LETTER TO MR. ANDREW RUDDOCK, DIRECTOR FROM(Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000700120040-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 16, 2016
• Document Release Date: June 1, 2005
• Sequence Number: 40
• Publication Date: March 1, 1967
• Content Type: LETTER

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s March 1967
M%,ir. Andrew Ruddock, Director
Bureau of Retirement and Insurance
Civil Service Commission
1900 E Street. N. W.
Washington. D. C. 204 1 5
Dear Mr. Ruddock:
On Monday I met with 1r. Edgard T. Braswell of the Senate
Arnied Services Committee staff on a draft bill to bring the CIA
Retirement Act of 1964 into phase with the annuity adjustment
provisions of P. L. 87-793 and P. L. 39-205.
Mr. Braswell plans to be in contact with you to verify that
the draft bill puts us in phase with the increases granted to
civil service annuitants under S'. L. 87-793 and P.L. 89-205.
Attached is a copy of the draft bill as well as a four page
analysis used in discussion with v r. Braswell. The analysis
sets forth the cumulative increases granted under P.L. 87-793
and P. L. 89-205. Mr. De:5ipio of your office was kind enough
to give us help on this on an inforn.al basis.
Sincerely,
Office of Legislative Counsel
Distribution:
Orig. and 1 - Addressee (w/encl.)
1 - Subject
1 - Chrono
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Annuity Increases by Commencing Dates
For Annuities
Commencing Between Annuity Increase Payable Between
(P. L. 87-793)(P. L. 89-205 & 314)
1.) Jan. 1, 1965 and Jan. 1, 1965 and
Dec. 31, 1965 ? ? . ? ? ? 2 % ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? . Dec. 31, 1965
2.) Jan. 1, 1965 and Nov. 30, 1965 and
Jan. 1, 1966 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? 6.1 % ? . . Jan. 1, 1966
3.) Jan. 1, 1965 and Dec. 31, 1966 and
Jan. 2, 1967 ? . ? ? ? ? ? ? ? ? ? ? ? ? ? ? 3. 9 % ? ? ? ? ? Jan. 2, 1967
4.) Jan. 1, 1966 and Jan. 1, 1966 and
Dec. 31, 1966 ? ? ? ? ? ? ? I %. ? ? ? ? ? ? . ? ? ? ? ? ? ? ? ? Dec. 31, 1966
1965 Retirees eligible for (1), (2), (3) = 12% not compounded (12.4% compounded)
1966 Retirees eligible for (3), (4) = 4. 9%
Proposal by Commencing Dates
For Annuities
Commencing Between Annuity Increase Payable
1 April 1965 and
Jan. 2, 1966? ? ? ? ? ? ? ? ? ? 12% . . . ? ? ? ? ? . ? Jan. 1, 1967
Jan. 1, 1966 and
Jan. 2, 1967 ? ? ? ? ? ? ? ? ? ? 4.9% ? ? ? ? ? ? ? ? Jan.1, 1967
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CIVIL SERVICE RETIREMENT ACT
ANALYSIS OF INCREASES GRANTED UNDER P. L. 87-793 and P.L. 89-205
(Participants in the CIA retirement system were first designated in
April 1965. Thus this analysis deals with increases accruing to
contemporary retirees and survivors under CSRA.)
Existing and Survivor Annuities
Section 1101 of P.L. 87-793 provides as follows:
"(b) The annuity of each person who receives or is entitled to receive
an annuity from the civil service retirement and disability fund com-
mencing during the period which begins on the day following the
effective date of this section and ends five years after such date,
shall be increased in accordance with the following table:
"If the annuity commences between--
The annuity shall be
increased by--
January 1, 1965, and December 31, 1965
--
2 per centum
January 1, 1966, and December 31, 1966
--
1 per centum
!'(c) In lieu of any other increase provided by this section, the annuity
of a survivor of a retired employee or Member of Congress who received
an increase under this section shall be increased by a percentage equal
to the percentage by which the annuity of such. employee or Member was
so increased. "
1
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II. Summary
(a) Annuities Commencing on or between 1 January 1965 and 31 Dec-
ember 1965. Annuities commencing on or between 1 January 1965
and 31 December 1965 were increased by 2 percent under P.L. 87-793.
However, such annuities have also been subjected to two further
increases under P.L. 89'-205 of 6. 1 percent and 3. 9 percent. Con-
sequently, the effective increase in force for such annuities is
12.4 percent. / (2x6.1)+(8.1 x3.9) +2+6.1 +3.9.1
(b) Annuities Commencing Between 1 January 1966 and 31 December
1966. Annuities commencing between 1 January 1966 and 31 Dec-
ember 1966 were increased by 1 percent under P. L. 87-793.
However, such annuities have also been increased by 3.9 percent
under P. L. 89-205. Consequently, the effective increase in force
for such annuities is 4. 9 percent. Fu x 3. 9) + 1 + 3.9./
(c) Under P. L. 87-793 and P. L. 89-205 survivors annuities are
increased by the percentage increase afforded the retiree annuity
from which it was derived.
2
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SEC. 291. (a) On the basis of determinations made
by the Director pertaining to per centum change in the price
index, the following adjustments shall be made:
(1) Each annuity payable from the fund
on January 1, 1967, shall be increased on that
date by (a) 12. 4 per centum for annuities which
commence on or before January 1, 1966, or (b)
4. 9 per centum for annuities which commence
on or between January 2, 1966, and January 1,
1967.
(2) Each month beginning with November
1966 the Director shall determine the per centum
change in the price index. Effective the first
day of the third month which begins after the
price index shall have equaled a rise of at least
3 per centum for three consecutive months over
the price index for the base month, each annuity
payable from the fund which has a commencing
date not later than such effective date shall be
increased by the per centum rise in the price
index (calculated on the highest level of the price
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index during the three consecutive months)
adjusted to the nearest one-tenth of 1 per
centum.
