RETIREMENT AND DISABILITY SYSTEM FOR CERTAIN EMPLOYEES OF THE CENTRAL INTELLIGENCE AGENCY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75B00380R000700150001-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 26
• Document Creation Date: December 19, 2016
• Document Release Date: August 11, 2006
• Sequence Number: 1
• Publication Date: September 21, 1964
• Content Type: REPORT

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f'
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Calendar No. 1526
88TH CONGRESS 1 SENATE c REPORT
?d Session No. 1589
RETIREMENT AND DISABILITY SYSTEM FOR CERTAIN
EMPLOYEES OF THE CENTRAL INTELLIGENCE
AGENCY
Mr. STENNIS, from the Committee on Armed Services,
submitted the following
REPORT
The Committee on Armed Services, to whom was referred the bill
(H.R. 8427) to provide for the establishment and maintenance of a
Central Intelligence Agency retirement and disability system for a
limited number of employees, and for other purposes, having con-
sidered the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
AMENDMENT
The bill is amended by striking all after the enacting clause and
substituting new language.
The changes contained in the committee substitute version are
explained in detail under the heading of this report entitled "Com-
mittee Changes in House Bill." Except for technical revisions, the
effect of the committee changes is to conform the proposed retirement
system more closely to civil service retirement provisions, rather than
the provisions of the Foreign Service Act, with which the House
version was paralleled.
The purpose of the proposed legislation is to provide an improved
retirement system for certain employees of the Central Intelligence
Agency.
;UCDF
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NEED FOR THE LEGISLATION
All employees of the Central Intelligence Agency are now covered
under the normal civil service provisions for retirement purpcses.
Normally, employees covered under the civil service retirement rules
can contemplate active employment until age 62 when they are
entitled to immediate retired pay, or may elect to voluntarily retire
at age 55 with 30 years of service with a reduction of 5 percent in
retired pay, or at age 60 with 30 years service with no reduction.
With respect to Central Intelligence Agency employees engaged in
conducting and supporting intelligence activities abroad, it has been
the experience of the Agency that because of the conditions of serv-
ice, not all of these employees can anticipate serving the period of
time required in orderlto retire under the civil service retirement pro-
visions. A special retirement system. is therefore needed in order for
some of these employees to retire at an earlier age and with a less
severe financial penalty than the present civil service system imposes.
The precedents for this type of legislation may be found in the pro-
visions now applicable to certain personnel of the Federal Bureau of
Investigation and other Federal investigative and criminal detection
activities, and the separate provisions now applicable to Foreign
Service officers. The. premise underlying this bill, as well as the
foregoing provisions, is a need for encouraging and in some cases
directing retirement a;t ages earlier than those contemplated by the
normal civil service employee.
The bill, in effect, will meet two objectives: (1) It will minimize
the adverse effect of the early retirement on the individuals for whom
the Agency is unable to provide full term careers, and (2) it will serve
as a management tool for attracting high caliber personnel to meet
the specialized needs of this program. The bill will offer a more
liberal basis for retirement for those who will be separated before
completing a normal full career of at least 30 years of service.
Limitation on number of employees to be covered
It should be emphasized that the legislation intends that only a
limited number of the employees of the Central Intelligence Agency
may be covered at any one time under this system, the Agency
estimates that approximately 30 percent of the total number of
With respect to the proportion of people within the Agency who
between July 1 1969, and June 30, 1974.___ This limitation
employees may be retired under the terms of this act between
to as participants would be entitled to the benefits of the system.
Government employment. Only these persons hereafter referred
security requirements as to be clearly distinguishable from normal
duties are determined by him to be in support of Agency activities
,hovered under this system would designate only those whose
will be covered under the terms of this act. Only those employees
engaged in conducting and supporting intelligence activities abroad
thl.l be covered. The. bill implements this limitation in two ways:
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? Agency employees would qualify for coverage under the proposed
system.
Within the limitations prescribed by the bill the Director will.
designate those employees who will be covered under the system by
virtue of their having initially met the requirements for coverage.
The Agency will review their records at intervals of not more than 5
years in order to determine if there should be continued coverage for
the individuals under the system.
The bill, in order to provide a degree of protection for the individual
involved, provides that any person who has at least 15 years with
the Agency and whose career is adjudged by the Director at that
time to be qualified for coverage under this system may elect to
remain under the system, and furthermore, his coverage under this
retirement program will not be subject to further review by the
Director.
Change in retirement computation
The bill would provide that participants would have their retirement
pay computed on the basis of 2 percent of the average salary of the
highest 5 consecutive years. This will be multiplied by the number of
creditable years of service not to exceed 35 years. The maximum
amount of retired pay, therefore, would be 70 percent of the highest
5-year average.
Under the normal civil service formula, the first 5-year period is
based on 1% percent of the average of the highest salary for 5 con-
secutive years; the next 5 years on 1 % percent of this average; with
the remaining service over 10 years at 2 percent. Under civil service
provisions, retired pay may not exceed 80 percent of the average on
which retired pay is based.
