Civil Service Retirement Act Amendments, 1955
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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 commenced in 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- sions of the new legislation, the em- amounted to $259. mwntage tncrensr State-chartered credit unions held opplicablP to previ- ployee annuity is increased by 12 ous annuity 55 percent of all assets held by credit percent, or to $1,596. The amount of Comnwncirlg datr of annuity , unions in 1954. Their average assets the widow’s annuity will depend First Ewess amounted to $160,351, compared $1,500 over upon the date of death of the hus- $1,500 band. Thus, if it commenced in with an average of $142,961for Fed- -I- eral credit unions. Before July 1955... .-_ :; 8 December 1955, it would be $825 a July-December 1955-e. -.. 7 year (110 percent of $750) ; if it were Based on total shareholdings, there .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 tween State-chartered and Federal July-December 1957 . .._.._._ ? : would be $765 (102 percent of $750). 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 annuities of those then on the rolls pound interest, is about $450 million. 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- how this maximum provision works creases in civil service retirement retirement system for Members of annuities granted under Public Congress. out for various illustrative caseswith regular and voluntary annuities of Law No. 369 to annuitants who re- Perhaps the primary reason for in- tired before July 1955- creasing the annuities of persons varying sizes. From one point of view, the bill discriminates in favor Amount of annuity before now on the rolls was the enactment increase Amount of increase 1 of recent salary increases for classi- of those with voluntary annuities. fied and postal employees (amount- If two individuals retired at the same Rased on time with the same total annuity, Bawd on maxi- ing to about V/2--8 percent), in rec- formula 2 mum 3 and the first had a voluntary an- ognition of recent cost-of-living 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 cases receives a era1 years hence would, if no change greater increase. were made in the retirement pro- The increases also affect the amounts paid to survivor annuitants visions, be signiilcantly larger than Ii whose annuities begin before 1958, 104 for those already retired and those 604 retiring currently. Accordingly, some with the amount of the increase 1,104 adjustment seemed appropriate. based on the starting date of the survivor annuity. The increases do * Actual inerwsc is smaller of fiewes shown in 2 Under Public Law No. 369, for an- mlumns below. nuitants on the rolls before July 1955 not apply, however, to all survivor a 12 percent of first $1.560 of total annuity before in- benefits based on the earnings of crease, plus 8 percent of remainder. 3 $4,104 minus regular annuity (before increase). present retired employees (or those 4 Distribution between regular annuity and oohm- *Prepared in the Division of the Actu- tarp annuity dors not affect the amount of increase. ary. retiring before 1958) but rather only 5 Notspplimblr 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, pp. 1’79-184. Recent Pzdlzcations* A report on an investigation into the “black market” in babies. Social Security Administration Actuary, Social Security Adminis. General BUREAU OF PUBLIC ASSISTANCE. State tration, Washington 25, D. C. 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. New York: 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 e a d e T s h i p Washington 25, D. C. LIAM F. Social Stratification in Through Consultation: How a INTERNATIONAL SERVICE. OFFICE OF the United States. New York: 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.