Please arrange for the necessary transfer of funds and advise the agency concerned.

Sincerely yours,

(Signed) FRANKLIN D. ROOSEVELT.

THE WHITE HOUSE, Washington, December 17, 1940.

The Honorable the SECRETARY OF THE TREASURY. MY DEAR MR. SECRETARY: In accordance with the provisions of the items "Emergency fund for the President," contained in the Naval Appropriation Act, 1941, approved June 11, 1940, and the Military Appropriation Act, 1941, approved June 13, 1940, I hereby make the following allocations:

To Civil Service Commission:

To be expended by said Commission for the employment of persons and means at the seat of Government and elsewhere for the recruitment and placement of civilian personnel required in connection with emergencies affecting the national ecurity and defense.

Please arrange for the necessary transfer of funds and advise the agency conBerned.

Sincerely yours,

(Signed) FRANKLIN D. ROOSEVELT.

Mr. WOODRUM. Did the Commission make a request for the allocation out of these emergency funds for anything for the next fiscal year? Mr. CUSTER. No, sir, not for the fiscal year 1942.

Mr. WOODRUM. Is it anticipated getting any money for additional positions if this money is appropriated?

Mr. CUSTER. The Commission does not now anticipate getting any money out of the emergency funds during 1942, in the face of our present work load. If the work load should increase, the Commission, of course, will probably feel that it would have to present the acts to the Bureau of the Budget, and in turn that request would go from the Bureau of the Budget, through the President, to the Congress.

CIVIL-SERVICE RETIREMENT AND DISABILITY FUND

Mr. WOODRUM. We also have before us the following item for the civil service retirement and disability fund:

For financing of the liability of the United States, created by the Act entitled An Act for the retirement of employees in the classified civil service, and for Ther purposes," approved May 22, 1920, and Acts amendatory thereof (38 . S. C. 11), $100,911,562, which amount shall be placed to the credit of the civil service retirement and disability fund."

Will you tell us about that?

JUSTIFICATION OF ESTIMATES

Mr. CUSTER. Mr. Chairman, we submit the following justification. for this item:

Appropriation: Civil service retirement and disability appropriated fund, 1942 Actual appropriations or estimates and net amount available:

Estimated 1942..

Appropriated 1941.

Appropriated 1940..

$100, 911, 562

90, 754, 000 86, 329, 000

The Government's contribution to the civil service retirement and disability appropriated fund for the fiscal year 1941 is $90,754,000.

In accordance with the estimate contained in the Nineteenth Annual Report of the Board of Actuaries of the civil service retirement and disability fund, there has been included in the Commission's formal estimates of appropriations an item of $100,911,562 as the Government's share of the contribution to the fund in question. Pending the completion of the quinquennial survey of the civil service retirement and disability fund, which is being made during the current fiscal year, it is recommended that this amount be appropriated.

FINANCING OF THE FUND

Mr. WOODRUM. Will you tell us something about the financing of the Civil Service Retirement and Disability Fund?

Mr. CUSTER. The amount requested by the Commission for the Civil Service Retirement and Disability Fund is the amount recommended by the Board of Actuaries, which is the amount believed to be absolutely necessary for the Government to contribute during the fiscal year 1942. Under the Retirement Act, each member of the fund pays 31⁄2 percent of his compensation into the fund. If he leaves the service before he becomes eligible for retirement, he may withdraw his credited contributions with interest; that is, he may withdraw tha part of his contributions in excess of $1 a month, with interest. In case of death or involuntary withdrawal not due to removal for cause his total contributions with interest are returned. At retirement his credited contributions are used to provide an annuity to which the Government adds an annuity from its contributions.

The Retirement Act does not set a definite percentage contribution which will be payable by the Government to provide the annuitie for which it is responsible. It does provide, however, that ther shall be submitted annually to the Bureau of the Budget estimates o the appropriations necessary to finance the fund and to continue i in full force and effect.

Beginning with the fiscal year 1929, the Government has mad regular payments to the fund, and in making these payments it ha been guided by the plan of financing recommended by the Board o Actuaries. Under this plan two annual contributions are payable t the fund, namely, a normal contribution and a deficiency contribu tion. Just as each member pays a certain percentage of his salary t provide his prospective annuity, the Government pays a certai percentage of the salary of all members, known as its "normal con tribution," to provide that part of the annuities at retirement base on service rendered by employees as members, for which it is respon sible. In addition, a certain annual payment by the Government necessary to cover the cost of benefits payable on account of service rendered before regular contributions were begun. When the fun was established, employees were credited with service on account o which no contributions had been made by either the employees o the Government, so that the fund did not have the assets that woul have been in it had contributions been made during the period fo which credit for service was allowed. The fund therefore bega operation with an accrued liability, or deficit, equal to approximatel what those contributions would have been. The Board of Actuarie recommended that this deficit be liquidated by payments to the fun over a period of years in the future.

(The following tables were submitted later:)

The Civil Service Retirement and Disability Fund-Amended report to show roluntary contributions July 1, 1939, through June 30, 1940

CANAL ZONE RETIREMENT AND DISABILITY FUND

Mr. WOODRUM. We also have the following item for the Canal Zone retirement and disability fund:

For financing of the liability of the United States, created by the Act entitled "An Act for the retirement of employees of the Panama Canal and the Panama Railroad Company, on the Isthmus of Panama, who are citizens of the United States", approved March 2, 1931, and Acts amendatory thereof (48 U. S. C. 1371n), $1,177,000, which amount shall be placed to the credit of the "Canal Zone retirement and disability fund".

JUSTIFICATION OF ESTIMATE

Mr. CUSTER. Mr. Chairman, we submit the following justification for that item:

Appropriation; Canal Zone retirement and disability appropriated fund, 1942

Actual appropriations or estimates and net amount available:

Estimated, 1942
Appropriated, 1941

Appropriated, 1940.

$1, 177, 000

1, 177, 000 500, 000

In accordance with the recommendations of the Board of Actuaries, contained in their nineteenth annual report, the Commission is estimating for a Government contribution of $1,177,000 to the Canal Zone retirement and disability appropriated fund for the fiscal year 1942. During the fiscal year 1942, a quinquennial survey will be made of this fund.

Mr. WOODRUM. The same thing is true of that item as of the preceding item?

Mr. CUSTER. Yes, sir; the same is true of that item as of the preceding item.

(The following data were submitted later:)

The Canal Zone retirement and disability fund receipts and disbursements, July 1, 1939, through June 30, 1940

ALASKA RAILROAD RETIREMENT AND DISABILITY FUND

Mr. WOODRUM. We also have before us the following item for the Alaska Railroad retirement and disability fund:

For financing of the liability of the United States created by the act entitled "An Act for the retirement of employees of the Alaska Railroad, Territory of Alaska, who are citizens of the United States," approved June 29, 1936 (49 Stat.