When a member on the TDRL is found fit for duty he may, with his consent, be returned to active duty. The number of individuals who desire to return to active duty is, however, negligible. The vast majority accept separation.

PERMANENT DISABILITY

Chairman ELLENDER. At this point in the record there will appear information from the justifications indicating the average number of officers and enlisted personnel on the permanent disability rolls for fiscal years 1970, 1971, and 1972.

(The information follows:)

SUMMARY FOR FISCAL YEARS 1970-72, PERMANENT DISABILITY RETIREMENTS

Mr. SPENCE. The permanent disability category is composed of personnel whose disability has been definitely established as "permanent". Persons may be placed on the permanent disability rolls immediately following the termination of their active duty or by transfer from the temporary disability rolls. It is estimated that $548.6 million or 14.5 percent of the total appropriation request will be required in fiscal year 1972 for an average of 133,688 permanently disabled retired military personnel. This compared with an average of 125,944 now estimated for fiscal year 1971.

CAUSES OF PERMANENT DISABILITY

Senator ELLENDER. Do you have any figures reflecting the causes of permanent disability retirement? For example, generally speaking, can you tell the committee how many on the permanent disability rolls have combat-connected disability? And if you can, indicate what other categories of permanent disability there are and what percentage of personnel fall into each.

Mr. SPENCE. The Department of Defense compiles a semiannual report of the causes of all physical disability retirements and separations. However, this report does not show which causes are combat-related. Some of our data systems contain information of this type but the data

are not readily available. I do have a table which I will submit for the record which shows the causes of physical disability retirements and separation for all of the Armed Forces for the period January 1, 1970 through June 30, 1970.

(The information follows:)

ARMED FORCES PHYSICAL DISABILITY RETIREMENTS AND SEPARATIONS BY LAW, JAN. 1, 1970 TO JUNE 30, 1970

Chairman ELLENDER. At this point in the record there will appear a tabulation from the justifications indicating the number of enlisted personnel listed in the Fleet Reserve for fiscal years 1970, 1971, and 1972.

Mr. SPENCE. The Fleet Reserve category is composed of Navy and Marine Corps enlisted personnel having 20 but less than 30 years of service who elect to transfer from active duty to the 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. It is estimated that $363.2 million or 9.6 percent of the appropriation request will be required in fiscal year 1972 to provide for an average of 107,859 Fleet Reservists. This compared with an average of 107,929 now estimated for fiscal year 1971.

Chairman ELLENDER. The pay for those people in that category is the same as in other categories?

Mr. SPENCE. Yes; they are receiving so-called retainer pay, and that is computed in exactly the same fashion as the retired pay of Army and Air Force enlisted personnel and others who in fact retire.

NUMBER IN FLEET RESERVE PROJECTED

Senator ELLENDER. I note that for fiscal year 1972 the average number of personnel in the Fleet Reserve is approximately the same number as that estimated for fiscal year 1971. Do your projections indicate that the number will probably level off at something approaching that figure?

Mr. SPENCE. Yes, sir. As I mentioned previously, the maximum period a Navy or Marine Corps member is in the Fleet Reserve is 10 years. He is then transferred to the retired list. It is believed that for the next few years, the new entrants into the Fleet Reserve and the transfer to the retired list from the Fleet Reserve will be approximately in balance.

UTILIZATION OF FLEET RESERVE

Senator ELLENDER. Have there been any recent instances in which substantial numbers of the Fleet Reserve have been called back into active duty?

Mr. SPENCE. Yes, sir, in the years 1965-69 there were over 750 Navy and Marine Corps enlisted men with skills which were in short supply who were recalled to duty from the Fleet Reserve. There were also 500 or 600 Army and Air Force retired enlisted men recalled for service during those years.

OFFICER PERSONNEL

Senator ELLENDER. As I understand it, the members of the Fleet Reserve are all enlisted personnel. How would additional officers be provided in the event of need?

Mr. SPENCE. Fleet reservists are all enlisted men. If there is a need for officers, there is of course, the Reserve which could be called into service. Retired personnel of the Army and Air Force can be called into active service by the President at any time. Navy and Marine Corps retired personnel can be called to active duty in time of war or national emergency.

SURVIVORS' BENEFITS

Chairman ELLENDER. At this point in the record there will appear iuformation from the justifications showing the average number of participants in the survivors' benefits program for fiscal years 1970, 1971, and 1972.

(The information follows:)

Mr. SPENCE. The survivors' benefits category includes the amounts estimated to be required to make payments to survivors of retired personnel pursuant to the retired servicemen's family protection plan. This is a self-supporting plan which permits members of the uniformed services to receive a reduced amount of retired pay in order to provide one or more annuities specified in the plan for his survivors. The amount of the reduction in each member's case is computed by the actuarial-equivalent method; that is, the total amount of reduced retired pay received by the member and the benefit payments made to his survivors will, on the average, not exceed the total amount of retired pay the member would have received had he not participated in the program plus interest on the amounts so withheld.

It is estimated that $12.9 million or 0.3 percent of the total appropriation request will be required to provide for an average of 9,123 in fiscal year 1972. This compares with an average of 8,277 now estimated for fiscal year 1971.

COMPUTATION PROCEDURE

The amounts included for each of the categories are mathematical computations of averages of the rates presently prescribed by law applied to the best available projections of the number of personnel to be carried on the rolls in fiscal years 1971 and 1972.

MANDATORY PAYMENTS AND REVISION OF EXCESS FUNDS

Payments under this appropriation are required by law and any funds not required revert to the Treasury at the end of the fiscal year.

LOW UTILIZATION OF SURVIVORS BENEFITS PLAN

Senator ELLENDER. I note that the benefits due survivors are not tied in with cost of living retirement benefits. Would you explain what the reasoning is in this respect?

Mr. SPENCE. The retired serviceman's family protection plan was originally enacted in 1953 to provide a means whereby retired military personnel could purchase from their retired pay an annuity for their

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survivors. That plan was and is required to operate on the actuarial equivalent basis, that is on the average the plan will be self supporting from the contributions of the retired members. Adjusting annuities based on increases in the cost of living would be difficult if not impossible in the case of an actuarial equivalent plan. The continuing erosion of the purchasing power of fixed annuities such as are provided by the retired serviceman's family protection plan is a real problem.

Senator ELLENDER. Last year there was testimony to the effect that only 17 percent of all retired personnel participate in this survivors' benefits plan. What is the reason that this percentage is so low?

Mr. SPENCE. Mr. Chairman, we have no specific data which indicates the reason for the low participation in this survivors benefit plan. However, the complaint which we hear most frequently is that the plan is so costly that most retirees feel they cannot afford what in most cases is a rather substantial reduction in their current retirement in order to provide an annuity for their dependents in the event of their death. Except for the cost of the plan which is computed on the actuarial equivalent basis, we believe the plan is a good one.

INTRODUCTION OF ASSOCIATES

Mr. SPENCE. Mr. Chairman, Col. Thomas J. Money, USAF, the Director of Compensation Affairs of the Office of the Deputy Assistant Secretary of Defense for Military Personnel Policy, and Mr. Carl M. Detwyler, Director of the Military Personnel Directorate of the Office of the Deputy Assistant Secretary of Defense (Comptroller) are with me today. We will attempt to answer any questions the chairman or committee members may have.

PROGRAM TERMINATION COST

Chairman ELLENDER. Please provide a statement of the unfunded liability of the Federal Government similar to that given last year. Mr. SPENCE. Yes; we will submit it for the record.