of the waterway, and has acquired by condemnation all lands and riparian rights abutting the waterway. Suitable arrangements have been made for carrying on of water-borne commerce at other sites in the harbor. Information available to this Department is not sufficient to enable it to estimate the fiscal effect of enactment of this measure. This report has been coordinated among the departments and boards in the National Military Establishment in accordance with procedures prescribed by the Secretary of Defense. The Bureau of the Budget advises that there is no objection to the submission of this report. Sincerely yours, GORDON GRAY, Acting Secretary of the Army. O PROVIDING CERTAIN BENEFITS FOR ANNUITANTS WHO RETIRED UNDER THE CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, AS AMENDED, PRIOR TO APRIL 1, 1948 JUNE 6, 1949.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. KARST, from the Committee on Post Office and Civil Service, submitted the following REPORT To accompany H. R. 4295] The Committee on Post Office and Civil Service, to whom was referred the bill (H. R. 4295) to provide certain benefits for annuitants who retired under the Civil Service Retirement Act of May 29, 1930, as amended, prior to April 1, 1948, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. The amendment is as follows: (a) On page 2, strike out lines 15 through 18, and insert in lieu thereof the following: SEC. 2. Subsection (b) of section 8 of the Civil Service Retirement Act of May 29, 1930, as added by this Act, shall become effective on the first day of the second month following the date of enactment of this Act, and no survivor's annuity or increase in annuity under such subsection shall accrue for any period prior to the effective date of such subsection. PURPOSE OF AMENDMENT Amendment (a) is a technical amendment to perfect the language of the bill so that the legislation will become effective upon the date intended. STATEMENT The purpose of this bill is to allow each annuitant who retired prior to April 1, 1948, under the Civil Service Retirement Act of May 29, 1930, as amended, to retain or to accept an increase in his annuity of 25 percent, or $300, whichever is the lesser, and at the same time designate his surviving spouse to receive one-half of his annuity, but not to exceed $600. Under section 8 of the Civil Service Retirement Act of May 29, 1930, amended by Public Law 426, Eightieth Congress, which became effective April 1, 1948, annuitants on the civil-service retirement rolls were given the choice of: (1) having their annuities increased by 25 percent, or $300, whichever was the lesser, or (2) designating a surviving spouse to receive one-half of their annuities, but not to exceed $600. This choice which faced the 125,000 annuitants then on the civilservice retirement rolls was, in the opinion of the committee, most difficult. Twenty percent of the annuitants decided to provide their spouses with survivorship annuities and forego the increase, but 80 percent took the 25-percent increase or $300, whichever was the lesser, because of their immediate need for additional income to offset the increased cost of living. Hearings were conducted at which time representatives of the Federal employee and retired Federal employee organizations appeared and unanimously endorsed the legislation. A representative of the Civil Service Commission objected to the enactment of the bill because of the cost factor. The Commission estimated that the total cost between the date of enactment of the legislation and the time the last payment is made under the provisions of the bill would be $157,000,000. The Commission stated it would not ask Congress for an additional appropriation of this sum immediately to supplement the retirement and disability fund, but annually, for the next 15 years, the Commission would request an appropriation of $13,600,000 for the retirement fund. It was pointed out that at the present time there is $3,094,000,000 in the civil service retirement and disability fund, of which $1,200,000,000 is obligated to pay the annuitants now on the retirement rolls. The passage of this legislation would increase such obligations by $157,000,000. After taking into consideration the fact that Federal employee contributions to the fund since the inception of the civil service retirement system have been $2,234,000,000, and the fact that only $1,912,000,000 has been paid out to annuitants during the same period, the committee believes that increasing the obligation to the annuitants covered by the bill is justified because of the benefits to be received by such annuitants. Even though Congress does not appropriate the additional $13,600,000 annually for the. next 15 years for the retirement fund, there still would remain sufficient funds to cover this added expense. It is significant that the average age of the approximately 125,000 annuitants who would benefit by the passage of this legislation is 70 years, and that the average annuity of those annuitants who provided for their spouses under Public Law 426, Eightieth Congress, is $890 per annum. Most of these former Federal employees rendered long and faithful service for the Federal Government, and the committee believes they are entitled to the increased annuities provided for in the bill, as well as the right of providing for their widows or widowers. The report of the Civil Service Commission with respect to this legislation, dated May 3, 1949, is as follows: UNITED STATES CIVIL SERVICE COMMISSION, Hon. TOM MURRAY, House of Representatives. DEAR MR. MURRAY: Further reference is made to your letter of April 20, 1949, relative to H. R. 4295, a bill to provide certain benefits for annuitants who retired under the Civil Service Retirement Act of May 29, 1930, prior to April 1, 1948. The amendment of February 28, 1948, to the Civil Service Retirement Act authorized an increase in annuity of each annuitant then on the roll of 25 percent, or $300, whichever was the lesser. Further stipulation was made that each such annuitant could elect in lieu of this increase to continue in receipt of his original annuity and name his wife to receive upon his death one-half such original annuity, the survivor's benefit not to exceed $600 per annum. Similar election was accorded female annuitants as regards naming their husbands as survivor annuitants. The bill proposes that those persons who accepted the increase, shall be permitted to retain such increase, and in addition thereto be entitled to survivorship annuity for his or her spouse to whom he or she was married prior to April 1, 1948, equal to one-half of his or her annuity prior to the increase but not to exceed $600 per annum. Those annuitants who elected the survivor benefit in lieu of the increase would under the bill have their annuity increased by 25 percent of $300, whichever is the lesser. The spouse of any annuitant whose death occurred between May 1, 1948, and the effective date of the bill would be allowed the survivor annuity. The benefits under the bill would become effective and payable on the first day of the second month following the date of approval. The additional benefit accorded the approximately 125,000 annuitants on the roll as of April 1, 1948, was a gift from the Government over and above the annuity granted at time of retirement under the then governing law. The individual made no contribution, financial or otherwise, toward this increase. It was clearly the intention of Congress that each annuitant be given the right to elect the plan best suited to his needs but that he could not have both items of coverage. It is estimated that to provide for such guaranty would immediately increase the liabilities of the civil service retirement and disability fund by $157,000,000. Increased disbursements would total considerably more than this figure, since $157,000,000 is the estimated amount, which if immediately invested and supplemented by interest at 4 percent, would be required to meet increased disbursements as they become due in the future. Additional payments in the first year are estimated at around $6,000,000; they would increase to a peak of about $20,000,000 and then gradually decrease. The cost of the proposal, which would be borne entirely by the Government, might be met by increasing appropriations over a limited period, such as 15 years, during which the bulk of the disbursements would be made. On this basis, the level annual cost for 15 years would be 13.6 million dollars. As heretofore stated, the benefits provided by this bill are purely a gift from the Government costing approximately $157,000,000. In view of the cost involved, the Commission is constrained to recommend adverse action In view of the specific request for immediate reply, the Commission has not been able to clear this report with the Bureau of the Budget. By direction of the Commission: Sincerely yours, HARRY B. MITCHELL, President. CHANGES IN EXISTING LAW In compliance with paragraph 2a of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as introduced, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, existing law in which no change is proposed is shown in roman): CIVIL SERVICE RETIREMENT ACT OF MAY 29, 1930, AS AMENDED SEC. 8. (a) In the case of any officer or employee who before the effective date of this Act shall have been retired on annuity under the provisions of the Act of May 22, 1920, as amended, or section 8 (a) of the Act of June 16, 1933, the annuity shall be increased, effective on the first day of the second month following the month in which this Act is enacted by 25 per centum or $300, whichever is the lesser: Provided, That each such annuitant may, prior to the effective date herein prescribed, elect to retain his or her present annuity, in lieu of the increased annuity provided by this section, and name his wife of her husband to receive upon his or her death one-half of his or her present annuity but not to exceed $600 per annum during the remainder of the life of such surviving husband or wife and upon the death of such survivor no further annuity shall be due or payable. Any such annuitant who dies during the period beginning on February 29, 1948, and ending on April 30, 1948, leaving a surviving wife or husband, shall be deemed to have made the election authorized in the foregoing proviso and to have named such wife or husband to receive an annuity as provided in such proviso, but no such annuity shall become due or payable to such wife or husband prior to April 1, 1948. Except as provided in this [paragraph] section, the amendments made by this Act shall not apply in the case of officers and employees retired prior to the effective date of this Act. In case any officer or employee shall have been separated subsequent to January 23, 1942, and prior to the effective date of this Act and have acquired title to annuity under section 7 of the Act of May 29, 1930, as amended, beginning after such effective date, his rights shall be determined and annuity computed as though this Act had not been enacted. (b) (1) In the case of any retired officer or employee mentioned in the first paragraph of subsection (a) who did not elect a survivor's annuity in accordance with the proviso in such subsection, there shall be payable upon his or her death, to his or her wife or husband to whom the annuitant was married before April 1, 1948, an annuity equal to one-half of his or her present annuity (excluding the increase therein under subsection (a)), but not to exceed $600 per annum, during the remainder of the life of such survivor. The provisions of this paragraph shall apply in the case of any such annuitant who died subsequent to April 30, 1948. (2) Any such retired officer or employee who elected a survivor's annuity in ac cordance with the proviso in subsection (a) shall be paid an increase in his annuity of 25 per centum or $300, whichever is the lesser. |