STATEMENT OF PAUL G. DEMBLING, GENERAL COUNSEL, GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY F. HENRY BARCLAY, ASSOCIATE GENERAL COUNSEL; JOHN S. EMERY, ASSISTANT DIRECTOR, FEDERAL PERSONNEL AND COMPENSATION DIVISION; AND BOB SHELTON, SUPERVISOR-AUDITOR, FEDERAL PERSONNEL AND COMPENSATION DIVISION

Mr. DEMBLING. Thank you very much. Mr. Chairman. I have a short statement which I'd be happy to read to the committee.

Mr. HARRIS. You may proceed. Mr. Dembling.

Mr. DEMBLING. We appreciate the opportunity to express our views on H.R. 11738. The bill would bar civil service annuity payments to a former Federal employee or Member of Congress for any period for which he is entitled to receive compensation on the basis of service as a justice or judge of the United States.

H.R. 11738 would appear to bar payments of the annuity for any period of such service as a justice or judge, either active or retired. Federal justices and judges are covered by the Federal judiciary retirement system under sections 371 to 376 of title 28 of the United States Code.

Justices or judges may either resign or retire from active service under this system. Retired justices and judges may be assigned to perform such judicial duties as they are willing and able to perform. Judges who retire continue to receive the salary of the office while judges who resign are limited to their salary at the time of resignation. Annuitants under the civil service retirement system who are reemployed by the Federal Government may not receive both their annuity and full salary during the period of reemployment. Employing agencies are required to deduct annuity payments from reemployed annuitants' salaries.

That requirement does not apply to justices and judges since article III of the Constitution provides that a judge's salary shall not be diminished during his continuance in office.

Retired members of the uniformed services who are reemployed in the Federal service are not prohibited either from receiving both retired military pay and the pay of the position in which reemployed, or from receiving both retired military pay and a civil service annuity, although retired regular officers, with certain exceptions have their retired military pay reduced during such reemployment. In contrast, most civilian employees and officials do not enjoy similar benefits.

The Comptroller General, for example, is prohibited by section 43, title 31, United States Code, from receiving both a civil service annuity and the annuity provided for a retired Comptroller General. In 1966 our office rendered a decision concerning retirement benefits in the case of a U.S. district judge for the District of Columbia.

The judge had established entitlement to a civil service annuity as a U.S. attorney prior to his appointment as a judge. The administrative office of the U.S. courts requested our decision as to whether he was entitled to receive the salary of his judicial office without reduction on account of the civil service annuity he was receiving.

The Comptroller General held that, while the judge was entitled to full salary because of the constitutional prohibition against dimin

ishing the compensation of a judge, the payment of his annuity was not authorized while he was in regular active service as a district judge. That decision was based on the long-standing rule of our office that although there may be no specific statutory prohibition in a particular case against the payment of retirement annuity to a person employed by and receiving salary from the Federal Government, dual payment of retirement annuity and salary is inconsistent with the basic policy regarding such dual payment expressed in civilian retirement legislation and is without authority of law.

In 1973 a judge of the court of claims appealed to the Civil Service Commission's Board of Appeals and Review to review the decision of the Commission's Bureau of Retirement, Insurance, and Occupational Health that he could not receive a civil service annuity during his tenure as a judge of the court of claims. In his appeal, the judge stated his disagreement with the prior decision, as not being grounded in law.

After the Board of Appeals and Review sustained the Bureau's decision on the basis of the prior decision, this office decided to review its position on the issue.

As you stated in your opening remarks, I wrote to the General Counsel of the Civil Service Commission on August 29, 1974, expressing the view that we should not have considered Judge Gasch's eligibility for a civil service annuity and that we believed the 1966 decision was incorrect. We reached that conclusion on two grounds:

First, by law, the matter of civil service retirement is vested in the CSC rather than the GAO, and we felt that the Civil Service Commission should rule in those matters of retirement.

Second, there is a basis for the view that the salary received by a judge after retirement or resignation is no different than his salary while on active duty.

Neither the CSC nor the GAO has precluded the payment of the civil service annuity after the judge retires or resigns. Our 1974 determination did not necessarily represent a change in our general view of this issue but was an acknowledgment that there is not adequate authority for it.

We continue to adhere to our original position that during active service, both full salary and retirement benefits should not be paid, particularly in view of the fact that most other categories of retired civil employees suffer either a reduction in pay or the discontinuance of their annuities upon reemployment in the Federal service.

