Following our recent conversation, I have checked into your status
under the Civil Service Retirement System and the annuity payable to
your widow. under the Judicial Survivors Annuity System.

As I understand the situation, you have filed an Application for
Retirement with the Civil Service Commission in which you elected
a reduced annuity with benefit to widow. The annuity was suspended
in view of your appointment as United States District Judge. When
you obtain Senior status the annuity payments will commence.
Whether or not you perform any active service as a Senior Judge would
not affect the payment of the annuity under the Civil Service Retire-
ment System.

You have not made a deposit under the Judicial Survivors Annuity System
for your Congressional service. Deductions began February 3, 1966,
upon your entrance on duty as a judge. Under the provisions of the
Judicial Survivors Annuity System, service for which deposit has not
been made may be eliminated by the widow if it is to her advantage.
Therefore, at the time of your death, this agency would contact the
Civil Service Commission as to the exact amount payable to your
widow under the Civil Service Retirement System. We would also
compute the annuity payable under the Judicial Survivors Annuity
System, both with and without using the Congressional service. We
would then determine whether or not it would be to your widow's ad-
vantage to use the Congressional service under the Judicial Survivors
Annuity System and forfeit the annuity under the Civil Service
Retirement System, or whether she would receive more by eliminating
the Congressional service under our system and securing an annuity
under both systems.

With kind regards, I am

Sincerely yours,

Schward & Harstadion

Edward V. Garabedian

Assistant Chief for Finance

Business Administration

Mr. WHITE. The statement which the subcommittee has received from Congressman Derwinski will appear in the record at this point as though presented in full.

STATEMENT OF HON. EDWARD J. DERWINSKI, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. DERWINSKI. Mr. Chairman, I welcome the opportunity to testify before you this morning on H.R. 11738. This legislation provides legal authority to suspend civil service annuity payments for periods during which an annuitant is entitled to receive salary as a justice or judge of the United States.

This legislation being the focal point, gives us the opportunity to review this entire matter.

I cosponsored this bill because of the serious problem brought to our attention by the Civil Service Commission concerning the payment of dual compensation to Federal justices and judges.

Prior to 1956, the Civil Service Retirement Act generally prohibited reemployment of annuitants other than in exceptional cases. The 1956 amendments to the Retirement Act enacted the present rule for reempolyment of annuitants. These amendments removed the bar to reemployment of annuitants, but with the requirement that such persons re-entering Federal service, either in an elective or appointive position, would have the salary of that position reduced by the amount of the annuity they were receiving. In the case of Members of Congress who are drawing an annuity, the annuity is terminated during the period of reemployment.

The Civil Service Commission, during this time, took the position that appointment as a Federal judge was considered within the purview of the provision concerning reemployed annuitants and such. persons have been so treated. In the case of a judge who is appointed to hold office during good behavior-life-the Civil Service Commission has been suspending payment of civil service annuity because the Constitution prohibits the reduction of such a judge's salary.

Recently, the Civil Service Commission has received claims from some judges who are also retired Federal employees-for the retroactive payment of such annuities on the basis that the Civil Service Commission had no authority for the suspension of their annuities. The Acting Assistant Attorney General, in a recent opinion, held that the Civil Service Retirement law does not authorize the discontinuance of these annuities, nor does it prohibit payment of an annuity even though the judge is drawing his judicial salary.

Therefore, the Civil Service Commission is obliged by law to honor the claims for retroactive annuities of those individuals who had earned an annuity, immediate or deferred, under the Civil Service Retirement System and were appointed as Federal judges. It is estimated by the Commission that there are at least 100 judges who may claim deferred annuities and there are at least six outstanding claims by judges or survivors of judges now before the Civil Service Commission for retroactive payment of annuities of substantial amounts, including one for over $100,000, another for over $90,000, and one survivor for over $18.000.

In enacting the 1956 amendment to the Retirement Act, the Congress established the policy on reemployment of annuitants. In doing so, it also provided that a reemployed Federal employee should not receive a "windfall" in the payment of both his annuity and his pay as an employee. Accordingly, a reemployed annuitant's pay is reduced by the amount of his annuity.

The 1956 amendments also provided that judges were not employees subject to the Retirement Act and further provided that an annuitant who became reemployed as judge would earn no supplemental or recomputation of annuity benefit during his service as judge. While the amendments did not speak directly to whether Congress expected that an annuitant who became a judge would continue to have his annuity suspended or would become subject to reduction of his judicial salary by the amount of his annuity, neither did the amendments provide that such annuitant should get both his annuity, and judicial salary. The 1956 amendments did continue to provide for the reduction of salary by the amount of annuity upon reemployment in covered or noncovered service, except for cases of annuitants retired involuntarily and disability annuitants not found recovered or restored to earning capacity before age 60, who were barred from receiving both annuity and salary by regulation. Therefore, theoretically, annuitants who were reemployed as judges after the 1956 amendments were enacted should have been subject to reduction of their salary by the amount of their annuity.

The question now is did the Congress intend in 1956 to allow judges and justices of the United States to receive dual compensation of judicial pay, in addition to retired civil service pay. I do not think so.

The 1956 Retirement Act amendments continued the policy that reemployed Federal employees must have their salaries reduced by the amount of their annuities, and allowed that a former Member of Congress who becomes employed in an appointive or elective position, must have his annuity payments discontinued during that employ

ment.

With this in mind, I question whether the Congress on the one hand intended to suspend the pay of retired Federal employees and members on reemployment in the Federal Government, while allowing judges and justices of the United States to receive both salary and retired pay.

Federal judges and justices are appointed to life terms and received an annuity equal to their pay, for which they make no contributions. That to me is a rather generous retirement system.

In contrast, Federal employees and Members of Congress are subject to, the civil service retirement system, for which they must contribute 7 and 8 percent, respectively. And, in order to retire at the maximum rate of 80 percent of their high 3 years of service, not 100 percent as judges and justices are entitled to, they must work in excess of 42 and 32 years, respectively.

On the basis of this comparison, I am not convinced this legislation works a hardship on justices and judges of the United States.

Mr. Chairman, the purpose of this legislation is to treat justices and judges of the United States the same as we treat Members of Congress who retire and subsequently become reemployed by the U.S. Govern

ment.

69-504 O 765

This is, of course, the "one-government" concept. That is, it should matter little whether a Federal annuitant is reemployed by the legislative, judicial, or executive branch of Government-he should not receive both his pay and annuity from the Government, at the same time.

Mr. WHITE. The subcommittee will now adjourn.

[Whereupon, at 10:55 a.m., the committee was adjourned, to reconvene Thursday, March 4, 1976, at 9 a.m.]