Voluntary retirement at age 50 without penalty
The bill would permit participants beginning at age 50, upon
application and with the consent of the Director, to voluntarily
retire if they have completed a total of 20 years of service, including at
least 10 years with the Central Intelligence Agency and a minimum
of 5 years of qualifying service. Normally, it is expected that all
creditable service would be in the nature of qualifying service. In
certain cases, however, participants may have completed prior
military service, or service in some other Government agency. Within
the Agency, except for periods of rotation, most of the service would
be of a qualifying nature; that is, duties involved in the conducting
and supporting of intelligence activities abroad.
The employees whose applications for voluntary retirement are
approved would be retired without the financial penalty applicable to
civil service retirement under age 60. All civil service retirements
under age 60 incur a reduction in retired pay: 1 percent in retired pay
for each year under age 60 to age 55; 2 percent in retired pay for each
year below age 55. As an example, at age 50 retired pay would be
reduced by 15 percent.
With respect to the right to voluntarily submit a retirement applica-
tion under the civil service system, voluntary retirement is possible
only upon attainment of age 55 with 30 years of service. Retirement
below age 55 is permitted only if the separation is involuntary;
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STATINTL 4 RETIREMENT AND DISABILITY SYSTEM FOR CIA
Mandatory retirement at age 50 and above-no penalty
The bill provides that the Director in his discretion may mandatorily
retire participants who are at least 50 years of age and have completed
the same service required for voluntary retirement; that is, 20 years
of total service, of which 10 years must be with the Agency and 5 years
must be qualifying. The participant would be retired on the same
basis as those who voluntarily retire; that is, their retired pay would be
based on 2 percent of the average of the highest salary for 5 consecutive
years, multiplied by the years of creditable service not to exceed 35
years.
Mandatory retirement for those with at least 25 years of service
The bill provides that the Director may involuntarily retire in his
discretion participants who have completed a total of 25 years of
service without regard to age, provided the person has completed at
least 10 years of service with the Agency, of which at least 5 years are
qualifying service. The retired pay of the participant would be with-
out penalty and would be based on 2 percent of the average salary of
the highest 5 consecutive years.
Mandatory retirement based on age
The bill provides that any participant will be mandatorily retired,
or separated, as the case may be, upon reaching age 65, if he is in the
grade of GS-18 or above. All participants below GS-18 would be
retired or separated at age 60. In both categories the Director would
have the authority to extend the service for a period not to exceed 5
years. Retirement benefits for those retired under these provisions
would be based on the 2-percent formula not to exceed 35 years of
service.
It might be noted. that this authority is of limited significance,
since Central Intelligence Agency employees do not enjoy the tenure
of appointment of normal civil service employees. It does, however,
specify an age at which they would be removed by law, unless tha
Director were either to mandatorily retire them before reaching this
age, or extend them under the discretionary authority beyond these
particular ages.
Disability retirement system
The bill contains authority for those participants who become dis-
abled or incapacitated to be retired under certain conditions. The
provisions of the bill; are similar to those authorized for disability
retirements under the civil service system, with the exception that
the retired pay of such a person would be based on the 2-percent
formula of retired pay, rather than the civil service formula provid-
ing for less than 2 percent for the first 10 years of creditable service.
Under both systems, 'that provided in this bill and the civil service
system, a person retired for physical disability is guaranteed, at age 40
or below, a minimum of 40 percent of the average salary for his highest
5 years, with additional pay being based on such creditable service as
earned by the individual. If a person is past age 40, constructive
service of 20 years is authorized, but in no case will it exceed the
difference between the participant's actual age and age 60.
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RETIREMENT AND DISABILITY SYSTEM FOR CIA 5
OTHER FEATURES OF THE BILL
The bill contains a number of other features relating, among other
things, to-
(1) The establishment and administration of the retirement
fund;
(2) The matter of deferred annuities for the individual par-
ticipant;
(3) Annuities for widows and children;
(4) The payment of interest by both the Government and
individual where required by law; and
(5) Provision for increases in retired pay subsequent to retire-
ment where there have been increases in the cost of living.
A detailed explanation of these changes is contained in that part
of the report setting forth an analysis of each provision of the bill.
COST DATA
With respect to the retirement and disability fund which is estab-
lished in the bill, it is anticipated that over the next 432 years, through
June 30, 1969, the total expenditures from this retirement fund would
be approximately $4 million, which, on an annual basis, would average
about $900,000 per year.
It should also be noted that in terms of additional costs, that is,
the additional retirement cost which this bill causes, there will be
expended an estimated $660,000 over the next 432-year period, or
about $132,000 on an annual basis. This additional cost is deter-
mined by computing the excess of what this bill would cost as coin-
pared to the cost on the basis of expenditures of retiring the persons
involved under the normal civil service rules.
MANNER IN WHICH THE PROPOSED SYSTEM WILL BE ADMINSTERED
The Agency has indicated that the following policies will be observed
in the administration of the retirement program.
The only employees who will be covered under the terms of this
bill will be those who are engaged in conducting and supporting
intelligence activities abroad. It is estimated that not more than
30 percent of the Agency's employees will be designated as participants.