Accordingly, we favor the enactment of H.R. 11738, so far as it covers withholding of the annuity for the period of active service as a judge.

In your letter to us, you asked us to consider the cases of judges of the U.S. district court for the District of the Canal Zone, Guam, or the Virgin Islands or any other judge of the United States for whom retirement benefits are provided apart from the civil service retirement system. We understand the CSC will furnish you specific views in that regard, so we'll defer to them in this matter.

We believe the matter here in question involves a much larger issue than the retirement treatment of justices and judges. It demonstrates the situations that can occur because of the lack of an overall Federal retirement policy.

In a report issued on July 30, 1974, entitled "Federal Retirement Systems: Key Issues, Financial Data, and Benefit Provisions," we reported the following:

There is no overall Federal retirement policy to provide objectives and principles to guide the development and improvement of Government retirement systems.

Lacking such a coherent, coordinated policy, the benefit structures of Federal retirement systems have evolved and developed in a piecemeal fashion.

One consequence of this type of development has been the creation of duplicate and inconsistent benefits.

The report observed that if Government retirement systems are to develop collectively on some consistent and financially sound basis, it is essential that the Congress assume a major role in establishing and controlling an overall retirement policy.

The report also pointed out the need for establishment of a centralized mechanism for monitoring the development, interrelationship, and cost of government retirement systems.

Establishment of an overall Government retirement policy and a mechanism for monitoring the various retirement systems within the policy framework would enable the Congress to be in a much better position to evaluate the merits of proposed legislation such as H.R. 11738.

This concludes our formal statement. If the committee has any questions, we shall be glad to try to answer them.

Mr. HARRIS. Thank you very much.

I wonder if I might ask you, the letter which you wrote to Mr. Mondello, counsel of the Civil Service Commission in 1974, advising them that the 1966 GAO decision was in error; could you submit that letter for the record?

a copy of

Mr. DEMBLING. Yes, sir. I have a copy here which I will submit. Mr. HARRIS. Without objection, we will place it in the record at this point.

[The letter follows:]

UNITED STATES GENERAL ACCOUNTING OFFICE,

OFFICE OF GENERAL COUNSEL, Washington, D.C., August 29, 1974.

ANTHONY L. MONDELLO, Esq. General Counsel, U.S. Civil Service Commission, Washington, D.C. DEAR TONY: As you are fully aware 5 U.S.C. 8347 provides that the Civil Service Commission hall administer the civil service retirement provisions, and GAO has consistently held that determinations concerning eligibility for civil service retirement annuities are within the jurisdiction of the Civil Service Commission and are not reviewable by this Office.

I reterated this to you when I forwarded the material regarding the civil service retirement annuity of Judge Marion T. Bennett of the Court of Claims. I point this out because the CSC has been utilizing a previous ruling of GAO, namely B-157469, January 5, 1966 (45 Comp. Gen. 383) regarding Judge Oliver Gasch. We believe that we should not have considered Judge Gasch's eligibility for a civil service annuity. Furthermore, we believe that the decision was incorrect.

Sincerely yours,

PAUL G. DEMBLING,
General Counsel.

Hon. WARREN OLNEY III,

COMPTROLLER GENERAL OF THE UNITED STATES,
Washington, D.C., January 5, 1966.

Directors, Administration Office of the United States Courts.

DEAR MR. OLNEY: On August 12, 1965, the Acting Director of the Administrative Office of the United States Courts requested our decision whether the Honor

able Oliver Gasch, United States district judge for the District of Columbia, is entitled to receive the salary of the office without reduction on account of the annuity he is receiving.

Judge Gasch is an annuitant under the Civil Service Retirement Act, having qualified for an annuity upon being involuntarily separated from the position of United States attorney for the District of Columbia due to a change in administration. He was nominated July 12, 1965, by the President of the United States to be a United States district judge for the District of Columbia, and was confirmed by the Senate on August 11, 1965.

Section 135 of title 28, United States Code, fixes the salary of a United States district judge at $30,000 a year. Section 1, Article III of the Constitution of the United States provides:

"The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.” The constitutional prohibition against diminution of salary clearly precludes deducting amounts equal to the annuity from Judge Gasch's salary as a district judge.

