So it is pretty obvious that there will not be a general rush for 30year optional retirement, but there will be some groups who will be looking for retirement.

I believe that there are four main groups that would cover that. One of them would be the employees who are not sick enough to qualify for disability retirement, but they are not in the best of health, and they would go out.

There are some who are not able to keep up with increased automation, mechanization, and technological changes.

There is another group who feel that they can no longer take the pressure under which they have to work.

And a relatively small group, we believe, that would seek other employment.

The reason we say a relatively small group is that most of these people would be in their fifties, when it is not easy to get a job at the age of 40, let alone that of 50. There are some who are getting other positions now on account of the increase in availability of positions, but of course that is not always true.

We also believe that the morale would be increased tremendously, because the people would have something to look forward to when they do come into the service, so that they can go at the end of 30 years, if they are able to, at that time.

Mr. Chairman, we appreciate the opportunity of appearing before you and presenting our views, and we certainly hope that something will happen in the 88th Congress to make us all happy.

Senator MCGEE. Thank you very much, Mr. Jaspan. And I have the feeling that something will happen.

The next witness is Mr. Glenn R. Simcox, president of the National Association of Retired Employees.

STATEMENT OF GLENN R. SIMCOX, PRESIDENT, NATIONAL

ASSOCIATION OF RETIRED CIVIL EMPLOYEES

Mr. SIMCOX. Mr. Chairman and members of the committee, my name is Glenn R. Simcox, and I am president of the National Association of Retired Civil Employees, an organization with over 105,000 members—and I might emphasize 105,000 paid up members-who are either retired Federal employees or the survivors or beneficiaries of former Federal employees. Our association has 865 chapters scattered throughout the United States, and has 35 State federations.

I am accompanied by Mr. George L. Nichols, vice president in charge of legislation.

We are happy to join the many other witnesses who have appeared before you by endorsing the principles of S. 176 by Hon. Olin D. Johnston, chairman of the Senate Post Office and Civil Service Committee, which would permit career employees who have completed 30 years of service to retire any time after reaching 55 years of age without penalty in annuities received.

At the same time, we want to point out an element of discrimination in the bill against career employees who have retired and will retire before it is approved. There are now thousands of former employees who retired between the age of 55 and 60, with over 30 years of service, who are suffering penalties from 5 to 15 percent in their annuities, and

who would continue to be penalized if S. 176 is enacted in its present form.

We are reminded of many other examples of discrimination in the retirement system as it operates today. Retired former employees are now suffering reductions in their annuities ranging from 10 to 25 percent in order to provide survivor annuities for their spouses, which can be provided by employees retiring currently for a reduction of only 212 percent.

For these reductions, the survivor annuity is limited to 50 percent of the original annuity for persons who retired prior to October 11, 1962, while the survivor annuity for those retired since that date can be as much as 55 percent of the original annuity.

A floor for disability annuities of 40 percent of the average salary or the amount that would be earned by service to age 60, whichever is lower, is enjoyed by persons retired after October 1, 1956, but denied to those who retired prior to that date.

A more liberal recognition of extra-long service approved 3 years ago for persons retired after July 12, 1960, has not been extended to those who retired earlier.

We hope the Congress will authorize this committee to make a thorough study of all retirement benefits available to employees retiring currently, and compare them with related benefits now received by persons retired at various periods in the past, particularly concerning annuities, survivorship provisions, and costs, disability provisions, and health benefits, with a view to developing legislation to correct disparities that are found to exist.

We believe that if the Congress establishes the true facts concerning the variations in benefits received for identical or comparable service, we can expect prompt enactment of corrective legislation.

In the meantime, we respectfully urge the Congress to abstain from creating further disparities. A very good place to start would be an amendment to S. 176 to extend its benefits currently to persons who retired in the past with at least 30 years of service after reaching the age of 55.

In justice to our members, therefore, our endorsement of S. 176 is conditioned upon the addition of an amendment to extend its benefits currently to those previously retired with 30 years of service after reaching 55 years of age.

In effect, Mr. Chairman, we are endorsing the bill.

Senator MCGEE. But you would make it retroactive?

Mr. SIMCOX. We would like to make it retroactive to include those former retirees who might come within such provisions.

Senator MCGEE. Provided they retired after age 55?

Mr. SIMCOX. Surely. That is right.

Senator MCGEE. Thank you very much, Mr. Simcox.
Mr. SIMCOX. Thank you.

Senator MCGEE. Mr. George Warfel, president of the National Association of Special Delivery Messengers.

