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FPCD-79-69 1 (1979-07-12)

handle is hein.gao/gaobaazlr0001 and id is 1 raw text is: 
                                                        io   6Q

               COMPTROLLER GENERAL OF THE UNITED STATES
                        WASHINGTON. D.C. 20548         LtiO9860


B-194426                                      JULY 12, 1979




The Honorable David Pryor
Chairman, Subcommittee on Civil Service
  and General Services
Committee on Governmental Affairs
United States Senate                                109860

Dear Mr. Chairman:

     Your letter of March 19, 1979, referred to our
December 29, 1978, report entitled Need for Overall Policy
and Coordinated Management of Federal Retirement Systems
(FPCD-78-49) and asked if we had any additional comments on
legislation which was introduced in the 94th and 95th Con-
gresses, H.R. 2660 and H.R. 5181, respectively, regarding
civil service retirement credit for employees of nonappro-
priated fund instrumentalities (NAFI). You expressed par-
ticular interest in a constituent's suggestion that former
NAFI employees be allowed to buy into the civil service
retirement fund for years of NAFI service.

     NAFI personnel meet the general criteria used to de-
fine Federal employees but are excluded by law (5 U.S.C.
2105) from civil service retirement coverage. The law stip-
ulates that employees paid from nonappropriated funds of
certain Department of Defense and Coast Guard instrumental-
ities are not subject to certain laws administered by the
former Civil Service Commission (now the Office of Person-
nel Management), including the civil service retirement
system. The exceptions were made in response to a Defense
request so that NAFIs could establish personnel management
systems competitive in cost and flexibility with those of
private, commercial retail operations and recreation activ-
ities.

     Defense has six separate NAFI retirement plans--Army;
Air Force; Navy; and Marine Corps; plus the two major mili-
tary exchange systems, the Navy Resale System Office and
the Army and Air Force Exchange Service (AAFES). The first
plan was established in 1946 for AAFES and the most recent
plan in 1976 for the Air Force. The Coast Guard also has
a retirement plan for its NAFI employees.

                                                  FPCD-79-69
                                                  (963128)

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