District of Columbia Retirement Reform Act Statement on Signing S. 1037 Into Law.

I have approved S. 1037, a bill which will provide a sound financial basis and important benefit reforms in the retirement systems for police, firefighters, teachers, and judges of the District of Columbia.

We have long recognized that these retirement systems face an ever-growing unfunded liability and need to be actuarially based to meet future commitments to District employees. Unlike previous administrations, mine has accepted the Federal share of the responsibility and costs for solving the District's current pension problems.

Last year, however, Congress enacted legislation that, in my view, overstated Federal responsibility. Accordingly, I withheld my approval of that legislation. At the same time, I expressed my desire to work with the Congress and the District of Columbia to develop acceptable retirement funding and reform legislation. I believe that S. 1037 reflects a laudable compromise among all the interested groups and achieves that objective.

Last year's legislation identified the Federal financial responsibility to the D.C. police, firefighters, teachers, and judges retirement systems as the entire unfunded liability attributable to employees who retired before home rule took effect on January 2, 1975. That was excessive. In contrast, S. 1037 defines the Federal share as 80 percent of the funded liability for those employees who retired on the basis of years of service and 33 1/3 percent for disability retirees before home rule. Under this, the Federal Government will make annual payments of up to $52 million to the District retirement systems over the next 25 years.

S. 1037 also provides many desirable reforms in service and disability benefits. They should do much to curb past abuses and provide more reasonable benefit levels. While I continue to believe that these reforms should apply to current as well as future employees, they represent a major improvement over the present statutory provisions. Coupled with the strengthened fiscal, managerial, and reporting requirements in the bill, they will contribute significantly to a sound future for the District's retirement system.