On page 9, line 18, delete the last sentence of section 6.

On page 10, line 5, after the comma following the word "concerned”, insert "and the Comptroller General of the United States,". On page 10, strike out all of lines 9, 10, 11, 12, and 13.

On page 12, strike out the words:

There are hereby authorized to be permanently appropriated such sums as may be necessary to carry out the provisions of this Act.

and insert in lieu thereof the following:

The payments authorized to be made under this Act shall be made out of applicable current appropriations which are made available for that purpose.

PURPOSE OF THE BILL

This bill proposes to grant personnel of the uniformed services the opportunity to share their retirement compensation with their surviving widows and children. To achieve this objective, the bill established a plan whereby officers and enlisted personnel of the Regular and Reserve components of the Army, Navy, Air Force, Marine Corps, Coast Guard, Coast and Geodetic Survey, and Public Health Service may elect to receive, upon entering a retired status, a reduced amount of their retired pay during their lifetime in order to provide annuities for their surviving widows and minor children.

Need for the proposed legislation

Under existing law career personnel of the uniformed services are unable to participate in any plan which would permit them to leave any portion of their retired pay to their surviving dependents.

Surviving dependents of deceased retired personnel of the uniformed services are not entitled to any benefits from the Government except those provided by the Veterans' Administration. The maximum pension which a widow of a retired member of the Armed Forces could receive from the Veterans' Administration, if she had no minor children, would be $75 a month providing her husband died from a service-connected disability incurred in time of war, or $60 a month if he died from a service-connected disability incurred in time of peace. The widow of a retired member would receive but $48 a month if her husband had a wartime disability but that disability was not the cause of his death, and then only if her income were less than $1,400 a year. Dependent children add to these benefits a small amount which ceases when the children become 18 years of age. These same benefits would accrue to the widows of retired officers of the Coast and Geodetic Survey and of the Public Health Service if the retired officer incurred a service-connected disability while detailed to and serving with the Armed Forces.

Background of the bill

The House Committee on Armed Services has had legislation of this type under consideration since the time that committee was organized.

In 1947 an interservice committee on pay and allowances, known as the Fechteler Board, prepared a report which dealt in part with the subject of survivor benefits and recommended remedial action.

A House bill to carry out the recommendations of the Fechteler Board was introduced in 1948, but in view of the appointment of the Advisory Commission on Service Pay, otherwise referred to as the

Hook Commission, legislative action was held in abeyance pending the Commission's report.

It developed that the report of the Hook Commission did not touch. upon this subject. As a consequence the Department of Defense recommended a bill which was introduced in the 81st Congress and which was the subject of hearings before a subcommittee of the House Committee on Armed Services. Doubts as to the actuarial soundness of the plan proposed by that bill and the extreme complexity of other features of the bill resulted in the subcommittee referring the matter back to the Department of Defense for further clarification.

A revised bill was introduced in the first session of the 82d Congress and was again the subject of hearings before a subcommittee of the House Committee on Armed Services. This bill, as was the case with its predecessor, dealt with the subject of survivor benefits in a comprehensive manner, rather than limiting itself to survivors of retired personnel. In the meantime other action taken in the 82d Congress with respect to benefits of active duty personnel removed much of the urgency for the survivor benefit plan under consideration before the House subcommittee. As a consequence, a new bill was introduced, limiting itself to benefits for survivors of retired personnel only. No action was taken on this bill, but after the adjournment of the 82d Congress the bill was subject to consultations held throughout the summer of 1952 with representatives of the Life Insurance Association of America, the National Association of Life Underwriters, and the American Life Convention. With the aid of the actuarial committee of the Life Insurance Association of America, certain technical changes were made in the bill which had been pending before the 82d Congress. This resulted in the present version of the bill, which was considered by the House Committee on Armed Services in May 1953, and which unanimously passed the House on June 10.

SUMMARY OF PRINCIPAL PROVISIONS OF THE BILL

Personnel covered by the bill

The bill applies to all officers and persons in enlisted grades of the uniformed services. The uniformed services are the Army, Navy, Air Force, Marine Corps, Coast Guard, Coast and Geodetic Survey, and Public Health Service, including all components and members thereof.

Retired pay to which bill applies

The bill applies to any retired pay awarded as a result of service in any one of the uniformed services, including retired pay awarded members of the Reserve components under Public Law 810, 80th Congress, for completion of 20 years of satisfactory Federal service. Method of providing annuities for the surviving widows and children of retired members

The bill would permit the election of a reduced amount of retired pay so as to provide an annuity equal to one-half, one-quarter, or one-eighth of the reduced amount of the retired pay, the annuity to be payable on the death of the member.

Annuities which may be elected

Four types of annuities may be elected:

(1) Annuity for the widow.-Payable to or on behalf of the widow. Terminates upon her death or remarriage, whichever occurs first. (2) Annuity for the child or children.-Payable to or on behalf of the surviving child or children. Terminates when there ceases to be at least one surviving child, unmarried and under 18 years of age. Where there is a child, unmarried and over 18 years of age who is incapable of self-support because of being mentally defective or physically incapacitated, the annuity would terminate upon the marriage of such child or his recovery from the disability, whichever occurs first.

