4 As a matter of general policy, the Commission believes that no individual should receive both retirement pay from a Federal civilian retirement system and salary for active Federal service during the same period of time. The dual payment of retirement annuity and salary has been declared to be inconsistent with the basic purpose of Federal civilian retirement laws by several Comptroller General decisions (10 Comp. Gen. 309, 14 Comp. Gen. 295, 16 Comp. Gen. 121, and 45 Comp. Gen. 383). The payment of annuity to annuitants who become reemployed as justices or judges appears to be clearly inconsistent with this basic policy and purpose. Consequently, the Commission supports in principle the enactment of legislation which would bar the payment of annuity to active justices and judges. In the interest of equity to present and former justices and judges, however, the Commission recommends (1) that it be given authority to accept redeposit of refunds paid to active or retired justices and judges who obtained those refunds based on the Commission's erroneous advice that payment of annuity to them was barred by the retirement law, and (2) that any legislative bar to payment of annuity to justices and judges be made applicable only to justices and judges appointed after enactment or after October 1, 1976, whichever is later. If Section 1 of H.R. 11738 were so modified to bar the payment of annuity to active justices and judges, the Commission would support its enactment. Section 1 of H.R. 11738 would also, for the first time, bar the payment of annuity to justices and judges who have resigned or retired and are in receipt of continuation of pay under 28 U.S.C. 371, 372. The simultaneous payment of two retirement benefits based on different periods of Federal service has not up to now been barred under Federal retirement legislation. Whenever an individual completes enough service (usually 5 or more years) under a particular retirement system for the payment of retirement benefits to vest upon reaching retirement age, we believe that he is entitled to payment of his vested benefit. The fact that the vested right to judicial retired pay is unusually generous among Federal retirement systems should not alter the fact that vested retirement benefits should be paid, except during active reemployment service. Consequently, the Commission opposes enactment of section 1 of H.R. 11738 insofar as it would bar the payment of annuity to justices and judges who, after completion of 10 to 15 years of judicial service, resign or retire and claim their vested right to continuation of judicial salary. The device of suspending annuity payments to annuitants and Member annuitants who become justices or judges, it should be noted, permits them to preserve their title to annuity payments in the event they leave their position as justice or judge before they reach age 65 to 70 and complete the 10 to 15 years (except for disability) of service required before they may resign or retire with the right to continuation of their salary (one-half their salary if retired for disability with less than 5 10 years judicial service) as a justice or judge for life. It also permits them to preserve their spouse's survivorship protection if for some reason they do not participate in or qualify for survivor benefits under the Judicial Survivors' Annuity System, a contributory retirement system like the Civil Service Retirement System. Further, if a judge-annuitant leaves his contributions in the Civil Service Retirement and Disability Fund, and also participates in the Judicial Survivors' Annuity System, his surviving spouse may draw both benefits so long as any service which is credited in computing the survivor's annuity under the Judicial Survivors' Annuity System is excluded from the computation of the survivor's annuity under the Civil Service Retirement System as required by 28 U.S.C. 376(0). In requesting our views on this bill, you also asked whether its weeks. We have no way of estimating precisely the cost of paying annuity benefits to annuitants who become judges. There are 497 active justices and judges and 163 retired justices or judges, who are receiving continuation of pay. At least 90 of these individuals have more than 5 years of prior civil service and a possible claim to at least a deferred annuity at age 62. The amount of annuity payable, however, varies with each individual case. To give an example, though, for any U.S. attorney earning $30,000 a year who becomes a justice or judge after completing 5 years of creditable service, annuity payments would commence at the rate of $2250 a year when he reaches age 62. A U.S. attorney earning $30,000 a year who resigns to become a justice or judge after completing 20 years of creditable service, becomes entitled to immediate annuity payments at the rate of $10,875 a year. Section 2 of H.R. 11738 would reopen for one year an opportunity given in 1971 by Public Law 91-658 for annuitants who had been unmarried at the time of retirement, but who had married prior to the law's enactment on January 8, 1971, to elect within one year after the law's enactment, a reduced annuity with a survivor annuity payable to their spouses. This new opportunity for such annuitants to elect a reduced annuity with survivor annuity payable to their spouse would be limited to annuitants who certified to the Civil Service Commission that they were unable to file a timely election under the 1971 law by reason of their failure to receive notification of their right to file such an election. 