Administrative mechanism .
The Agency's Director of Personnel will be responsible for the
general administration of the retirement system. However, a Central
Intelligence Agency Retirement Board of senior Agency officials will
be appointed to assist and advise him in carrying out this
responsibility.
Agency employees will have the right to appeal determinations
regarding their eligibility for coverage under the system and their
entitlement to its benefits. Such appeals will be submitted is writing
to the Agency's Inspector General who will make independent in-
vestigation and recommendation to the Director of Central Intel-
ligence.
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6 RETIREMENT AND DISABILITY SYSTEM FOR CIA
election standards
To qualify as a participant in this system, an employee must meet
ach of the following specific criteria:
(a) He must be at least 25 years old and successfully complete a
-year probationary period in the Agency.
(b) He must sign a written undertaking obligating him to serve
anywhere and at ally time according to the Agency's needs.
(c) He must be assigned to a career field which requires him to
perform duties (1) in support of A ~?ency activities abroad hazardous
to life or health, or (2) ;so specialized because of security requirements
as to be clearly distinguishable from normal Government employment.
(d) He must when initially covered into the system already have
actually performed qualifvin, duty as described in paragraph (c)
above or be under official orders to ~do so.
itial designation of participants
_J(a) Employees on duty at date of enactment.-----The records of all
career employees on duty and serving in it career field which would
iorn.Zally require the perforniance of qualifying duties as described
ftbove will be reviewed to determine in each case whether the selection
standards are met. Only those employees who meet these criteria
and who have actually performed substantial periods of qualifying
duty will be designated as participants.
(b) After (late of enactment.-Current employees not designated as
participants and new employees will continue to be covered under
the civil service retirement system. In the case of new einployeesor
current employees who have not completed their probationary periods;
their records and the plans for their future utilization and development
will be reviewed when they have done so to determine whether they
meet the selection standards. The records of those employees who
are assigned to an appropriate career field but, who have not been
designated as participants will again be reviewed after a reasonable
period of time to determine whether they then meet the selection
1taudards.
eriodic review q f (leterniination
The eligibility of an employee to remain a par+ici
ant in the s
te
p
ya
iii
VIll be reviewed at inteirvals, no less often than i fears, to determine
ghat h
till
h
e s
Ineel s t
e criteria and tht h i atllfi
aescuay perormng
easonable minilnum periods of qualifying duty throughout his service.
f such review shows that he no longer qualifies for covera
e und
g
er
le system, he will be tiansferred back to the civil service retirement
stem. When a participant has completed 15 years of Agency
rviee
nd i
d
t
i
d
a
s
e
erm
ne
at that time to cti tt thii
onnueo meee crtera, .is record will not again be subject to such review.
COMMITTEE CHANGES IN HOUSE Bna,
The following is a stpniarv of the changes made by the Senate
Committee on Armed Services to the House version of the bill. The
committee version--
(1) Changes the date:of the act from 1963 to 1964.
(2) Inserted a definition not contained in,the House version for the
term "qualifying service," which is defined as service performed as a
participant in the system or, in the case of service lfrior to designation,
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service determined by the Director to have been performed in carrying
out duties described in section 203.
(3) Amended the definition of "child" to include a full-time student
up to age 21, as defined in the civil service provisions.
(4) Inserted language to provide for a termination of widows'
annuities upon remarriage.
(5) Increased the widows' annuities from 50 to 55 percent of
participant's annuity, conforming with civil service provisions.
(6) Conformed the reduction in the employee's annuity for survivor
benefits purposes to the civil service rules establishing a reduction of
23Z percent for the first $3,600 (rather than $2,400 as contained in the
House bill) and 10 percent of the balance over $3,600.
(7) Revised the disability retirement provisions so as to establish
age 60 as the cutoff for constructive service credit, in conformance
with the civil service provisions, thereby eliminating the House
provision which permitted age 65 as the cutoff for constructive
credit for grades GS-18 and above,
(8) For the purpose of widows' annuities based on death in service
or on death of an annuitant receiving disability retired pay, adopted
language which requires widows' annuities to be computed only on
the earned annuity of the participant, thereby eliminating the min-
imum guaranteed constructive service of 20 years as provided in the
House bill.
(9) With respect to voluntary retirement, adopted language pro-
viding that of the 20 required years, at least 10 must be with the
Agency and 5 years be within the term "qualifying service."
(10) With respect to deferred annuities, adopted language providing
that th.s annuity would begin at age 62, rather than age 60 as provided
in the House bill. Further language was inserted requiring at least 5
years with the Agency, rather than 5 years of total creditable service in
order to be eligible for a deferred annuity at age 62.
(11) Deleted language providing for a lump-sure payment for em-
ployees separated in grade GS-13 and below under which such persons
would have been entitled to receive 1 month's pay for each year of
service to a maximum of 1 year's pay for all past service,
(12) Deleted language which would have permitted the Director to
mandatorily retire participants in the grade of GS-14 and above with
10 years of service in the Agency, of which 5 years would be qualifying.