Mr. MCCART. Mr. Chairman, my name is John A. McCart. I am the operations director of the Government Employees Council. Mr. Warfel found it necessary to leave, and asked if I would arrange to have his statement inserted in the record.

Senator MCGEE. Very good. His statement will appear in the record.

(The statement referred to follows:)

STATEMENT OF GEORGE L. WARFEL, PRESIDENT, THE NATIONAL ASSOCIATION OF SPECIAL DELIVERY MESSENGERS

Mr. Chairman and members of the committee, for the record, and purpose of identification, my name is George L. Warfel, president of the National Association of Special Delivery Messengers of the U.S. Postal Service, which association holds national exclusive recognition for representing special delivery messengers under the President's Executive Order No. 10988.

I am glad to appear before you today in support of Senator Johnston's bill, S. 176, which seeks to amend the Civil Service Retirement Act to permit employees to retire at age 55 after 30 years service, without a reduction in annuity. The National Association of Special Delivery Messengers in national conventions over the past several years, has adopted resolutions favoring such legislation.

Despite the fact that these resolutions were adopted by unanimous vote of our delegates, it has been noted that (except for disability cases) a great percentage of special delivery messengers do not retire upon reaching 60 years of age, and having 30 years of service to their credit. Therefore, it would appear that most employees would probably continue to serve until such time as retirement becomes mandatory and that, therefore, the cost of this legislation might be much less than has been estimated.

I trust that the committee will take favorable action on this bill.

Thank you for your attention.

Senator MCGEE. Now you may proceed, Mr. McCart.

STATEMENT OF JOHN A. McCART, OPERATIONS DIRECTOR, GOVERNMENT EMPLOYEES' COUNCIL OF THE AFL-CIO

Mr. MCCART. Mr. Chairman, with your permission, I would like to insert my statement in the record and to proceed to make a few extemporaneous comments.

Senator MCGEE. Very well. Your statement will appear at this point.

(The statement referred to follows:)

STATEMENT OF THE GOVERNMENT EMPLOYEES' COUNCIL, AFL-CIO

Mr. Chairman and members of the subcommittee, the 25 AFL-CIO unions affiliated with our council appreciate deeply your action in scheduling an early hearing on S. 176. These organizations represent a wide cross section of opinion among classified, postal, and wage board employees of the Federal Government.

We wish also to extend our sincere gratitude to Senator Olin D. Johnston, chairman of the full committee, and author of the measure which is the subject of the hearing.

The council has for many years supported proposals to permit Federal workers to retire upon the completion of 30 years of service, without any age requirement. This objective has a high priority also on the programs of many of our member organizations.

Under the present Civil Service Retirement Act, the normal retirement age is 60 with 30 years of service. With this combination of service and age, the individual is entitled to full benefits. However, he may retire also between 55 and 60 after 30 years service. In this case, his full annuity is reduced by onetwelfth of 1 percent for each month he is below 60 when he retires.

In view of these provisions, why should Federal Government workers be permitted to retire upon completion of 30 years of civil service work and receive full retirement benefits, regardless of age?

Certainly, we can all agree that 30 years devoted to a single employer represents a normal working career. While there are exceptions with individuals spending 40 or 50 years with a particular firm, they are just that-exceptions. When an employee spends his normal working lifetime in Federal service, it is

our considered judgment that he should be able to cease his labors with a prospect of reasonable financial security.

As the pace of production accelerates in the various Federal agencies, increasing mental and physical effort is experienced by employees. Particularly where individuals are assigned to jobs involving a large degree of physical activity, their condition is likely to deteriorate more quickly. This is true of many positions in the postal and wage board categories. Even though an individual in this class may not experience physical impairments sufficient to warrant disability retirement, he may still desire to cease work before the normal retirement age in order to preserve his health.

Under these conditions, it will benefit both the employee and the Government as the employer to permit him to retire with full benefits at an earlier age so that younger individuals may enter Government service.

As we are all aware, unemployment is a persistent, serious, and difficult problem in our country today. Even though some improvement has occurred in recent months, the rate of unemployed workers continues above 5 percent. Enactment of the proposal under consideration today will ease this national burden by making employment opportunities available to replace those Federal workers who retire.

In addition, approval of legislation of this kind will assist agencies to perform their missions more effectively by insuring a nucleus of skilled, younger workers, who can be trained to accept the responsibilities performed by their mature fellow employees.

