Senator MCGEE. I think that would be very helpful. Mr. MACY. I would be very happy to, Mr. Chairman. (The table referred to follows:)

Chronology-Early voluntary retirement provisions—Civil Service Retirement

Act

Senator MCGEE. You mentioned, Mr. Macy, the suggestion that the more efficient employees would be the more aggressive, in making available to themselves this opportunity to retire at 55 while the less efficient ones would tend to hang on and run out their full time. think maybe a little more embellishment with your personal comment might be helpful.

I

Mr. MACY. The basis for that view was that those employees who had achieved some success in their Federal career and had been recognized for their efficiency and ability with greater responsibility, higher level jobs, would be those who would take advantage of the 30year option with full annuity and move on into the private sector or some other form of employment where they could receive equal or even better compensation, whereas those who had not been able to gain this degree of, call it economic confidence, would be more inclined to remain with the job they already had.

Senator MCGEE. I hesitate to pose this next question because it is becoming dangerously close to involving me before many years, but is there a number of Federal employees engaged in fairly vigorous work who, because of the encroachments of age and the physical impairments they have accumulated over the years, cannot perform quite as well their task, at age 55 as they did at a measurably younger age. Mr. MACY. There are those, Senator, who testify that Federal experience is an experience in rapid aging. This varies with certain occupations. The civil service retirement system does provide a disability retirement provision for those who are unable to perform the work of the job on which they are currently assigned. This per

mits them to retire generally with at least a 40 percent annuity. There may be an instance where individuals are not totally disabled but where they, due to increased illness or some other condition of fatigue, decide they wish to retire early. I believe that Mr. Ruddock testified when we were here 2 years ago to the effect that in his judgment perhaps the largest number of those who retired under the present voluntary program were those that found themselves in less perfect health, so that this is a factor. I will concede that.

Senator MCGEE. I would think it would tend to be an offsetting factor; that is, those with some health problems of one sort or another might tend to seize this opportunity to separate at a respectable level and thus permit you to keep up the service, as it were, with new and younger blood.

Mr. MACY. This might be the case. Of course, it is exceedingly difficult to speculate on reasons that are as subjective as those that led one to a judgment of this kind. I certainly would not argue that the proposition that you present is not a factor in judgment leading to early retirement.

Senator MCGEE. Does the Civil Service Commission have any records that might be available to the committee that would indicate why retirees elect to retire?

Mr. MACY. No; we do not require reasons. We have in our annual report very detailed tables showing the numbers every year who retire under the various options that are available under the Civil Service Retirement Act, but we do not have a breakdown indicating the type of reasons that we have been discussing in this colloquy.

Senator MCGEE. You mentioned that we have to make some real subjective judgments on this and I didn't know whether we might have available some kind of a study of the motivations that lay behind those who have already chosen to retire.

Mr. MACY. May I call on Mr. Ruddock for further elaboration? Senator MCGEE. Surely.

Mr. RUDDOCK. We do not ask in the application or elsewhere just what has motivated the optional retirement but, as you can well imagine, I talk to very many of these people personally. It is very seldom that we find any one reason given as to why the person exercised his option to retire at an earlier date. Usually it is a combination of reasons and I doubt that most of these employees would be able to actually put their own finger on the one reason they considered most compelling.

Mr. MACY. We would probably have to have a good deal of psychological consultation in order to really have any data that would be helpful on this.

Senator MCGEE. I only raise the question as a backsliding academic that we are interested in trying to understand motivation in these kinds of situations. I would think that somewhere somebody would find it very useful to try to get at this question in as near to an objective approach as it was possible to do so and I don't know whether that really properly ought to fall on your shoulders or not, but I know it would be very helpful to us if somebody could come up with a study of the matter so that we could make our own judgments and assessments in trying to arrive at estimates of the magnitude of this question and its impact, again I think it is partly a matter of the blind

leading the blind when we have our feeling on this without really knowing, and I would think we might improve our chances to grapple with it realistically if we had such a study. I don't know wether this is out of order or not.

It might be in order for this to be done possibly in connection with one of our economic institutions or groups that are properly interested, Mr. MACY. There is an increasing interest in knowing about reasons for retirement and other judgments that are made by our more mature citizens. There is an increased concern with not only the employment of the older worker, but his entire pattern of activity and livelihood during the senior years. It might very well be that what you suggest would be a part of some of the study that is being made in this field.

Senator MCGEE. Senator Johnston, do you have questions on this? Senator JOHNSTON. I believe the table accompanying your report shows how many retired each year under the different systems beginning with 1943.

Mr. Macy, would you mind supplying for the committee another table in regard to the retired at 59, if they were to retire at 58, 57, 56, 55, and how many you would estimate would retire each year if any of these were put into effect? 1

I think the committee would like to have that and what the cost would be for the various years. It is very important that we have these things so that we know just what our goal or compromise is. I know I for one want to do something in this field and I am hoping that we can get the administration, also, to see the light.

Mr. MACY. We are always seeking the light, sir.

Senator JOHNSTON. We all have to. I realize that.

Mr. MACY. We will endeavor to comply with that. The only qualification I would offer is that of course we could have to make a statistical assumption as to what the effect would be in increasing the number that would retire at a given age as a result of removing the reduction.

Senator MCGEE. You have already made a tentative estimate on this 75 percent increase?

Mr. MACY. We will follow the same statistical route that we did in estimating that.