(13) Adopted language authorizing the Director to mandatorily
retire participants who either have completed 25 years of service or
who have reached age 50 and have completed 2.0 years of service, all
of whom must have also completed 10 years in the Agency and 5 years
of qualifying service.
(14) Adopted a provision not contained in the House bill establish-
ing a limit of 400 on all retirements, except disability, during the period
between the date of enactment of the act and ending June 30, 1969,
and a limit of 400 during the period beginning July 1, 1969, and ending
June 30, 1974.
(15) Adopted language conforming to civil service rules relating to
the payment of interest either by the participant or by the Agency as
required by law.
(16) With respect to the exclusion of crediting military service
where there is entitlement to social security, adopted language con-
forming to civil service provisions.
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8 RETIREMJNT AND DISABILITY SYSTEM FOR CIA
(17) Adopted language conforming to civil service rules for crediting
a participant with service for retirement purposes while on military
leave.
(1S) Deleted language which would permit annuitants reemployed
in the Federal service to retain so much of the Agency annuity in
addition to the Federal salary as would not exceed his salary at the
time of retirement. '. The effect of the deletion is to conform to the
present civil service !rule offsetting the retired pay where the person is
reemployed in the Federal Government.
(19) Adopted new language authorizing increases in the retired pay
of annuitants based on the identical system now in effect for retired
civil service employees providing for periodic increases in retired pay
based on minimum 3 percent advances in the Consumer Price Index.
TITLE I-TITLE AND DEFINITIONS
PART A-TITLE
Section 101.--This section provides that the act may be cited as
`Central Intelligence Agency Retirement Act of 1964 for Certain
employees."
Section Ill.-This section contains three definitions which apply
henever used in the act. The term "Agency" means the Central
ntelligence Agency; the term "Director" means the Director of
entral Intelligence; the. term "qualifying service" means service
erformed as a participant in this retirement system. In the case of
efers to service performed in carrying out duties performed in the past
ITLE II-THE CENTRAL INTELLIGENCE AGENCY RETIREMENT
AND DISABILITY SYSTEM
PART A-ESTABLISHMENT OF SYSTEM
Section 201(a). Aathbrity of Director to prescribe rules and regulations
or the Retirement Systehis subsection authorizes the Director to
prescrihe rules and regulations for the maintenance of the retirement
ystern which will apply to a limited number of employees. It is
urther provided that these rules and regulations will become effective
,ormnittees on Armed 'Services of the House of Representatives and
he Senate.
Section 201 (b). Administration of system.-This subsection provides
bat the Director shall administer the system in accordance with such
ules and regulations and with the principles established by this act.
his, subsection provides that any determinations authorized by this
ct will be final and conclusive and not subject to review by any court.
his authority is contained in the bill because of the security classifica-
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tion of foreign intelligence activities of the United States and of the
information concerning the service of Agency employees. The facts
pertinent to these determinations would ordinarily be of such a nature
that they could not be publicly disclosed. Legislative precedent for
this provision is contained in the Civil Service Retirement Act which
provides in section 16(c) that determinations by the Commission of
questions of dependency and disability under that act are not review-
able. Other precedents are contained in the Atomic Energy Act which
provides that where restricted data are involved determinations of the
Commission will not be subject to judicial review and in the Foreign
Claims Settlement Act of 1949. (See 42 U.S.C. 2231 and 22 U.S.C.
Section 202. Establishment and maintenance of fund.-This sectio
provides that a fund will be created for the new retirement systen
and it shall be maintained by the Director. It should also be observe
that section 261 of the bill provides for estimates for annual appropri
ations for the fund and, in addition, requires actuarial evaluation
of the fund at intervals of 5 years, and more often if deemed necessar
by the Director. Moreover, in section 262, authority is provide
whereby the Director, with the approval of the Secretary of th
Treasury, may invest portions of the fund in interest-bearing securi
ties of the United States.
Section 203. Participants.-This section sets forth the legislativ
standards for determining the employees of the Central Intelligent
ized by the bill. This legislation is intended to cover only a limite
number of the Agency employees. The determination as to whit
employees would participate in this system would be made only by th
ticipant in the system, the employee must be involved in Agency
duties abroad hazardous to life or health, or be involved in specialize
duties which because of security requirements are clearly distinguish
able from normal Government employment. It is contemplated tha
the overwhelming portion of participants in this system will be in
volved in duties outside the United States. This section also con
twins the language which provides that for participating employee
whose career the Director adjudges to be qualifying for this syste.i
after 15 years of service may elect to remain as participants withou
.further review or approval by the Director.
The standards laid down by this section emphasize the fact the
this retirement system is authorized only for Central Intelligence
Agency employees whose careers are predominantly concerned witl
the conduct and support of intelligence activities in foreign countries
The fact that this retirement system. will cover only a portion of the
Central Intelligence Agency employees is underscored by the limita
tion contained in section. 236 of. the bill, which provides that al
retirements under this legislation, except for disability, will be limite~
to not more than 400 during the 5-year period between the enactmen
of the bill and June 30, 1969.
