of Defense." This appropriation request represents a consolidation of the estimates of the military departments for the (1) pay of retired military personnel on the retired lists of the Army, Navy, Marine Corps, and Air Force, (2) retainer pay of members of the Navy and Marine Corps Fleet Reserves, and (3) payments to eligible survivors pursuant to the Uniformed Services Contingency Option Act of 1953. MAJOR CATEGORIES OF PERSONNEL Personnel paid from this appropriation are covered under five major categories, namely: nondisability, temporary disability, permanent disability, Fleet Reserve, and survivors' benefits. NONDISABILITY The nondisability category includes personnel retired by reason of length of service or age. Substantial increases in the rate of acces sions in this category have occurred this year and are expected to continue during the next few years as personnel who entered on active duty during and immediately prior to World War II become eligible for voluntary retirement after 20 years of service. In addition, more Fleet reservists completing 30 years of combined active service and service in the Fleet Reserve are being transferred to the regular retired rolls. The estimate provides for an increase of over 34,000 annuitants to the nondisability retired rolls in fiscal year 1962, an increase of 14,000 over the number of accessions projected in fiscal year 1961, or 20,000 in that year. It is estimated that $539.9 million will be required to provide for an average of 173,900 annuitants in this category in fiscal year 1962. This compares with an average of 143,800 annuitants at a cost of $451.6 million estimated for fiscal year 1961. TEMPORARY DISABILITY The temporary disability category is an interim classification for disabled personnel where there is some doubt as to the degree of permanency of the disability. Personnel are placed on the temporary disability list for a period of not to exceed 5 years in accordance with title IV of the Career Compensation Act of 1949. During this 5-year period physical examinations are required at least once every 18 months to determine whether such individuals can be rehabilitated and returned to active duty, should be discharged, or transferred to the permanent disability rolls. It is estimated that the average number of annuitants will be increased from 14,722 in fiscal year 1961 to 16,037 in fiscal year 1962, which, under current rates, will require approximately $33.8 million. PERMANENT DISABILITY The permanent disability category includes disabled personnel who are placed on the permanent disability rolls immediately after hospitalization when the degree and permanency of the disability can be determined immediately and those transferred from the temporary disability rolls. Recent experience shows that noncombat casualties of a permanent nature are less than those of previous years, and this experience has been given consideration in computing the estimate. Under current compensation rates as authorized by law, it is estimated that approximately $205.6 million will be required in fiscal year 1962 based on an average of 73,686 permanently disabled annuitants. This compared with $203.1 million for an average of 72,000 in 1961. Mr. ANDREWs. These figures cover all branches of the service? Mr. WYLIE. Yes, sir. These are combined for all branches of the service. FLEET RESERVE The Fleet Reserve category includes Navy and Marine Corps enlisted personnel having 20 but less than 30 years of service who elect to transfer from active duty to the inactive Fleet Reserve. Upon completion of 30 years of combined active service and service in the Fleet Reserve or upon being found physically unfit for further military service, such personnel are transferred to the regular retired rolls. The estimate is based on adding approximately 13,000 enlisted personnel transferring to the Fleet Reserve rolls next year and losing approximately 1,500 to the permanently retired list for a net gain of around 11,500 in the fleet reserve. On this basis, an average of 53,826 Fleet reservists has been projected in fiscal year 1962, which will require approximately $112 million at currently authorized rates. This compares with $86 million required in 1961 for an average of 41,000 fleet reservists. SURVIVORS' BENEFITS The category "Survivors' benefits" includes the amounts estimated to be required to make payments to survivors of retired personnel pursuant to the Uniformed Services Contingency Option Act of 1953. This act permits members of the uniformed services to take a reduction in their retired pay in order to provide one or more annuities specified in the act to survivors. Payments to survivors during fiscal year 