individual who has a vested right under an existing law in which he has paid a contribution, the Government has paid a contribution, and had every right to expect that entitlement, that we knew of no comparable situation where, in law or otherwise, there was a provision to take it away:

I do not think we had really hardened our position. I think it was that we did not think it all the way through.

Mr. WHITE. I see.

So, in other words, it boils down to certain principles. No. 1, any law that we pass should allow any judges who were advised to go ahead and withdraw their retirement moneys to redeposit this and enter into the program as if they never did withdraw the funds?

Mr. HAMPTON. That is correct, sir; that is, if they wish to do so. Some may not wish to do so, because if they had 5 years, some years back, redoposited what they may receive for that, and age and other things we are not really sure how many of those individuals are alive today, nor are we really sure if there are some widows who may be entitled to a survivor annuity. That is one thing we did not address in our testimony.

Mr. WHITE. Well, I was just going to ask you that. Now, suppose a judge has died, and he had withdrawn, and he leaves a widow. Are you going to also provide that that money can be reinvested, so that she can draw the widow's annuity?

Mr. HAMPTON. We were discussing that in the Commission. We had agreed that we would discuss that with the staff of the subcommittee, since we omitted it in our testimony. But in discussion my testimony with the other Commissioners, and thinking this through, we felt that if an individual had vested in the system, but upon the advice of the Justice Department and the Civil Service Commission-which I think was almost an automatic thing; he just took it out-and he has deceased, and the widow would be entitled to some benefit had he left that in on the proper advice, we think that they also should be covered under that provision.

Mr. WHITE. Suppose there is a judge who has retired from the active bench, who then is allowed to reinvest his moneys into the program. Does he then receive a lump sum payment as if he had been receiving his annuity all along?

Mr. HAMPTON. The way I would see it is, if he redeposits, we would have to compute when he would have been eligible for deferred annuity under the existing statutes, as interpreted by Justice and the Comptroller General, and our General Counsel. And their annuity would be based upon when actual entitlement came. And in the case of a widow, I think Tom had better explain that a little bit more thoroughly.

Mr. WHITE. The question I had was, do you then present them with a lump sum for all otherwise-accepted annuity payments that they would have received?

Mr. TINSLEY. Yes, sir, we would, Mr. Chairman.

Mr. WHITE. OK. Let's say Judge a has withdrawn his fund on advice. He has invested that fund, which has been drawing interest, or perhaps drawing an income of some sort, whether it be in property or stock or savings accounts. You are not going to concern yourself

with whether or not he had been taking advantage of the revenues that he had used up to that time?

Mr. TINSLEY. No, we would not.

Mr. HAMPTON. I think, Tom, does he not have the deposit, plus interest?

Mr. TINSLEY. Yes, but the variation in the interest rate-in fact, right now, many times, deposit and redeposit, individuals will put that money into investments, even savings accounts, because the interest rate that they would receive is higher than what the interest rate is on what they have to pay back to us.

Mr. WHITE. What interest rate do you pay?

Mr. TINSLEY. I believe right now it is 3 percent.

Mr. WHITE. Is that 3 percent compounded or is it a straight 3 percent?

Mr. TINSLEY. The interest is computed at the rate of 4 percent a year to December 31, 1947, and 3 percent a year thereafter compounded annually.

Mr. WHITE. You have said that this bill should be changed to cover only those who are going to be appointed to the Federal bench from this point on.

Mr. HAMPTON. That is correct, sir.

Mr. WHITE. And your principal basis for this is that you are concerned about the constitutionality of altering the emoluments to a sitting judge under the Constitution. Am I correct on that?

Mr. HAMPTON. Well, our concern there is that, because of an erroneous interpretation of the law, that they were denied the benefit to which they were entitled.

Mr. WHITE. Or to which the law assigned them.

Mr. HAMPTON. It was an oversight. It was a straight oversight; and that, in order to see that the law was properly carried out, we do not feel that we could retroactively deny them something to which they were legally entitled. And that is why we say that all judges appointed after enactment know full well what the law of the land is, and from that day forward would have no claim on any equity to an annuity at the time they were sitting.