Annuitants
Section 204(a). Coverage of term "annuitants."-This section pro
vides that annuitants shall be all participants who are receivin~
annuities from the fund, including the surviving wives and husbands
S. Rep.t. 1589, 88-2.-----
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(1) "Widow" meaning the surviving wife of a participant who
was married to the participant at least 2 years preceding death
or is the mother of children by marriage to the participant.
(2) "Dependent widower" meaning the surviving husband who
was married at least 2 years immediately preceding the death of
the participant, or is the father of children by marriage to her.
In addition, h6 must be incapable of his self-support for reasons
of mental or physical disability and must have received more
than one-half of his support from the participant.
(3) The tern} "child" has been defined as the same as set forth
in the Civil Service Retirement Act, which includes generally an
unmarried child under l8 or, in the case of a child between ages
18 and 21, who;is a full-time student.
widows, children, and others who shall become entitled to annuities
in accordance with' the provisions of the act.
Section 204(b). 1Jqinition of certain terms.-This subsection defines
i11c following terms for the purposes of the act:
annuity reduced by 2)2' percent, up to $3,600, plus 10 percent for any
amount over $3,600. The annuity payable to the surviving wife or
husband after the participant's death will be 55 percent of the par-
ticipant's annuity. Such an annuity would terminate on the death
or remarriage of the surviving wife or husband.
etired participants.-This subsection sets forth the authority under
hich a retired participant may elect to receive a lesser amount of
retired pay in order to provide an annuity for the surviving spouse.
his section provides that a participant may, if he elects, provide for
an annuity for his surviving spouse by having the participant's
ears. The maximum, therefore, which a participant could receive
Would be 70 percent of his highest 5-year average salary.
section provides for the method of computing the retired pay for
persons who retire under the system established in the bill. The
annuity provided is that the retired participant will receive 2 percent
of his average basic salary for the highest 5 consecutive years, multi-
plied by the number of creditable years of service not to exceed 35
contributed to the fund for the payment of benefits to the retirement
system. In addition, it is provided that there shall be contributed
to the fund from the appropriation used for the payment of the
participant's salary a sum equal to the amount of the contribution.
These two amounts will be deposited by the Agency to the credit of
the fund.
. ,S`ection 211(b). Co7npulsory nature of deduction.-This subsection
provides that each participant shall be deemed to consent and agree
to. the 6;2-percent contribution which will be deducted from his basic
salary.
PART C-COMPUTATION OF ANNUITIES
This section establishes the rate of annuities payable to participants
and to specified beneficiaries under the retirement system.
rzrrbs that 632 percent of the basic salary of each participant shall be
ection 21.1(a). Salary deduction of 632 percent.-This subsection pro-
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RETIREMENT AND DISABILITY SYSTEM FOR CIA 11
Section 221 (c) (1). Additional annuity for surviving children.-Thi.
-subsection provides that where an annuitant dies and in addition to hi
e
--
and
o h
s
..--
-- ----
b
u
`surV1V1118 W11e
behalf of each child the smallest of the following amounts: 40 percent
of the annuitant's average basic salary; $600; or $1,800 divided by th
number of children.
Annuities where only children survive.-This sub
2
221
) .
(c) (
Section
t where an annuitant dies and is survived by
th
id
a
es
section prov
neither a wife nor a husband, but by children, each child shall be pai
an annuity in an amount equal to the smallest of: 50 percent of th
annuitant's basic salary divided by the number of children; $720; o
n
d b
.
y U11G nui-
$2,160 divide
termination of annuities in case of death.-Thi
R
d
21
d
e
e
(
).
Section 2
subsection provides for a recomputation of the annuities of remainin hi
. - 1. _ a
hit 7 h
d not survived t
c
a
-
----------__,
Caluiren as UuVLL6 1 U,. - ..~-~,
participant in cases where either the surviving wife or husband dies o
the annuity of n u1111-
thod of payment for children's annuities.-Thi
M
21
2
e
(e).
,
Section
subsection provides for the method of payment and termination
ndo ac
hild
en u
.
annuities for c
Section 221(f ). Authority for survivor benefits for unmarried particl
ants ma
ti
i
d
p
par
c
pant.-This subsection provides that unmarrie
i l i
rd
r t
rovide. an annuity for
o
e
o p
in e s
l
e
---- ----
person paving an in-la
il Service Retirement Act. The annuity of t1il
Ci
h
v
e
set forth in t
participant would be reduced in the following manner in order to
provide a survivorship annuity. It would be reduced: (1) by 10
percent; and (2) by an additional 5 percent for each 5 full years the
person designated is younger than the participant, but the total re-
duction will not exceed 40 percent. The annuity of the survivor
designated would be 55 percent of the reduced annuity of the
participant.
