NUMBER OF GAINS AND LOSSES AND NET CHANGE TO THOSE PERSONNEL ON THE MILITARY RETIRED ROLLS Chairman ELLENDER. Please provide for the record the amount of the retirement increases in the past 5 years attributable to cost-of-living increases, together with the percentage of each increase. Mr. SPENCE. Yes, sir. (The information follows:) RETIREMENT INCREASES IN THE PAST 5 YEARS ATTRIBUTABLE TO COST-OF-LIVING INCREASES Senator YOUNG. According to the justifications, for fiscal year 1972 nondisability retirement will increase 20 percent over those for fiscal year 1970, temporary disability retirements will increase by 24 percent over the same period, and permanent disability retirements will increase 12 percent. These are very marked increases over so short a span of time. Please comment on each of them. Mr. SPENCE. The continued increase in the number of persons in the nondisability and permanent disability categories results from the fact that attrition through death is considerably less than the number of additions to the retired rolls. This in turn is the result of the fact that most persons now on the retired rolls are relatively young, having initially entered active service in World War II and did not begin to retire in large numbers until 1960. Since the attrition through death is as yet relatively small, and the additions to the retired rolls is relatively large as the result of the standing forces we have maintained for the past 30 years, it is inevitable that the size of the retired rolls will continue to increase relatively rapidly in the next few years. Only when substantial numbers of those on the retired rolls attain the ages at which considerable attrition through death occurs will the retired rolls level off. Turning to the temporary disability category the situation is different. The maximum period a member may be carried on this retired roll is 5 years. The large increase in the number in this category re flects the increase in the size of the active duty forces in the period 1966-1969 and further reflects the number of training and combat disabilities during those years. However, with the lower level of combat activities and the decrease in size of the Active Forces, there will be a substantial decrease in the number placed on the temporary list. As those now on the list are permanently retired, discharged with severance pay or returned to duty, the number of persons in this category will decrease. Chairman ELLENDER. What effect will the force reduction have on non-disability-retirement rolls?, Mr. SPENCE. Keeping in mind that eligibility for non-disabilityretirement requires completion of at least 20 years of service, the effect of a temporary increase in the size of the Active Force followed by a reduction to the previous force level has little long-term effect on the non-disability-retired rolls. Retirements which may have been delayed during a buildup in strength take place as soon as the force reduction begins. The net long-term effect is minimal. QUESTIONS BY SENATOR THURMOND Chairman ELLENDER. Senator Thurmond has asked that a number of questions be answered for the record. The questions and the answers will appear in the record at this point. (The information follows:) RETIREMENT PAY Question. Mr. Spence, in your statement you give FY 1972 military retirement pay at $3.7 billion. Also, you estimate an increase to $5.1 billion by 1976. On what is this estimate based? Answer. It is based on extending the January 1, 1971 military pay increase of 7.9% and the August 1, 1970 cost-of-living increase of 5.6%, and the estimated growth in the average number receiving retired pay to 1,110,000 Question. What percent of total military pay does the retirement pay make up? Answer. In fiscal year 1970, pay and allowances for active duty military personnel totaled $18.88 billion while retired military pay totaled $2.85 billion, which is 13% of the combined total of $21.73 billion. INDUSTRY RETIREMENT Question. Do you know how many major companies allow employees to retire after 20 years of service if they have no disability? Answer. Retirement after 20 years of service with an immediate annuity without regard to age is a liberal provision which probably is not authorized in the private sector in many instances. I am not aware of any recent report which would give us specific information as to how many major companies have such plans. Provisions for retirement after 30 years of service without regard to age are becoming increasingly common in industry. Retirement with an immediate annuity after 20 years of service is usually conditioned, on the employee having attained some specified age. MILITARY DISABILITY RETIREMENTS Question. What percent of those presently retired from military service have retired because of disability? Answer. In fiscal year 1970, the total average number of military personnel on the retired rolls was 742,584, of which 140,920 or 19% were for disability. RETIRED RESERVISTS Question. What percent of the retirement fund goes to pay retired reservists who earned retirement as "citizen soldiers" versus those who retired after a period of 20 or more years service? Answer. In fiscal 1970, $2.35 billion were for military personnel retired for nondisability reasons with 20 or more years of service, of which $0.11 billion or 5% was for Title III personnel. TABLES Chairman ELLENDER. Is there anything further you want to add? Mr. SPENCE. I have nothing to add. Chairman ELLENDER. The tables to which you refer will be made a part of the record. (The tables follow:) NEW OBLIGATIONAL AUTHORITY, OBLIGATIONS, AND UNOBLIGATED BALANCE, FISCAL YEARS 1950-70 NET INCREASES BY CATEGORY IN YEAR-END STRENGTHS FROM THE PREVIOUS FISCAL YEARS 1970-72 |