(b) Eligibility for an annuity increase under this sec-
tion shall be governed by the commencing date of each annuity
payable from the fund as of the effective date of an increase,
except as follows:
(1) Effective from its commencing date,
an annuity payable from the fund to an annuitant's
survivor (other than a child entitled under section
221 (c)), which annuity commences the day after
annuitant's death and after January 1, 1967, shall
be increased by the total per centum increase the
annuitant was receiving under this section at death.
(2) Effective from its commencing date, an
annuity payable from the fund to a child under sec-
tion 221 (c), which annuity commences the day after
annuitant's death and after January 1, 1967, shall
be increased by (a) 2 per centurn if the annuity from
which it is derived commenced on or before January
1, 1966, or (b) 1 per centum if the annuity from which
it is derived commenced on or between January 2,
1966 and January 1, 1967.
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(3) For the purposes of computing an
annuity which commences after January 1, 1967,
to a child under section 221 (c), the items $600,
$720, $1, 800, and $2, 160 appearing in section
221 (c) shall be increased by 10. 2 per centum plus
the total per centum increase allowed and in
force under section 291 (a) (2) for employee annuities,
and, in case of a deceased annuitant, the items
40 per centum and 50 per centum appearing in
section 221 (c) shall be increased by the total
per centum increase allowed and in force under
this section to the annuitant at death.
(c) The term 'price index' shall mean the Consumer
Price Index (all items--United States city average) published
monthly by the Bureau of Labor Statistics. The term 'base
month' shall mean the month of October 1966 for the first
increase under section 291 (a) (2) and thereafter the month
for which the price index showed a per centum rise forming
the basis for a cost-of-living annuity increase.
(d) No increase in annuity provided by this section
shall be computed on any additional annuity purchased at
retirement by voluntary contributions.
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(e) The monthly installment of annuity after adjust-
ment under this section shall be fixed at the nearest dollar,
except that such installment shall after adjustment reflect
an increase of at least one dollar.
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CIVIL SERVICE RETIREMENT ACT
ANALYSIS OF INCREASES GRANTED UNDER P. L. 89-205 and P. L. 89-314
(Participants in the CIA retirement system were first designated in
April 1965. Thus this analysis deals with increases accruing to
contemporary retirees and survivors under, CSRA.)
I. Initial Adjustment
All existing annuities with a commencing date on or before 31 December
1965 were increased by 6. 1 percent.
II. Subsequent Adjustment
All existing annuities commencing on or before 1 January 1967 were
increased by 3. 9 percent and this is the increase in force for annuities
commencing on or between 1 January 1966 and 1 January 1967. However,
the increase in force for existing annuities with a commencing date earlier
than 1 January 1966 is 10. 2 percent, r(6. 1 x 3. 9) + 6. 1 + 3. 9.7
III. Exception for Survivors
Generally the eligibility for cost of living increases is governed by the
commencing date of each annuity payable as of the effective date of
each increase. Exceptions for survivors do apply however. .
a. A retiree survivor (other than a child) receives whatever percentage
increase the retiree had been allowed at time of death.
1. If the survivor annuity is derived from a retiree's annuity commenc-
ing on or before 31 December 1965, the increase in force would be
10. 2 percent to date. If it is derived from an annuity commencing
on or between 1 January 1966 and 1 January 1967, the increase in
force would be 3. 9 percent to date.
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 * including derivative survivor annuities
Effective date
1 Dec 1965 -
31 Dec 1965
1 Jan 1967
1 Jan 1967
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b. Child survivor. All cost of living increases are built into the
annuity benefit formula. The fixed dollar factors in the formula
are increased in all cases by the total percentage increase
granted under the adjustment plan. The formula factor dealing
with the percentage of five year average salary is increased in
deceased retiree cases by the total percentage of increase the
retiree was receiving at time of death.
1. For example, the total percentage increase in force under
P. L. 89-205 is 10. 2 percent so that the dollar fixed factors
$1, 800, $600, $2, 160, and $720 are increased to $1, 983. 60,
$661.20, $2, 380. 32 and $793.44.
2. However, the average salary factor is raised only by the per-
cent of cost-of-living increase allowed the deceased retiree
while he was receiving an annuity. (See I and II above for
specific percentages.)
The difference in b. 1. and b. 2. above is that average salary reflects
living cost pay increments to the point of retirement whereas the
fixed dollar factor does not.
IV.. Summary
For annuities commencing* Increase in force
1. a. before 1 January 1966
6. 1%.
b. before 1 January 1966
10.2%
2. on or between 1 Jan 66- 1 Jan 67
3.9%
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INSERT FOR PROPOSED COST-OF-LIVING ADJUSTMENT AMENDMENT
This insert is necessary to offset annuity increases payable
1 April 1967 under existing law which may become effective prior to
enactment of the proposed cost-of-living adjustment amendment.
The following subsection should be inserted as Subsection 291(a)(2)
and the present 291(a)(2) will become 291(a)(3).
"SEC. 291. (a) ...
(2) Those annuities increased by the cost-of-living
provisions of the Central Intelligence Agency Retirement
Act of 1964 for Certain Employees prior to the enactment
of this amendment shall be adjusted to reflect the percentage
increase under subsection (1)."
or:
"SEC. 291. (a) ...
(1) ...
(2) The annuities increased by subsection (1) shall be
decreased by the amount of any increases granted pursuant to
Sec. 291 of the Central Intelligence Agency Retirement Act
of 1964 for Certain Employees prior to enactment of this
amendment.
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