1962 will be less than the amounts which will be deducted from the pay of retired personnel. The reductions in retired pay are estimated at $10.3 million, whereas payments to survivors will approximate a little more than $3.6 million. The number of additional survivors who will become eligible for payments under this act has been based upon actuarial factors applied to those retired personnel electing such annuities for their survivors. It may be of interest to the committee to know that from the inception of this legislation a total of $56,428,000 will have been deducted from the retired pay of military personnel electing this annuity for survivors, with payments of approximately $15,044,000 through fiscal year 1962. Mr. ANDREWS. $56 million collected, $15 million paid. Mr. WYLIE. That is right, sir. I have a table which I have furnished each of the committee members which gives this information by fiscal year. (The table may be found at p. 859.) SUMMARY Payments under this appropriation are required by law and any funds that are not required revert to the Treasury at the end of the year. The amounts included for each of the categories are mathematical computations of the rates presently prescribed by law applied to the best available projections, at the time the estimates were prepared of the number of personnel to be carried on the rolls. The appropriation request of $895 million represents the minimum amount required for these purposes in fiscal year 1962. No provision is made in this appropriation request for any of the expenses incurred in connection with the administration of the program. No provision has been made in these estimates for proposed legisla tion which would authorize military personnel who retired prior to June 1, 1958, and who receive pay under the provisions of the Career Compensation Act of 1949, as amended, to receive benefits consistent with the higher rates of pay provided by the Military Pay Act of 1958. There are attached for the information of this committee statements in summary and for each service showing the actual and estimated number of annuitants for fiscal years 1960, 1961, and 1962 with actual and estimated cost. I have Mr. Spence here, who is an expert on retired pay legislation from the Department of the Air Force and also members of the Army, Marine Corps, and Navy, who will be very happy to contribute to the information which might be required by this committee. Mr. ANDREWS. Mr. Wylie, how are the administrative expenses in connection with this program paid? Mr. WYLIE. They are paid through the regular "Operation and maintenance" appropriations of the military departments and as part of their regular programs for the administration of personnel within the Military Establishment. NEW OBLIGATIONAL AUTHORITY, OBLIGATIONS, AND UNOBLIGATED Mr. ANDREWS. You state payments under this appropriation are required by law and any funds that are not required revert to the Treasury at the end of the year. Mr. WYLIE. Yes, sir. Mr. ANDREWS. I guess fiscal year 1960 was the last year on which you have figures showing the amount returned to the Treasury? Mr. WYLIE. Yes, sir; that is correct. Mr. ANDREWS. Can you tell me how much was appropriated that year and how much of that was returned to the Treasury? If you don't have those figures, I wish you would furnish them for the record, covering the last 5 years. Mr. WYLIE. Yes, sir. I would be very happy to, sir. Mr. ANDREWS. Mr. Ford. Mr. FORD. That is to be the amount of appropriation and the unobligated or unexpended amounts if any? Mr. ANDREWS. That is right, all of which is returned to the Treasury. (The information requested follows:) MILITARY RETIRED PAY New obligational authority, obligations. and unobligated balance, fiscal years 1956–60 Mr. OSTERTAG. These tables that are attached to your statement are the summary of the services, each service plus the Department of Defense; is that right? Mr. WYLIE. The first page is a consolidated summary of the whole Military Establishment of all retired military personnel. Mr. ÖSTERTAG. The first one is a consolidation of all? Mr. WYLIE. That is correct, sir. Mr. OSTERTAG. In that connection, you have $362 million for 1962 for the Army, $339 million for the Navy, $43 million for the Marine Corps, and $151 million for the Air Force. Does that total the $895 million? Mr. WYLIE. Yes, sir; it does. NUMBER OF RETIRED PERSONNEL AND COST Mr. ANDREWS. I want to ask the reporter to put that sheet in the record at this point and I have here a statement as of December 31, 1960, showing the disbursements under this program. Mr. WYLIE. Yes, sir; for each military department and also total. (The sheet referred to follows:) |