The concept of retirement with full benefits for Federal employees with 30 years of service below age 60 is not new. During the disastrous economic depression our country experienced in the 1930's, Congress approved legislation allowing this type of retirement for Federal workers. Admittedly, the economic situation today differs substantially from the period 30 years ago. But the rationale of the earlier action applies with equal force in 1963. The object then was to provide an incentive for Federal workers with long years of service to retire so that their jobs would be available to younger men and women with families, who were in dire financial straits.

The trend generally has been toward earlier retirement. Several years ago, Congress approved full social security benefits for women at age 62, and an opportunity for men to obtain reduced benefits at the same age. This action marked a distinct departure from the 65-year age limit included in the Social Security Act since 1936.

Retirement is one of the most important aspects of the Federal personnel program. Turnover among employees is a continuing problem. An average of 170,000 Federal workers quit their jobs each year. Acceptance of the principle embodied in S. 176 would provide an incentive for individuals to continue their careers in the Federal Government. The consequent saving in turnover costs is apparent.

The number of senior citizens in our population increases each year. Boys and girls are spending more years in school. To satisfy the ever-increasing demand for jobs for those who complete their education, it is essential that job opportunities be made available at a much faster pace than heretofore. The number of working years will have to be reduced as one means of providing additional jobs. Enactment of legislation similar to S. 176 will help alleviate the problem so far as the Federal service is concerned, and will stand as an example of enlightened personnel management for others to follow.

As indicated above, an important feature of the council's legislative program is amendment of the present Civil Service Retirement Act to permit retirement on full annuity after 30 years' service, regardless of age. This is a desirable and justified improvement in the present retirement statute. Should Congress determine, however, that 30-year retirement at age 55 is a more practical step, a distinct improvement over the existing benefits will have been achieved.

We urge early, favorable consideration of this important retirement improvement by Congress.

On behalf of all of the affiliates of the Government Employes' Council, I desire to express their gratitude for the opportunity to comment on this important bill.

Mr. MCCART. The organization I represent, the Government Employes' Council, consists of 25 unions, representing Federal Government workers in the classified, postal and wage board services.

At the outset, Mr. Chairman, I would like to express the appreciation of our council to you for arranging these hearings, and to the author of S. 176, the chairman of the full committee, and to Senator Fong, for his introduction of a similar bill.

We feel strongly, Mr. Chairman, that S. 176 represents a socially desirable advance in the civil service retirement system.

As the members of this subcommittee are well aware, the unemployment rate in this country has been a persistent, nagging problem. While it has reduced slightly in the past several months, to approximately 5.7 percent of the total labor force, it is nevertheless a difficult problem.

We feel that the enactment of S. 176, or similar legislation, will make at least a small contribution to alleviating this very pressing problem. Now, on the other side, Mr. Chairman, from the standpoint of social desirability, we are all well aware that the number of senior citizens in our country is growing. We are equally aware that boys and girls and young men and women are spending more time in school today. Their educational span has been extended.

The ultimate result must be that the working careers of people must be reduced in order to accommodate the young people moving into the labor force, on the one hand, and the number of older workers and older retirees.

For these two reasons alone, Mr. Chairman, we feel that S. 176 could be enacted with much validity.

I might add at this point that our council and many of the unions affiliated with it have consistently supported legislation to provide for full retirement benefits after 30 years of service, regardless of age.

If, however, in the wisdom of the committee and the Congress, it is felt more feasible to enact legislation such as S. 176, we think that it will mark a very distinct improvement over the present system.

And finally, Mr. Chairman, I would like to emphasize the significance of this legislation to the employees involved. As you know, Federal workers can now retire with full benefits after 30 years of service at 60 years of age, and can retire at age 55, with 30 years of service, on a reduced annuity.

This annuity is reduced by 1 percent for each year the individual is below 60 at the time he retires, so that the net maximum effect of S. 176 will be to provide an additional 5-percent increase in the annuities of the people who would take advantage of it.

And from that standpoint, Mr. Chairman, we do not feel that S. 176 represents a radical departure, or a radical improvement, in the civil service retirement program. It represents a needed and a justified improvement. But certainly the cost is not going to be as has been estimated before the committee here before.

With these observations, Mr. Chairman, we urge that the subcommittee take early favorable action on S. 176.

Senator MCGEE. Thank you very much, Mr. McCart.

This concludes the live testimony of this hearing. We do have a number of statements that have been submitted for the record. They will be placed in an appropriate place in the record. Perhaps an appendix would be suitable. I will leave that to Mr. Gulledge to decide.