(3) Annuity for the family.-Payable to or on behalf of the widow and surviving children. Terminates upon the death or remarriage of the widow, or, if later, on the first day of the month in which there were no surviving children under 18 years of age and unmarried. If there were a mentally defective or physically incapacitated child, unmarried and over 18 years of age, the annuity would terminate as stated in (2) above.

(4) Annuity with provision to cover contingency of beneficiary predeceasing retired member. This annuity may include the terms and conditions of (1), (2), or (3) above, with the added provision that no further deductions will be made in the retired pay of the retired member commencing with the first day of the month following that in which there is no beneficiary who would have been eligible to receive the annuity upon the death of the retired member.

Time of election

(1) For active members.-A member on the active list of a Regular or Reserve component of a uniformed service may make the election prior to the completion of 18 years of service which is creditable in the computation of his active-duty pay, the election to be effective if he has a widow, child, or children living on the date of his retirement. (2) For active members who have completed 18 years of service.-A mem ber on the active list of a Regular or Reserve component or a uniformed service who has heretofore completed the 18 years of service may make the election within 180 days after the effective date of the bill.

(3) For members retired for physical disability.-A member on the active list of a Regular or Reserve component of a uniformed service who is retired for physical disability prior to the completion of the 18 years of service, or a former member who is awarded retired pay for physical disability, may make the election at the time of retirement

(4) For members heretofore retired.-A retired member of a Regulat or Reserve component of a uniformed service who has heretofore been awarded retired pay by his uniformed service may make the election within 180 days after the effective date of the bill.

(5) For active members held prisoners of war.-A member on the active list of a Regular or Reserve component who, as a result of military or naval operations, is missing, missing in action, interned in a neutral country, captured by hostile forces, or beleaguered or be seiged, and who because of that status is unable to make the election within the specified time may make it within 6 months of his return to the jurisdiction of his uniformed service.

nality of election

An active member may modify or revoke his election at any time. ior to his retirement. Any modification or revocation however, uld not be effective if the member retired within 5 years after the te he makes the modification or revocation. An active member 10 revokes his election would not hereafter be permitted to again ake an election. The election made by a member who has heretoe been awarded retired pay would be irrevocable.

mitation on dependents

An annuity could only be provided for the person who was the ouse of an active member on the date of his retirement, or for the rson who was the spouse on the effective date of the bill of a member retofore awarded retired pay. The annuity to a child or children uld be limited to a legitimate child, a stepchild dependent upon the ember for support, or a legally adopted child, under 18 years of age d unmarried, who was born and is living at the date of retirement of active member or on the effective date of the bill in the case of a mber heretofore awarded retired pay. An annuity, however, could provided for a child over 18 years of age and unmarried if the child incapable of self-support because of being mentally defective or vsically incapacitated and that condition existed prior to his ching 18 years of age.

ard of Actuaries

The President is directed to convene annually, or oftener if he deems essary, a Board of Actuaries to be composed of the actuary from the easury Department, the Chief Actuary of the Social Security ministration, and an actuary selected from the membership of the iety of Actuaries. One of the duties of the Board of Actuaries uld be to select the actuarial tables to be used in determining the ount of the reduction thereafter to be made in retired pay in order provide the annuities elected.

thod of computing reductions in retired pay

Reductions to be made in the retired pay of members making the tion would be computed by the uniformed service concerned in h individual case as of the date of retirement in the case of an ive member and as of the date of election in the case of a member etofore awarded retired pay. The reduction would be computed an actuarial equivalent method using mortality and remarriage les selected by the Board of Actuaries and an interest rate of 3 cent a year, or such other rate as the Secretary of the Treasury y specify in the future after annual consideration of interest rates ng paid on other long-term United States Government obligations. ired members not receiving retired pay

Any member awarded retired pay by his uniformed service who has de the election to provide an annuity for his survivors and who any reason, such as employment on active duty or in a civilian ition under the Federal Government, is not receiving that pay uld be required to deposit with the United States Treasury the ount which would have been deducted from his retired pay had been receiving that pay.

The combination of options 1 and 2 provides for annuities of 1⁄4 retired pay to widow and child, separately, Reductions in annual retirement pay necessary to provide survivor with annuity of 1⁄2 of reduced pay

1 The combination of options 1 and 2 provides for annuities of 1⁄4 retired pay to widow and child separatelį NOTE. The foregoing examples are based on the 1937 Standard Annuity Table of Mortality, the America Remarriage Table and 3 percent interest. If the Board of Actuaries recommend other tables, the actu reductions made will differ from the examples cited.

SECTION-BY-SECTION ANALYSIS

Section 1-Gives the title by which the act may be cited

This section provides that the act may be cited as the "Uniforme Services Contingency Option Act of 1953."

Section 2-Defines certain terms used in the bill

(a) "Uniformed services."-This subsection defines this term # meaning the Army of the United States, Navy, United States A Force, Marine Corps, Coast Guard, Coast and Geodetic Survey, an Public Health Service, including all components and members thereo