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DESIGNATION OF BENEFICIARIES BY EMPLOYEES

SUBJECT TO THE PROVISIONS OF THE
CIVIL SERVICE RETIREMENT ACT

HEARINGS

BEFORE THE

COMMITTEE ON THE CIVIL SERVICE

HOUSE OF REPRESENTATIVES STANFORD

SEVENTY-THIRD CONGRESS

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LIBRARIES

P77-79

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DESIGNATION OF BENEFICIARIES BY EMPLOYEES SUBJECT TO THE PROVISIONS OF THE CIVIL SERVICE RETIREMENT ACT

WEDNESDAY, JUNE 13, 1934

HOUSE OF REPRESENTATIVES,
COMMITTEE OF THE CIVIL SERVICE,

Washington, D.C.

The committee met at 10 a.m., Hon. Robert Ramspeck presiding. (The committee had under consideration H.R. 9283, which is as follows:)

[H.R. 9283, 73d Cong., 2d sess.]

A BILL To provide for the designation of beneficiaries by employees subject to the provisions of the Civil Service Retirement Act of May 29, 1930, as amended, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (c) of section 12 of the Civil Service Retirement Act of May 29, 1930, as amended (U.S.C., Supp. VII, title 5, sec. 702a (c)), is amended to read as follows:

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(c) In case an annuitant shall die without having received in annuities purchased by the employees' contributions as provided in (2) of section 4 of this Act an amount equal to the total amount to his credit at time of retirement, the amount remaining to his credit and any accrued annuity shall be paid, upon the establishment of a valid claim therefor, in the following order of precedence:

"First, to the beneficiary or beneficiaries designated in writing by such annuitant and recorded on his individual account;

"Second, if there be no such beneficiary, to the duly appointed executor or administrator of the estate of such annuitant;

"Third, if there be no such beneficiary, or executor or administrator, payment may be made, after the expiration of thirty days from the date of the death of the annuitant, to such person or persons as may appear in the judgment of the Civil Service Commission to be legally entitled thereto, and such payment shall be a bar to recovery by any other person.

"In the case of an annuitant who has elected to receive an increased annuity as provided in section 4 of this Act, the amount to be paid under the provisions of this subsection shall be only the accrued annuity."

SEC. 2. Subsection (d) of such section 12 (U.Š.C., Supp. VII, title 5, sec. 702a (d)), is amended to read as follows:

"(d) In case an employee shall die without having attained eligibility for retirement or without having established a valid claim for annuity, the total amount of his deductions with interest thereon shall be paid, upon the establishment of a valid claim therefor, in the following order or preference:

"First, to the beneficiary or beneficiaries designated in writing by such employee and recorded on his individual account;

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Second, if there be no such beneficiary, to the duly appointed executor or administrator of the estate of such employee;

"Third, if there be no such beneficiary or executor or administrator, payment may be made, after the expiration of thirty days from the date of the death of the employee, to such person or persons as may appear in the judgment of the Civil Service Commission to be legally entitled thereto, and such payment shall be a bar to recovery by any other person."

SEC. 3. Subsection (3) of such section 12 (U.S.C., Supp. VII, title 5, sec. 702a (e)) is amended to read as follows:

"(e) In case a former employee entitled to the return of the amount credited to his individual account shall become legally incompetent, the total amount due

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may be paid to a duly appointed guardian or committee of such former employee. If the amount of refund due such former employee does not exceed $1,000, and if there has been no demand upon the Civil Service Commission by a duly appointed guardian or committee, payment may be made, after the expiration of thirty days from date of separation from the service, to such person or persons, in the discretion of the Commission, who may have the care and custody of such former employee, and such payment shall be a bar to recovery by any other person.' SEC. 4. Subsection (f) of such section 12 (U.S.C., Supp. VII, title 5, sec. 702a (f) is amended to read as follows:

"(f) Each employee or annuitant to whom this Act applies may, under regulations prescribed by the Civil Service Commission, designate a beneficiary or beneficiaries to whom shall be paid, upon the death of the employee or annuitant, any sum remaining to his credit (including any accrued annuity) under the provisions of this Act."

Mr. RAMSPECK. The committee will please come to order. Mr. Jeffers, the chairman of the committee, telephoned me that he was sick and unable to be here this morning and asked Dr. Sirovich to preside. Dr. Sirovich has communicated with me and asked that we proceed. If he comes in, he will take charge.

This meeting was called to consider H.R. 9283 and S. 2702 which are identical bills. As I understand, the Senate bill as passed was amended by striking out the language after the enacting clause and substituting therefor the, language of the House bill which was approved and recommended by the Civil Service Commission. Mr. Babcock has asked me to let him be heard as soon as possible, because he has to leave for another meeting. Mr. Babcock, would you come around?

STATEMENT OF E. C. BABCOCK, PRESIDENT AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

Mr. BABCOCK. Mr. Chairman and gentlemen of the committee, I do not want to take up the time of the committee except to say that the bill represents a very nice advance which should be taken. It eliminates the necessity for an adjudication of the estates in certain cases in which the amount of deposit of the employee in the retirement fund exceeds a certain amount, $1,000.

There can be no objection to the bill except possibly from one or two angles. The first angle is that of the attorney. There is no doubt about the fact that this will remove from certain attorneys certain fees, fees due to the very formal handling of the retirement fund, which are now paid out of the fund. In other words, attorneys going through a formal procedure, routine in nature, at the present time obtain a fee in connection with these matters. We take the view that this small amount of money should go to the widow or children or beneficiaries of the Government employee. This is all money of the Government employee. So far as I am aware, Government employee opposes the measure.

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The other opposing angle is the angle of the protection of certain wives and dependents. It will be noticed that the bill gives complete authority for the employee to make a designation of a beneficiary who will receive the whole estate. There is possibly the argument that that might permit, in isolated cases, certain Government employees to refrain from designating their moral dependents as beneficiaries. I think it is the feeling of the greater majority of the employees that that is a thing not very dangerous, but rather than

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