Civil Service Retirement Act Amendments_ 1955 _Notes and Brief

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Civil Service Retirement Act Amendments_ 1955 _Notes and Brief Powered By Docstoc
					Average membership        was 487 in                  the increase (subject to a maximum                         when the survivor annuity also com-
credit unions operating under State                   provision) is 12 percent of the flrst                      mences before 1958. Consider, for
charters and 498 for those operating                  $1,500 of the annual annuity and 8                         example, the case of a retired em-
under the Federal act. Loans Out-                     percent of the balance. The follow-                        ployee whose annuity commencedin
standing totaled $1.6 billion, while                  ing tabulation shows the graded in-                        June 1955, at which time he was
paid-in share capital amounted to $2                  surance applicable for those with an                       aged 62 and his wife was aged 60
billion. The average member in a                      annuity commencing at different                            or over. If his full annuity was
State-chartered   credit   union had                  dates in the past and in the near                          $1,500 a year, by taking an annuity
$279 in shares at the end of 1954,                    future:                                                    reduced by 5 percent (to $1,425) he
while average shareholdings among                                                                                could provide a survivor annuity of
members of Federal credit unions                                                       --                        $750 for his wife. Under the provi-
amounted to $259.                                                                                                sions of the new legislation, the em-
                                                                                         mwntage tncrensr ployee annuity is increased by 12
   State-chartered credit unions held                                                    opplicablP to previ-
                                                                                              ous annuity        percent, or to $1,596. The amount of
55 percent of all assets held by credit                  Comnwncirlg datr of annuity                  ,
unions in 1954. Their average assets                                                                    Ewess
                                                                                                                 the widow’s annuity will depend
                                                                                            First                upon the date of death of the hus-
amounted to $160,351, compared                                                             $1,500        over
                                                                                                        $1,500
with an average of $142,961for Fed-                                                                              band. Thus, if it commenced in
                                                                                         -I-                     December 1955, it would be $825 a
eral credit unions.                                    Before July 1955...     .-_                :;           8
   Based on total shareholdings,there                 July-December    1955-e. -..                             7 year (110 percent of $750); if it were
                                                       .January-June 1956. -. .-                    8          6
was no appreciable difference be-                     July-December    1956__.. -.-.__              6          4 to commence in December 1957, it
                                                      .January-June 19%. .-- . ..__ -_              4            would be $765 (102 percent of $750).
tween State-chartered and Federal                     July-December    1957. .._.._._               ?          :
credit unions in the overall dividend                                                                            and if it were to commence after
rate-3 percent in 1954.                                                                                           1957,no increase over the previously
                                                          The increases apply not only to scheduled amount of $750 would be
                                                      the regular annuity based on the provided.
Civil Service Retirement                              compulsory contributions but also to                           Approximately 300,000 annuitants
Act Amendments,      1955”                            any additional annuity purchased by benefited immediately from the en-
   Only one law significantly amend-                  voluntary deposits of the employee actment of this legislation. The in-
ing the Civil Service Retirement Act                    (even though the latter are, of creased cost in the flrst full year of
was enacted in 1955 by the Eighty-                    course, not affected by the pay in. operation was estimated at about $45
fourth Congress, flrst session. On                    creases).                                                  million, while the total increase in
August 11, the President signed Pub-                      A maximum provision limits the cost over all future years, allowing
lic Law No. 369, which increased the                  amount of the increases. The sum for discounting at 3percent com-
                                                      of the previous regular annuity and pound interest, is about $450 million.
annuities of those then on the rolls
 and those who will enter before 1958.                the increase in both the regular an- No provision was made in the legis-
The increases were effective for Oc.                  nuity and the voluntary annuity (if
tober 1955. Another feature of the                    any) may not exceed $4,104 annu-
legislation is the liberalization of the              ally ($342 monthly). Table 1 shows Table l.-Zllustrative                                         annual        in-
retirement system for Members of                      how this maximum provision works                               creases in civil service retirement
                                                      out for various illustrative caseswith                         annuities           granted    under      Public
Congress.                                                                                                            Law No. 369 to annuitants               who re-
                                                      regular and voluntary annuities of                             tired before July 1955
   Perhaps the primary reason for in-                                                                                                             -
creasing the annuities of persons                     varying sizes. From one point of
now on the rolls was the enactment                    view, the bill discriminates in favor                          Amount of annuity before       Amount of increase 1
                                                                                                                                 increase
of recent salary increases for classi-                of those with voluntary annuities.