Mr. WHITE. You have stated that the law, as misinterpreted, applied only to those who were in civil service, but not Congressmen. In other words, what you are saying actually is that the misinterpretation is as to civil service employees who go into the Federal bench, but not as to Congressmen. It does not treat Congressmen in the same manner as the civil service employees.

Mr. HAMPTON. That is correct, because the law was specific only on the entitlement to members, and it was an oversight that it did not include civil service employees.

Mr. WHITE. So you are saying now that a former Member of Congress who ascends to the bench is prohibited from drawing his annuity while he is on the active bench?

Mr. HAMPTON. That is correct, sir.

Mr. WHITE. We had some judges before us at the last hearing. One of them said that he has made his application for annuity while sitting on the active bench so as not to preclude himself in the event that this law should change the provision. So actually, then, he would be precluded in any event?

Mr. HAMPTON. He would be precluded from drawing an annuity while he is serving actively since his annuity was for service as a Congressman.

Mr. WHITE. So you are saying, prospectively, as to civil service employees who go to the bench, that they would be able to draw their annuity while they are on the active bench?

Mr. HAMPTON. That is correct.

Mr. WHITE. But as to former Congressmen who go on the bench, they would not, under the law, be able to get the annuity.

Would you then think we should change the law to provide that former Members of Congress be able to draw their annuities while they are on the active bench in order to make them equal to civil service employees, or should we just leave the law alone?

Mr. HAMPTON. Well, I really had not thought that through, Mr. Chairman. There is no entitlement that they had because of the specific provisions of the law, and the only reason that the others would be treated differently is because of the oversight. I am sure that there is an oversight.

Mr. WHITE. Well, the thing is, we have the option of doing nothing regarding that, or doing something regarding that. And if we do nothing, do you have any word that somewhere down the line there would be a new interpretation? And, questioning their treatment. should we in this bill treat active judges who were former Congressmen, or should we leave that subject alone, is the question I have.

Mr. HAMPTON. I would say that we ought to leave it alone, because it was in the law, and it would provide a benefit which when they took their oath of office as a judge, that they knew that they were not entitled to.

Mr. WHITE. How many judges are on the Federal bench who were former civil service employees, with vested retirement rights, and how many former Congressmen are on the bench?

Mr. HAMPTON. We say there are at least 90 individuals who are serving in this group of roughly 660. At least 90 of those individuals, from what records we have been able to check, have 5 years of prior civil service that they can possibly claim. We are not absolutely sure on that, because there is no way to get that information.

Mr. WHITE. But do you have the number of former Congressmen who are on the Federal bench?

Mr. TINSLEY. Yes. We believe between 10 and 12.

Mr. WHITE. Ten and twelve?

Mr. TINSLEY. Yes.

Mr. WHITE. Congressmen have not done too well, have they?
Mr. TINSLEY. Not lately.

Mr. WHITE. How many judes have lost their annuity benefits by taking their moneys from the retirement fund?

Mr. TINSLEY. That is in the testimony; about 70, I believe.

Mr. WHITE. Do you have any cost on this particular program under what you are suggesting in terms of refunds?

Mr. TINSLEY. It is extremely difficult in this situation, because of the way it evolved over the years, Mr. Chairman, to come up with an accurate cost at the moment, and actually being able to identify these and getting into them. We do know in these four cases we mentioned the amount of the lump sum payout is going to be in excess of $200,000

with continuing monthly payments-oh, in one case, I think it is well over $1,000 a month-and then it will range up from there. It is extremely difficult at this point in time for us to estimate.

Mr. WHITE. Well, in your estimate, you are going to have to include the lump sums.

Mr. TINSLEY. That is right.

Mr. HAMPTON. I do not believe this creates any additional unfunded liabilities, or any situation where you can amortize it, because the people who did not withdraw their funds would be considered in the course of a normal cost. I think any additional cost would have been, for those who are entitled to it if you passed the law, for us to receive from them the redeposit. I think that would be about the only possible way.

Mr. TINSLEY. Yes. The unfunded cost here would be extremely low, if any existed at all.

Mr. WHITE. We are talking about 160 cases, actually.

Mr. TINSLEY. At the most.