Senator JOHNSTON. What do you give as a reason, though, for the reductions as shown in your table. I notice in 1957 after the other law went into effect you had 4,275 the first year, in 1958 it was 4,154. Then in 1959 it dropped to 2,826. In 1960, it dropped to 2,583. Then in 1961 it is back up to 3,136 and back again in 1962 to 2,980.

Is there any reason that you could give for the reduction after the first 2 years it was in effect.

Mr. MACY. Our experience, Senator, has been that immediately following a liberalization there is a peaking of cases such as this and then it tends to fall off to a lower figure. This was particularly the case after the 1958 liberalization. As I indicated earlier, actually only 8 percent of those who are eligible for this early retirement are currently taking it, so it is a relatively small number of the total group. Senator JOHNSTON. As the old saying goes, "a new broom sweeps clean."

1 See communication dated May 29, 1963, at the end of Mr. Macy's testimony.

Mr. MACY. I was afraid somebody was going to say that the increase in 1961 was because of the change in administration, but I hasten to eliminate that interpretation. I have no explanation of the degree of fluctuation that has occurred in the last few years.

Senator JOHNSTON. I imagine business conditions of the time have a lot to do with it also.

Mr. MACY. Economic conditions of the time. Perhaps we ought to chart this against the business cycle.

Senator JOHNSTON. Some see greener fields on the outside, so they get out and draw their retirement.

Senator MCGEE. Your 75 percent estimate would reflect the peaking after a new liberalization if the light shines through here, or would that be what you would regard as the leveling off figure once the first year's impact was spent.

Mr. MACY. I think this would be the leveling off figure, that actually the first year our experience shows that it is around 100 percent increase.

Senator MCGEE. That is why I wondered whether your 75 percent represented a peaking impact immediately following or

Mr. MACY. No, this would tend to be your average in successive years with perhaps a higher figure up to 100 percent the third year immediately following the liberalization.

Senator JOHNSTON. I believe that is on the retirement at 60 without any limitation whatsoever. You did not have your 55 years then. I believe your statement says that.

Mr. MACY. Yes, that is right.

Senator JOHNSTON. And it was only 25 percent retirement at 60.

Mr. MACY. That is correct. Our estimate was that it would be only a 25 percent increase, if, as Senator Johnston indicates, the 55 floor was put under the 30-year optional retirement.

Senator MCGEE. Senator Brewster.

Senator BREWSTER. Mr. Chairman, by your table that we have been discussing in 1949 you have 1,240 retirees under this program and in 1962 you have 2,980. By what percentage had the total number of civilian employees in the Government increased, total numbers from 1949 to 1962?

In other words, what I am getting at is, since these are numbers of retirees, aren't they distorted by the fact that the total number of Government employees had substantially increased and would not percentage figures be helpful to us?

Mr. MACY. Yes, it has substantially increased, Senator Brewster. Also, you would have the factor that the age distribution of Federal employment would have changed because there was a substantial employment in the late thirties and these employees in many instances. have remained and now constitute a larger block of older employees in the total work force. I don't have with me the total employment for 1948. My recollection is that it was about 2 million and that it has gone up about 500,000 since that time.

Mr. RUDDOCK. May I point out that the retirements that occur in any given year under this table reflect people that have 30 years of service, so that your universe is actually the Federal population 30 years prior to the date of retirement? In other words, for 1962 retirements these must be the survivors of people who entered Federal

service in or before 1932 and would bear little relationship to what is the actual total Federal service in 1962.

Senator BREWSTER. So that we can anticipate on this scale that followup of the Senator's interrogation, a substantial increase in the numbers in this table 10 years, 15 years, from now, that is because of the getting back to the Board.

Mr. MACY. That is correct. In fact, we are looking forward to a rising curve of retirements because of the arrival at retirement age of those who came in during the peak employment periods.

Senator JOHNSTON. Your increases will begin prior to World War II?

Mr. MACY. Yes, sir.

Senator JOHNSTON. Federal employees. The jump there is for right around 2 million and since then it gradually increased up to where it is today, I believe about 2.4 million.

Mr. MACY. About 2,471,000. At the peak of World War II it was up around 3 million.

Senator MCGEE. But the group that went in around 1942 went in generally at an overage?

Mr. MACY. Yes, they were in their late twenties or some of them in their thirties because many of the people who served as civilians during the war were beyond the draft and military service age.

Senator MCGEE. So that peaking period will come substantially earlier?

Mr. MACY. I believe Mr. Ruddock has some estimates as to what the dates of the peaking will be.

Mr. RUDDOCK. We anticipate that the maximum number of people on the retired roll will not occur until shortly after the turn of the century. In other words, disbursement will continue to increase. On this particular table on page 2 I think there is absolutely no significance to an increase in the number from year to year. The only significance is that you have a peaking, a sudden increase, after a liberalization has occurred. This table would show an increasing number year by year without any liberalization.

Senator MCGEE. I think also regardless of the age they enter the civil service it is still going to have an effect on this. Thirty years, even though we are still traveling faster, it takes 12 months to get through the year.

Mr. MACY. That is right, sir.

Senator MCGEE. That would not necessarily be a factor on this particular legislation.

Mr. MACY. Yes.

Senator JOHNSTON. You will find that during the war that people were older who went into civil service. That would make them nearer 60 when they reach their 30 years of service.

Mr. MACY. That is right.

Senator JOHNSTON. Another thing we are going to find is that after the war a great many people that were in service have gone into civil service. What percentage do you have now of ex-servicemen?

Mr. MACY. Veterans are more than 50 percent of the total. Senator JOHNSTON. They have been in the service and it was after their service they went into civil service, but remember this, that their service in military counts in your retirement.

99-880-63- -3