fied and postal employees (amount-                    If two individuals retired at the same
                                                                                                                                                    Bawd on Rased on
ing to about V/2--8 percent), in rec-                 time with the same total annuity,                                                                         maxi-
                                                                                                                                                    formula 2 mum 3
ognition of recent cost-of-living                     and the first had a voluntary an-
changes. With such increases, for                     nuity while the second did not (or
a given grade classification the an.                  had a smaller voluntary annuity),
nuity payable for those retiring sev.                 the former in some casesreceives a
era1 years hence would, if no change                  greater increase.
were made in the retirement pro-                          The increases also affect the
visions, be signiilcantly larger than                 amounts paid to survivor annuitants                                                                                Ii
for those already retired and those                   whose annuities begin before 1958,                                                                              104
                                                                                                                                                                      604
retiring currently. Accordingly, some                 with the amount of the increase                                                                              1,104
adjustment seemed appropriate.                        based on the starting date of the
   Under Public Law No. 369, for an-                  survivor annuity. The increases do                            * Actual inerwsc is smaller of fiewes shown in 2
 nuitants on the rolls before July 1955               not apply, however, to all survivor mlumns below. first $1.560 of total annuity before in-
                                                                                                                    a 12 percent of
                                                      benefits based on the earnings of crease, plus 8 percent of remainder. (before increase).
                                                                                                                    3 $4,104 minus regular annuity
   *Prepared   in   the   Division   of the   Actu-   present retired employees (or those                           4 Distribution between regular annuity and oohm-
                                                                                                                 tarp annuity dors not affect the amount of increase.
ary.                                                  retiring before 1958) but rather only                         5 Not   spplimblr to this case.
20                                                                                                                                                 Social Security
lation for financing this increased                          ceive a separate annuity based on              (1) 2% percent of average pay
cost, which thus must be met over                            that service; otherwise he could re-        as a Member of Congress since Au-
the future by increased Government                           ceive only a refund of contributions        gust 1946, multiplied by years of ser-
contributions.                                               for the other service. Public Law No.       vice in Congress and creditable mili-
   The remainder of the legislation                          369 provides that all or any part of        tary service.
affected the retirement       system for                     other service may be included with             (2) 2% percent of average pay as
Members of Congress, established in                          the congressional service. Such other       a Member of Congress since August
the Civil Service Retirement         Act.                    service is creditable only if per-          1946, multiplied by creditable years
Many provisions applicable to gen-                           formed before his separation from           of service as an employee of Congress
eral Government employees are also                           service as a Member of Congress and          (not in excess of 15 years).
applicable to Members of Congress,                           only if he is separated from that              (3) 1% percent of average pay as
but certain provisions-including      the                    service after July 1, 1955. The an-         a Member of Congress since August
method of computing annuities--are                           nuity is based on his average pay as        1946, multiplied by years of all other
different.                                                   a Member of Congress since August           creditable service.
   Previously a Member of Congress                           1946, and on the percentages used in           The law will greatly increase the
who had other credited Government                            computing annuities based only on           annuities of Members of Congress
service could not include it with his                        each type of service under the pro-         who retire in the future with sub-
congressional  service in computing                          visions covering such service alone.        stantial amounts of relatively low-
his annuity. If he had at least 5                            The annuity will be computed as the         paid service in some other branch of
Years of other service, he could re-                         sum of the following:                       the Government.


                                                                                                           Washington, Vol. 2, Sept.-Oct. 1955,
Recent Pzdlzcations*                                                                                       pp. 1’79-184.
                                                                                                           A report on an investigation into
                                                                                                         the “black market” in babies.
Social       Security         Administration                   Actuary, Social Security Adminis.
                                                               tration, Washington 25, D. C.                                  General
BUREAU       OF PUBLIC                State
                             ASSISTANCE.