Mr. WHITE. Thank you very much.

I will now yield to Mr. Taylor.

Mr. TAYLOR. Thank you, Mr. Chairman.

Chairman Hampton, I want to take this opportunity to express my appreciation for your being here and for your cooperation with this committee at all times, particularly Mr. Tinsley, who has been very helpful to us during the past year in trying to hammer out legislation. We have had a lot of it.

As I understand it, if we leave this law as it is, and do nothing, a former Member of Congress who is on the bench, who retired as a Member of Congress, under the present law would not receive his annuity. Would he or would he not?

Mr. HAMPTON. He would not receive an annuity while he is actively serving on the bench, but he would receive his entitlement when he retires.

Mr. TAYLOR. Then he would receive both entitlements, from the judiciary as well as his congressional retirement, upon his retirement from the bench?

Mr. HAMPTON. Yes.

Mr. TAYLOR. We had four judges in here the other day testifying before the committee. One of them, Judge Bennett, who was a former Member of Congress with 8 years of service, is presently receiving his annuity as well as his judicial pay. However, he did not, as I understand, retire as a Member of Congress. He retired from some other position that he held. But he does receive credit for his congressional service with his annuity. Is that true?

Mr. HAMPTON. Yes, sir.

Mr. TAYLOR. Then he would not be precluded because he did not retire as a Member of Congress, even though he is receiving credit for his congressional service?

Mr. HAMPTON. That is correct.

Mr. TAYLOR. So he would be in a different situation than one who had retired as a Member of Congress, who would have been suspended while they were serving on the bench?

Mr. HAMPTON. That is right.

Mr. TAYLOR. How many of these judges—is it four of them that actually took their money back?

Mr. TINSLEY. No. There are over 70, I believe, who have taken their money back. These four judges we are speaking of did not take their money out of the fund. They filed a claim for retirement at the time they became eligible. I believe that the first one who filed was Judge Oliver Gasch, and this issue as to whether or not these sitting judges were entitled to annuities by virtue of prior Federal service in the executive branch has been one of long standing. In fact, the issue concerning the treatment of the judiciary, the justices and the judges, under the Retirement Act has been a matter of some controversy going back almost 30 years.

At one point in time, following certain amendments to the Retirement Act, the Commission's position was that these Federal judges were covered under the Retirement Act. That is what first raised an issue. The judges immediately took the position through the Judicial Conference that they were not, and directed the Administrative Office of the U.S. courts not to withhold anything from the judges' salaries. This then led to the question under the constitutional issue as to whether or not you could withhold anything from the salary of a judge.

So, this has evolved over a long period of time, Mr. Taylor. And the issues, while they have been developed and more refined over the years, have always been there so far as the Federal judiciary is concerned.

Mr. TAYLOR. As I understand it, if the committee recommends that we legislate, that they can go ahead and draw their retirement even though they are on the bench-in other words, change the law as it now stands they could go ahead and do it. But prospectively, in the future, if a Member of Congress desires to go on the bench, that he be told, "If you do go on the bench, you will not receive your annuity until you retire from the bench." Is this it?

Mr. HAMPTON. That is correct. If you, for instance, took no position on this law, we would be paying anyone with an entitlement to a civil service annuity both his retirement pay and he would receive his judicial pay while on active service. That is, if you took no action on this law, that is what we would have to do. Then you would have this disparity of treatment between those who were Members and those who were civil service annuitants.

Now, if this law is passed, it would give us the authority to withhold an annuity while a judge was on active service. But he would get that entitlement, he would get his annuity, after he retired.

Mr. TAYLOR. What about the present judges? What would their status be; the judge who says, "I have paid mine; it is vested. I have become eligible because of age to draw my congressional retirement."-and he is presently on the bench? Would he qualify?

Mr. HAMPTON. He would continue-those who are presently sitting as judges today would continue to draw whatever annuity they were entitled to, plus their judicial salary.

Mr. TINSLEY. Perhaps I might be able to help, I think, clarify the point that Mr. Taylor is making. I have two judges sitting. One happens to be a former Member of Congress, and one happens to be a former employee in the executive branch of the Government. Both of