PART D- -BENEFITS ACCRUING TO CERTAIN PARTICIPANTS
r disability or incapacity-Medical examination-Recovery
t f
i
o
remen
Ret
Section 231 (a). Retirement for disability.-This subsection provide
that after 5 years of credit toward retirement, excluding military o
naval service, any participant who becomes totally disabled n epc tnr
o a
i
njury, up
r
of disease, Illness, or
may be retired. The retired pay would be, computed on the basis o
the annuity earned as of the time of retirement for disability. Ir
effect, it would be based on 2 percent of the "highest 5-,year" averag
salary multiplied by the number of years of creditable service corn
pleted as of the time of retirement. This subsection contains a furthei
t is under age 60 and had corn
it
an
provision that if the disabled annu
pleted less than 20 years of service, his annuity will be computed on
the assumption that he had completed 20 years. There is the further
proviso, however, that the additional constructive service will in no
case exceed the difference between the participant's age at the time of
retirement and age 60. For instance, if a participant became disabled
at age 55 and had completed only 14 years of creditable service, his
total service under this provision would be 19 years : 14 plus 5, the
,difference between his actual age and age 60.
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12 RETIREMENT AND DISABILITY SYSTEM FOR CIA
Section ,281(b). Authority for medical examination.-'T'his subsection
provides that i.n eacai disability case the participant will be examined
by one or more quzilified physicians designated by the Director and
the disability shall be determined by the Director on the basis of such
medical advice. Furthermore, unless the disability is permanent,
there shall be annual medical examinations until the annuitant reaches
the statutory retirement age for his grade which as elsewhere in the
Will would be age 60 for those below GS-18 and age 65 for those in the
grade of GS-18 or, above. This subsection further provides for
reinstatement where. the annuitant has recovered to the extent he can
return to duty. Payment of the annuity in cases of recovery will
continue until 6 months after the date of examination showing recovery
or until the date of reinstatement in the agency, whichever is earlier.
Section 2 31 (c). Retirement status of recovered disability annuitant.-
is subsection provides that where a recovered disability annuitant
whose annuity is discontinued is not reinstated in the Agency he will
e considered to have been separated as if he were a deferred annuitant,
that is, one who is separated from the Agency but leaves his contribu-
tion in the fund with the right to receive an annuity computed on his
earned service at age 62.
Section 231 (d). Exclusion of disability annuity where compensation is
awarded under the Federal Employees Compensation Act.-This sub-
ection provides that there will be no annuity under the terms of this
et for compensation or injury where there is compensation awarded to
he participant under the Federal Employees Compensation Act cover-
ng the same period of time. This restriction does not bar the right
f election to receive either an annuity under the terms of this act or
he benefits under the Federal Employees Compensation Act.
,Section ,231(e) . Right to receive disability annuity plus lump-sum
ward of compensation under Federal Employees Compensation Act.-
Phis subsection provides that the right to receive an annuity will not
e affected because it person has received a lump-sum payment award
nder the Federal Employees Compensation Act. It is further pro-
ided, however, that there will be refunds of the lump-sum compensa-
ion to the Department of Labor where the compensation has been
aid for any period extending beyond the date the annuity becomes
ffective.
oath in service
Section 232(a). Disposition of contributions where no annuity is
aable.-This subsection provides that where a participant dies in
ervice and no annuity is payable, his contributions with interest
ill be refunded in the order of precedence provided in section 241(b)
f the act.
Section 232(b). Annuity for widow of participant.-This subsection
rdvides that where a'participant has at least 5 years of credit toward
tirement, excluding military or naval service, and dies before sepa-
tion or retirement, his widow will be entitled to an annuity equal to
percent of the earned annuity of the participant. It is further
ovided that this annuity will terminate upon death or remarriage
of the widow. Dependent widowers are also covered for the purpose
.of the annuity under this subsection with the further proviso that the
annuity to the dependent widower ceases upon his becoming capable
of self-support.
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RETIREMENT AND DISABILITY SYSTEM FOR CIA 1e3
Section 252(c). Annuity for children of participants.-This subsec-
tion provides that where the participant, in addition to being survived
by a wife, is also survived by children, such children shall be entitled
to an annuity computed in accordance with section 221(c) (1) of this
act and such annuity or annuities will begin and terminate in
accordance with section 221(e) of the act.
Section ,232(d). Annuity for children where no parent survives.-This
subsection provides for an annuity for children where there is no
surviving parent. In cases where a participant dies in service having
met the minimum 5 years of qualifying service for purposes of survivor
rights, the children's annuities would be computed in accordance with
section 221 (c) (2) of the act.
Voluntary retirement
Section 233.-This section provides that any participant in the new
retirement system, upon reaching 50 years of age, and having complete
20 years of service, may upon his application and with the consent o
the Director, be retired from the Agency and receive an annuity
based on the 2-percent formula discussed elsewhere in this report
It is further required that of the 20 years of service, 10 years mus
have been with the Agency, with at least 5 years being qualifying
service.
Discontinued service benefits
Section 234(a). Deferred annuity benefits for participants separate
from Agency after 5 years.-This subsection, in effect, provides tha
participants who have completed 5 years of service with the Agent
and are separated may elect to leave their retirement contributions i
the fund and thereby become qualified to receive an annuity at age 62
based on his annuity credit earned while with the Agency. Thi
language conforms to existing civil service provisions.
