AMENDING THE CENTRAL INTELLIGENCE AGENCY RETIREMENT ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000700110005-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 16, 2016
• Document Release Date: May 23, 2005
• Sequence Number: 5
• Publication Date: July 22, 1968
• Content Type: REPORT

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90TII CONGRESS HOUSE OF REPRESENTATIVES REPORT
2d Session No. 1766
AMENDING THE CENTRAL INTELLIGENCE AGENCY
RETIREMENT ACT
JULY 22, 1968.-Committed to the Committee of the Whole House on the State of
the Union and ordered to be printed
Mr. PIIILBIN, from the Committee on Armed Services,
submitted the following
REPORT
The Committee on Armed Services, to whom was referred the bill
(H.R. 18786) to amend the Central Intelligence Agency Retirement
Act of 1964 for certain employees, and for other purposes, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
PURPOSE OF THE BILL
The purpose of the bill is to bring the cost-of-living feature of the
Central Intelligence Agency retirement system into consonance with
other major Federal retirement systems. Specifically, as of January 1,
1967, it would increase annuities under the Central Intelligence
Agency retirement system by the same percentage increase in force
and effect for comparable annuities under the civil service retirement
system. It also authorizes subsequent cost-of-living adjustments under
the Central Intelligence Agency retirement system to be made under
the same formula which applies to civil service annuities.
The first year cost of this bill is estimated to be $142,700. In
In succeeding years the cost will be approximately $90,000.
On August 11, 1966, this committee reported H.R. 16306, which
in section 208 amended the Central Intelligence Agency Retirement
Act cost-of-living provision to bring it into line with the new cost-
of-living provisions which had been approved by the Congress for
the benefit of retirees under the civil service system. H.R. 16306 was
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approved by the h otlse on October 3 1966, but there was no 1'urther
action before the close of the S9th Congress.
The Postal and Federal Eiiiplovees Pay Act of 1962, (Public Law
87-793, approved in October 1962) established the first cost-of-living
adjustment formula for the civil service retirement system. As a part
of the cost-of-livili'. adjtlstuteat concept thid, law also provided 1965
civil service retirees a 2-percent annuity adjustment (1 percent for
1966 retirees). No such adj usttnen t was provided for personnel covered
by the Central Intelligence Agency system.
In September of 1965 the civil service cost-of-living formula was
changed by Public Law 89-205 so that the minimum period for meas-
urilig percentage increases to trigger an adjustment was compressed
from 1 calendar year to 3 consecutive months. (Thus, an actual increase
could occur after any 3 months of a 3-percent increase in the consumer
price index as against the old requirement of an average 3-percent
increase for a full calendar year plus it 3-month waiting period.)
since 1965 three cost-of-living adjustments have been granted
under the civil service retirement system, but only one increase has
been authorized under the Central Intelligence Agency retirement
system. The one cost-of-living increase granted under the Central
Intelligence Agency retirement system amounted to 4.6 percent and
was restricted to 1965 retirees and paid on April 1, 1967. This com-
pares with increases in force and effect under the civil service system
of 16.8 percent (cumulative) for 1965 retirees, 9 percent (cumulative)
for 1966 retirees, and 3.9 percent for 1967 and some 1968 retirees.
This disparity is primarily due to the differences between the civil
service and CIA formulas. The following charts illustrate the extent
of this disparity, and show how the bill would eliminate it:
July 1,1965 Annuity of $6,000________________ Annuity ct $6,000 -------- _ Annuity of $6,000.
Do ------- 2-percent increase=$120; Public None -------------------- None.
Law 87-793, $6,120.
Dec.
1,1965
6.1-percent increase=$373; COL
adjustment (including 1.5 per-
None ____----------------- None.
cent, Public Law 89-205), $6,493.
Jan.
1,1967
3.9-percent increase=$353; COL
adjustment; $6,746.
None_____ --------------------- 12.4-percent increase=$744; COL
adjustment; sec. 291(a)(1),
744
$6
Apr.
1,1967
None___ - ------------------------ 4.6-percent increase -=
.
,
Existing 4.6-percent increase;
$276; CDL adjustment;
offset, sec. 291(c).
$6,276.
May
1, 1968
3.9-percent increase:=$263; COL
None; current annuity,
3.9-percent increase=$263; COL
adjustment; current annuity,
$6,276.
adjustment; sec. 291(a)(2);
$7,009.
current annuity, $7,007.
July 1, 1966___ Annuity of $6,500-------------- ._ Annuity of $6,500 ------- __ Annuity of $6,500.
Do______ 1-percent increase=$65; Public None--- ---------------- lone.
Law 87-793; $6,565.
Jan. 1, 1967___ 3.9-percent increase.=$256; COL
adjustment; $6,821.
May 1, 1968 --- 3.9-percent increase=$266; COL
adjustment; $7087; current an-
nuity, $7,087.
---- Do------------------- 4.9-percent increase -$319; sec.
291(a)(1); $6,819.
None; $6,500 ------------- 3.9-percent increase=$266; sec.