6 The Commission opposes enactment of section 2 of H.R. 11738 because it would set a precedent for paying benefits at any time an individual claimed that he did not receive a notice of a particular benefit within the time limit prescribed for electing it. While the Commission has a responsibility to notify affected individuals of benefits changes, it has no way of ascertaining whether, in fact, each and every affected individual receives such notice. The Commission did mail a notice of the opportunity to elect a reduced annuity with survivor benefit to all annuitants in 1971. The Commission also issued press releases and agency bulletins to assure wide public notice of this and other opportunities given by Public Law 91-658 to elect a reduced annuity with survivor benefit. In spite of wide publicity given the survivor benefit provisions of Public Law 91-658, a number of annuitants have advised the Commission that they did not receive any notification of the one year opportunity for annuitants unmarried at time of retirement to elect a reduced annuity with spouse survivor benefit and the Commission has no way of verifying whether they did or did not receive such notification. In the event section 2 of H.R. 11738 does become law, the Commission would have to issue regulations defining circumstances under which the Commission would accept an annuitant's certification that he had not received any notification of the 1971 opportunity for unmarried annuitants to elect reduced annuity with survivor benefit. The Commission has no way of knowing how many annuitants might make a belated election of reduced annuity with spouse survivor benefits if this provision were enacted and cannot, therefore, estimate the cost of this provision. In the event the Committee gives favorable consideration to H.R. 11738, there are certain technical changes which should be made in its text. Our staff will be available to discuss such technical changes. The Office of Management and Budget advises that from the standpoint of the Administration's program there is no objection to the submission of this report. By direction of the Commission: Sincerely yours, Kohut Hampton Chairman UNITED STATES COURT OF CUSTOMS AND PATENT APPEALS 717 MADISON PLACE, N.W. WASHINGTON, D.C. 20439 February 23, 1976 Hon. David N. Henderson, Chairman Re: H.R. 11738 Dear Mr. Chairman: I am writing to you as a former Member of the Senate who would be most seriously affected by the above bill unless it is amended. Further, I am concerned that, without amendment, such legislation would effectively preclude experienced officials of the Department of Justice and Members of Congress from accepting appointment to the federal judiciary unless they were independently wealthy. The bill, in its prescnt form, would take away contractual rights of those who accepted appointment to the federal judiciary in the good faith belief that they and their wives and families would be protected under the retirement system of which they were members. I would respectfully suggest two amendments which would not affect the bill insofar as closing of the loophole concerning justices or judges who come under the executive branch retirement system are concerned. They would preserve the status quo (for receiving annuities after retirement from regular active service as a justice or judge) for both those who come under the executive branch retirement system and former Members of Congress under 5 USC 8344(b). (1) On rage 2, line 5, insert after "compensation" - (prior to retirement from regular active service) (2) Cn age 3, line 2, strike the period and insert and to justices or judges taking office after the later of such dates. Whether the bill, as above amended, could successfully withstand challenge, I do not profess to know. I do know that some of us were advised, before we accepted appointment, that we would not receive annuities under our retirement system until after we ceased regular active service as judges. However, we were assured (as, indeed, 5 USC 8344(b) does) that our wives and families would be protected under our Congressional retirement system in the event of our death and that we would receive our annuities after we ceased regular active service as judges (i.e. retired outright or elected to take senior judge status). As you know, the protection to survivors under the federal judicial system is extremely modest compared to that under the Congressional retirement system. I doubt that there are very many federal julges ho would be affected by this legislation. To the extent that there are some, however, it would be my estimate that half of that they receive vill go back to the federal and state governments in income taxes, so we are not concerned with a great amount of money. You are to be commended for trying to close a loophole in the law which has only recently come to light. If there is any further information you desire from me, please feel free to ask. I would appreciate it if this letter would be made a part of the hearings record. |