Section 231f(b). Return of contributions for participants who di
before reaching age 62.-This subsection provides in the case of partici
pants who were separated from the Agency and who have elected t
have their contributions remain in the fund for the purpose of re
ceiving an annuity at age 62, and who die before reaching age 62
there will be a return of their contributions with interest in accordant
with the order of precedence contained in section 241.
Mandatory retirement
Section 235(a). Mandatory retirement based on length of service.
This subsection would authorize the Director in his discretion t
retire a participant who either has completed 25 years of service o
who is at least 50 years of age and has completed 20 years of service
provided that all such participants will have completed at least 1
years of service with the Agency, of which at least 5 years must hav
been qualifying.
Section 235(b). Mandatory retiremend based on age.-This subsectio
provides that all participants in the retirement system in the grad
of GS-18 and above will be automatically retired or separated fro
the Agency, as the case maybe, upon reaching age 65. All participan
below the grade of GS-18 will be automatically retired or separated
upon reaching age 60. In all cases, however, the Director may extend
the service of a participant for a period not to exceed 5 years.
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14 RETIREMENT AND( DISABILITY SYSTEM FOR CIA
Limitation on number of retirements
-Section 236.-This section provides that all retirements under the
provisions of the bill, except those for disability, may not exceed a
total of 400 betweel the date of enactment of the act and June 30,
1969, and may not exceed a total of 400 during the 5-year period,
beginning July 1, 1969, and ending June 30, 1974.
PART E-DISPOSITION OF CONTRIBUTIONS AND INTEREST IN EXCESS OF
BENEFITS RECEIVED
Section 241(a). Return of contributions with interest for partici
ants
p
yneligible for any annuity.'-The subsection provides that whenever
either an immediate' annuity or a deferred annuity, his contributions
to the fund will be returned with interest at the rates set forth foe
refunds under the civil service system.
his subsection provides that in the event the total contributions of a
retired participant exceed the total amount returned to him or claimed
through him in the form of annuities, there will be a return of the
excess contributions over the amount of the accumulated annuity
payments to certain designated beneficiaries described in this
ubsection.
PART F-PERIOD OF SERVICE FOR ANNUITIES
Computation of length; of service
Section 251. Periods of .separation for retirement purposes--This
. ection provides that the service of a participant will be computed
from the date he is ;designated a participant, but further, that all
periods of separation' will be excluded along with any leaves of absence
thout pay exceeding 6 months, except for leaves of absence granted
participants while on' active military or naval service and exce
t for
p
leaves of absence while receiving benefits under the Federal Employees
Compensation Act.
Prior service credit
Section 252 (a). Credit for prior service in Federal Government civilian
, military.-This subsection provides that a participant in the
tirement system may include in his period of Federal service:
(1) Civilian service in the executive, judicial, and legislative
branches of the Federal Government and in the District of
Columbia government, prior to becoming a participant; and
(2) Active and honorable military or naval service in the Army,
Navy, Air Force; Marine Corps, or Coast Guard of the United
States prior to the date of the separation upon which title to
annuity is based.'
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RETIREMENT AND DISABIL]TY SYSTEM FOR CIA
Section 252(b). Necessity for contributions for past service.- Thi
subsection provides, in effect, that any participant who has made n
contribution into another Government fund may receive his prio
civilian credit by making a special contribution to the fund based o
the percentage of his annual salary for the years involved, togethe
with the.payment of interest as specified in certain tables containe
in the Civil Service Retirement Act.
Section 252(c) (1). Transfer of previous contributions.-This subsec
tion provides that where a participant who has been under some othe
government retirement system becomes a participant by direct transfe
his contributions to that system will be transferred to the new Contra
Intelligence Agency Retirement Fund. It is expected by the coin
mittee that in the interest of maintaining the integrity of the fund th
matching employer contributions will likewise be transferred.
Section 252(c) (2). No duplication of contributions.-This subseetio
contains explicit languace to avoid any requirement for the duplica
tion of contributions where the participant contributed under anothe
government retirement system during periods of past service an
where such contributions have been transferred to the new fund.
Section 252(c) (8). Exclusion in case of refund of contributions.-Thi
subsection provides that periods of past service will not be creditabl
where there has been either a refund of the contributions or where n
contributions were made to the other government retirement fun
Special contribution would be required to obtain credit for prio
service.
Section 252(d). Exclusion of credit for prior service where such servic
is creditable under another Government retirement system for civilia
personnel.-This subsection excludes, the crediting of prior civilia
service for the Central Intelligence Agency retirement system wher
any period of this service either is being used or will be used fo
entitlement to an annuity under any other retirement system coverin
Government personnel.
Section 252(e). Exclusion of simultaneous credit under military an
Agency retirement systems.-This subsection provides, in effect, tha
except for retirement under the so-called reserve retirement law co
tained in chapter 67, title 10, United States Code, and retiremen
based on a service-connected disability incurred in combat or cause
by an instrumentality of war, periods of service used for militar,
retired pay will not be included as creditable periods of service unde
the system contained in this bill.
Section 252(j). Exclusion of military service used for entitlement t
social security benefits.-This subsection, conforming to the civ
service provisions, provides, in effect, that military service for th
purpose of the retirement system contained in this bill will not b
creditable where performed after December 31, 1956, if the militar
service could be used for entitlement to social security benefits.
