employees. Mr. Chairman, I will accept the Civil Service Commission's 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. I view it as the amount of money of which this group of employees has previously been denied. I see it as the amount of money that must be expended in order to insure equal pay, including equal retired pay, for equal work.
Mr. Chairman, this is the concept applied to other Federal employees and no less should be done for our National Guard technicians. I strongly urge this committee to correct this situation which the current law has brought about.
Mr. WHITE. Thank you very much, Mr. Montgomery. You, as having extensive service and also, I understand you are a general in the National Guard and have intimate knowledge of their needs and the disparity that has existed through the oversight of the law. You spoke of a 1967 arrangement between the various agencies of Government. Is this the arrangement you refer to in your prepared statement?
Mr. MONTGOMERY. In 1967 the House of Representatives, with the approval of the OMB and also of the administration, did pass a 100 percent credit retirement for the National Guard technician. The Senate saw fit at that time not to give 100 percent credit and they unprecedentedly came up with the figure of 55 percent credit. That was adopted in conference. That was accepted. That's the way the 55 percent came about. I guess my point was that the House in its wisdom, did pass 100 percent credit and the Senate changed it. Since that time, almost every year the Senate has sent a bill over here raising it to the 100 percent credit and the House has not taken any action on it.
Mr. WHITE. You spoke of a $128 million figure cited from the raise of the 55 percent retirement to 100 percent retirement. You probably
don't have this figure. This would not include the cost voted in the
Mr. MONTGOMERY. It does not.
Mr. MONTGOMERY. This is the $128 million figure that would cover the 25,000 technicians.
Mr. WHITE. In your testimony you cited, among other States, Connecticut, Nevada, Massachusetts and Ohio, that were not covered by the Social Security Act, and their States. These are among the States you are speaking of? You say about 50 percent do not have such coverage.
Mr. MONTGOMERY. That is correct. Mr. Chairman, about half the technicians that we mention. Let me put it like this: They did not get in 40 quarters under the social security program, so they would draw no social security. This has been one of the windfalls referred to by some as to why the bill has not been enacted—that these technicians would draw social security. This is not correct. Only about half of them get in the 40 quarters, and those who did get in the 40 quarters, would draw the minimum because they have not paid into the program since they came under this civil service retirement.
Another large group of National Guardsmen, about 20 States out of the 50 States, had State retirement programs that covered technicians at the time the 1969 technicians bill was enacted. In the other 30 States there was no coverage, and I might say that in my particular State, we had the technicians covered. When we passed the 55 percent technicians bill they were taken out from under State laws and the money they had contributed was sent back to them. They have no State retirement coverage. Some of the technicians did qualify for retirement either by length of service or disability; so there are obligations against the State retirement systems.
Mr. WHITE. For the record, could you describe the duties of the National Guard technician, what generally would they do so we can have this in our minds.
Mr. MONTGOMERY. He has a dual purpose Mr. Chairman. He is a full-time civilian employee under the adjutants general of the individual States and he is paid by the Federal Government. Most are also members of the National Guard. He has a dual purpose, in effect, when there are State emergencies. The Governor of the State can call this technician to State military duty in natural disasters such as tornados, floods, storms, and for other purposes such as civil disorder. He can also be called to active Federal military duty by the President of the United States, who is also his Commander-in-Chief. His main civilian day to day job is to take care of the equipment and supplies and perform administrative duties in the different armories in your community and my community, and Mr. Daniels' community. They plan for and exercise supervision over military training at drills and during the 2-week annual training duty. Others maintain and repair the tanks, trucks, airplanes, helicopters, and other equipment. Still others perform the administrative tasks required by the Army and Air Force.
Mr. WHITE. He is a full-time employee? That is the only job he can hold ?