However, we have long held that, although there may be no specific statutory prohibition in a particular case against the payment of retirement annuity to a person reemployed by, and receiving salary from, the Federal Government, dual payment of retirement annuity and salary is inconsistent with the basic policies regarding such dual payment expressed in civilian retirement legislation and is without authority of law. See in that regard the decision reported in 16 Comp. Gen. 121, in which we held that, although there was no statutory prohibition against the reemployment in the executive civil service of a retired Foreign Service Officer there was no authority for the concurrent payment of his retirement annuity during the period of such employment.

The claimant involved in that case obtained judgment in his favor in the Court of Claims. See Brunswick v. United States, 90 Ct. Cl. 285 (1940). In the decision reported in 32 Comp. Gen. 89 we declined to follow the Brunswick decision and affirmed the holding in 16 Comp. Gen. 121. (Note: The amount of salary and annuity any retired Foreign Service Officer or employee may receive if reemployed in Federal service is now specified in section 872 of the Foreign Service Act of 1946, as added by section 44 of the Foreign Service Act Amendments of 1960, 74 Stat. 846.)

Therefore, we are of the opinion that while payment of the annuity to Judge Gasch is not authorized while in regular active service as a district judge he is entitled to full payment of salary as a district judge.

A copy of this decision is today being furnished to the Chairman of the United States Civil Service Commission.

Sincerely yours,

FRANK H. WEITZEL,

Acting Comptroller General of the United States.

Mr. HARRIS. This is really quite a change in policy after a number of years. Is this revision of policy spontaneous on your part? Was there considerable pressure put on judges to have this resolved?

Mr. DEMBLING. No. I don't think that there was a change in policy. I think that what we did do was reexamine the legal base for our earlier decision. We indicated that there was no legal base for the decision in the earlier, 1966 decision.

In 1974 we indicated that there didn't appear to be authority either way; there was not adequate authority to withhold or suspend the retirement or annuity; and there was no authority to go forward with it.

That's all we intended to imply in the 1974 letter that was written to the general counsel of the U.S. Civil Service Commission.

However, the policy had not changed, and as I indicated here in my formal statement, the policy is the one that we still adhere to— that there should not be both retirement pay and full salary when a judge or justice is on active duty.

Mr. HARRIS. Well, actually, then you're saying there shouldn't be, but you need more law in order to stop it.

Mr. DEMBLING. That's correct.

Mr. HARRIS. Now, I thought you had enough law in 1966.

Mr. DEMBLING. I think our decision was more in a way of a policy statement, recognizing

Mr. HARRIS. More than a policy statement; you were withholding compensation, right?

Mr. DEMBLING. That's right.

Mr. HARRIS. Didn't you hold in 1966 that you had sufficient law to do it?

Mr. DEMBLING. Well, it certainly implied that, yes, sir.

Mr. HARRIS. Actually, the point is that we have said before, or at least argued before, dual payment is without authority of law. You still feel it is without authority of law? I think that's probably what you said. I think what you merely did in 1974 was balance it out indicating there was not adequate authority either way.

Now, your first argument that you state on page 4 is first by law, the mater of civil service retirement is vested in the CSC rather than the GAO. Is that the basis for the decision or is the basis of the decision insufficient authority of law?

Mr. DEMBLING. I think both; that we shouldn't be ruling in the area where we don't have authority to rule. We shouldn't be dealing with those cases, and, therefore, we went to the second point, that upon looking at it again, we recognized that there was not adequate authority in law.

The Civil Service Commission has authority for decisions in the retirement area, and we have always deferred to the Civil Service Commission on rulings involving retirement matters. This was a case which was an exception to that policy, and was consistent with the practice that we followed in the General Accounting Office.

Mr. HARRIS. The point we're dealing with here with regard to judges, for example, is a rather limited area of application. Do you feel that there's other areas that need similar review.

Mr. DEMBLING. Yes.

I referred to our report. We reviewed the Federal retirement systems together with a consideration of key issues, problems that surround retirement systems that are in effect. Ten retirement systems were examined in that report, all affecting Federal employees of one type or another. There are lots of inconsistencies, some major and some are minor.

It was our recommendation that there ought to be a consistent policy promulgated, enunciated, and probably Congress is the place we should go to do it.

Mr. HARRIS. Mr. Taylor?

Mr. TAYLOR. Thank you, Mr. Chairman.

Mr. Dembling, I am particularly interested in this matter of careers of Federal judges. As I understand it, your letter that the Civil Service accepted sometime ago actually didn't say they should or they shouldn't. Is that true?

Mr. DEMBLING. That's correct.

Mr. TAYLOR. You didn't say they could or they couldn't?