   Methods     for Establishing      Work-                   INTERNATIONAL      SERVICE.   OFFICE   OF   BUCHANAN,          NORMAN     S.,    and        ELLIS,
   load    and     Staffing     Standards.                      COMMISSIONER.  Observation     as a         HOWARD          S.   Approaches         to     Eco-
   Washington: The Bureau, June                                Way of Learning  for International          nomic          Development.        NewYork:
   1955. 17 pp. Processed. Limited                             Social Workers. Washington: The             Twentieth Century               Fund, 1955.
   free distribution; apply to the                             Service, June 1955. 19 pp. Proc-            494  pp. $5.
   Bureau of Public Assistance, Social                         essed. Limited free distribution:           An analysis of economic problems
   Security Administration, Washing.                           apply to International    Service,        of underdeveloped areas.
   ton 25, D. C.                                               Social Security Administration,           CUBER,  JOHN F., and KENKEL,  WIL.
CHILDREN’S   BUREAU.     L ea d e Ts h i p                     Washington 25, D. C.                        LIAM      F.     Social   Stratification           in
   Through    Consultation:       How      a                 INTERNATIONAL      SERVICE. OFFICE OF         the          States. New York:
                                                                                                                   United
   State Welfare     Department     Builds                      COMMISSIONER.     Social Workers           Appleton - Century - Crofts, Inc.,
   Strengths   in Agencies      Providing                      Abroad   Assess Their    Training  in       1954. 359 pp. $4.
   Group Care for Children.         Wash-                      the United States.    (International      “Family Allowance Scheme in the
  ington: The Bureau, 1955. 44 pp.                              Technical Cooperation Series, No.          Federal Republic of Germanv.”
  Processed.                                                    4.) Washington : The Service,              Industry and Labour, Geneva] Vol.
  Report of a regional conference                               1955. 2’7 pp. Processed. Limited           13, June 1, 1955, PP. 519-521. 25
held in Nashville, Tenn., in Novem.                             free distribution; apply to Interna-       cents.
ber 1954. Limited free distribution;                            tional Service, Social Security Ad-      GARCIA    CRUZ,
                                                                                                                      MIGUEL.   La Seguridad
apply to the Children’s Bureau, So-                             ministration, Washington 25, D. C.         Social :Bases, Evolution,   Zmpor-
cial Security Administration, Wash-                          LOURIE,    REGINALD   S. “Delinquency         tancia Economica,  Social y Poli-
ington 25, D. C.                                                Prevention-A      Health Worker’s          tica.  Mexico City:       Instituto
GREVILLE, T. N. E. Present Values of                            Job, Too.” Children,    Washington,     Mexican0 de1 Seguro Social, 1955.
   OASZ Benefits in Current Payment                             Vol. 2, Sept.-Oct. 1955, pp. 168-172.   231 pp.
   Status, 1940-54. (Actuarial Study                            25 cents.                               The nature of social security and
   No. 42.) Washington: Division                             MACDOUGALL,   J. A.   Analysis of Bene- information on the various national
   of the Actuary, July 1955. 18 pp.                           fits, OASZ Program,      1954 Amend-  systems, with a special chapter on
   Processed. Limited free distribu-                           ments.    (Actuarial Study No. 41.1 Mexico’s program.
   tion: apply to the Division of the                          Washington: Social Security Ad- GUATEMALA.           INSTITUTE    GUATEMAL-
                                                               ministration, Division of the Actu-     TECO   DE SEGURIDAD     SOCIAL.    Zn-
    *Prepared        in the Library.      Department           ary, May 1955. 48 PP. Processed.
of i%?alth, Education,           and Welfare.    Orders                                                forme Anual de la Gerencia, Ejer-
                                                               Limited free distribution; apply to     cicio  Julio    1954 - Junio 1955.
for items        listed   should     be directed        to
publishers       and booksellers:      Federal       pub-      Division of the Actuary, Social Se-     Guatemala City: The Institute.
lications     for which prices are listed should               curity Administration, Washington        1955. 64 pp. Processed.
 be ordered         from   the Superintendent           of     25, D. C.                               The 1955 report on Guatemala’s
Documents,         ‘U. S. Oovernment           Printing      THORNHILL,    MARGARET      A. “Unpro- program, which provides cash and
Oflice, Washington           25. D. C.                         tected Adoptions.”       Children,    medical benefits for work-connected
Bulletin,     November         1955                                                                                                                           21

				
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