None; $6,500; current an- 291(aX2); $7,085; current an-
nuity, $6,500. nuity, $ ,085.
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CHART 3.-COST-OF-LIVING ADJUSTMENTS TO BE ASSUMED $7,0001 ANNUITY FROM JULY 1, 1967
Date Civil service-Existing law CIA-Existing law CIA-H.R. 18786
July 1,1967 Annuity of $7,000----------------- Annuity of $7,000 ---------- Annuity of $7,000.
May 1,1968 3.9-percent increase=$273; COL None; current annuity, 3.9-percent increase=$273; COL
adjustment; current annuity, $7,000. adjustment; sec. 291(a)(2);
$7,273. current annuity, $7,273.
I Amount of assumed annuity for 1967 is increased $500 over the amount shown for 1966 in chart 2 to reflect probable
increase based on higher high-5 average salary.
ExPLANA`LION OF BILL DY SUBSECTION
Subsection (a) provides that increases shall be based upon deter-
minations made by the Director pertaining to percentum changes in
the price index.
Subsection (a) (1) authorizes effective January 1, 1967, percentage
increases of annuities under the CIA retirement system equal to those
in force and effect under the civil service retirement system its of
January 1, 1967.
Subsection (a) (2) provides for subsequent cost-of-living adjust-
ments effective the first day of the third month beginning after the
price index shows a rise of at least 3 percent for 3 consecutive months
over the base month. All annuities which commence on or before such
effective date will be increased by the percentage rise in the price
index. An increase will be computed on the highest percent of the 3
consecutive months, adjusted to the nearest one-tenth of 1 percent.
The month. forming the basis for the increase will become the new
base month for determining the next cost-of-living adjustment.
Subsection (a) (2) will produce it 3.9-percent cost-of-living adjustment
as of May 1, 1.968.
Subsection (a) (2) preserves the cost-of-living adjustment principle
for future retirees and survivors of deceased employees but restricts
the amount of increase to only that percentage rise occurring on or of ter
the commencing dates of their annuities.
Subsection (b) (1) guarantees that survivor annuitants shall receive
the increases granted the annuitant up to the time of his death.
Subsection (b) (2) preserves for surviving children whose annuity
commences after January 1, 1967, the 2- and 1-percent increases
reflected in the catchup increase granted their parents under
subsection (a) (1).
Subsection (b) (3) provides that the fixed dollar amounts for children
survivors shall be increased along with the cost-of-living adjustments
granted under section 291.
Subsection (c) offsets any cost-of-living adjustment granted prior
to this amendment. This involves the 4.6-percent increase granted
on April 1, 1967, to 1965 retirees and their survivors. The rise in the
consumer price index on which the 4.6-percent increase was based is
covered by the catchup increase provided under subsection (a) (1).
Subsection (d) changes the definition of the term "price index"
from the annual average of the consumer price index over a calendar
year to that published monthly by the Bureau of Labor Statistics. It
further defines the month used in determining that the price index
warrants a cost-of-living adjustment as the "base month." The base
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month for the next increase, if any, is February 1968 which is estab-
lished as a result of the operation of subsection (a)(2).
Subsection (e) retains the usual language precluding an increase on
any additional portion of annuity that was purchased by a retiree by
voluntary contributions.
Subsection (f) retains the customary requirement that the monthly
annuity, as increased, be adjusted to the nearest dollar. It provides,
however, for reflecting an increase of at least $1 per month, wherever
an increase would not otherwise cause a small annuity to be adjusted
to the next higher dollar.
FISCAL DATA
Enactment into law of this measure will involve a total additional
cost for the first year in the approximate amount of $142,700.
DEPARTMENTAL DATA
This bill is part of the administrative legislative program for the
90th Congress as is evidenced by letter dated February 27, 1967, from
the Director of the Central Intelligence Agency which is attached
hereto and made a part of this report. It is pointed out that the letter
refers to a bill of broader scope than here reported by the committee.
CENTRAL INTELLIGENCE AGENCY,
OFFICE OF THE DIRECTOR,
Hon. JoHN W. MCCORMACKWashington, D.C., February 27, 1967.
,
kSpeaker of the House of Representatives,
Washington, D. C.
DEAR MR. SPEAKER: This letter transmits for the consideration
of the Congress a draft bill to amend the Central Intelligence Agency
Act of 1949, as amended, and for other purposes. The proposed bill
provides for technical. amendment to legislative authorities pertaining
to the Central Intelligence Agency. Some of the provisions are nec-
essary to achieve desired legal clarification of existing Agency author-
ity. Others are necessary to provide authorities which have been
granted by Congress elsewhere in Government for travel, medical
care, claims, retirement, and similar housekeeping-type programs.
We consider enactment of the proposed bill to be essential to the
effective performance of our mission and would appreciate early and
favorable consideration. The Bureau of the Budget has advised that
there is no objection to the presentation of the -proposed bill to the
Congress from the standpoint of the administration's program.
Respectfully,
RICHARD HELMS, Director.
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