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l7'redit for service while on military leave
Section 258.-This section provides that during periods of emer-
kncy, participants who leave the Central Intelligence Agency for the
)urp6se of entering military service will not be considered as separated
rom the Agency b y reason of military service unless they ask for and
receive a refund of their contributions. Furthermore, contributions
Ill not be required covering periods of absence from the Agency while
erforming active military or naval service.
+'stimate of appropriations needed
Section 261.-This section provides that the Director shall prepare
he estimates of the annual appropriations required to be made to the
mid, and shall cause to be made actuarial valuations of the fund at
ntervals of 5 years, or oftener if deemed necessary by him.
Fnvestment of money in the fund
Section 262.--This section provides that the Director may, with the
pproval of the Secretary of the Treasury, invest from time to time in
nterest-bearing securities of the United States such portions of the
ent of annuities, cash benefits, refunds, and allowances, and the
come derived from such investments shall constitute a part of such
und.
ttach,ment of moneys
Section 263.-This section provides that none of the moneys men-
[ioned in this act shall be assignable either in law or equity, or be sub-
ect to execution, levy, attachment, garnishment, or other legal process.
POINTED IN THE AGENCY, OR REEMPLOYED IN THE GOVERNMENT
Section 271(a). Authority for recall.-This subsection provides that
she Director may, with the consent of any retired participant, recall
such participant to duty in the Agency whenever lie shall determine
such recall is in the public interest.
Section 271(b). Entitlement to full salary upon recall.--This subsee-
ion provides that a participant recalled to duty will be entitled to
he full salary of his grade in lieu of his annuity and that during the
eriods of employment he shall contribute to the fund and when he
everts to a retired status have his annuity recomputed.
eemployment
Section 272. Retired status no bar to Federal employment.-This see-
[Ion provides that a retired participant shall not be barred from em-
ployment in the Federal Government by virtue of his retired status.
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RETIREMENT AND DISABILITY SYSTEM FOR CIA 17
Reemployment compensation
Section 273(a). Deduction of annuity from salary.-This subsection
provides that where an annuitant is reemployed in the Federal Gov-
ernment he shall be entitled to the annuity payable under this act,
but there shall be deducted from his salary a sum equal to the annuity)
provision is to require an annuitant to offset his retired pay during
1 Section 273(b). Method of collecting overpayments.-This subsection
provides where there is overpayment under the reemployment pro
visions such overpayment will be recovered by withholding the amount
involved either from the salary of the annuitant or from any other
moneys, including his annuity payable under this act.
PART I-VOLUNTARY CONTRIBUTIONS
Section 281 (a). Method of making voluntary contributions.-This sub-
section provides that any participant at his option may voluntarily
make additional contributions toward his retirement in multiples o
1 percent, not to exceed 10 percent of his basic salary, together wit
interest compounded annually at 3 percent. This subsection furthe
provides that the contributions as of the date of retirement of th
participant, and at his election, may be either returned to in in
lump sum, or used to purchase additional life annuities as specific
Section 281(b). Actuarial equivalent benefits.-This subsection pro
281 (a) (2) (3) and (4) shall be actuarially equivalent in value to th
payment provided for under the lump-sum provision contained i
Section 281(c) . Refund of voluntary contributions.-This subsectio
provides for the refund of the additional deposits with interest whey
the participant becomes separated from the Agency for any reason
except retirement on an annuity.
Section 281 (d). Additional benefits provided by additional deposits.
This subsection provides that any benefits payable to a participant o
his beneficiary by virtue of the additional voluntary deposits shall b
in addition to the benefits otherwise provided under this act.
PART J-COST-OF-LIVING ADJUSTMENT OF ANNUITIES
Section 291. Required retired pay adjustment based on increases i
the cost of living.-This section and the various subsections contai
language similar to that now in effect for annuitants retired under th
their beneficiaries will beu entitled to an increase in their annuitie4
whenever the cost of living advances annually at least 3 percent, as
measured by the Consumer Price Index. These increases would be
based on determinations made by the Civil Service Commission pur-
suant to section 18 of the Civil Service Act. In effect, if the price
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18 RETIREMENT AND DISABILITY SYSTEM FOR CIA
index rises at least 3 percent from January 1964 to January 1965,
annuitants or their beneficiaries, effective April 1, 1966, will be entitled
to a percentage increase: equal to the percentage increase in the price
index adjusted to the nearest one-tenth of 1 percent. This review
will be repeated annually.
COMPARATIVE ANALYSIS OF BILL
The analysis hereinafter printed sets forth the pertinent provisions
of the bill, together with the comparative provisions contained in
the Civil Service Retirement Act and the Foreign Service retirement
system.
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Comparison of pertinent provisions of civil service retirement, Foreign Service retirement, and H.R. 8427, CIA retirement and disability system,
as amended by the Senate Armed Services Committee
B. Contributions:
Government employees generally, unless
temporary, intermittent or subject to
another Federal retirement system.
Agency career personnel are
currently covered by civil
service.
All FSO's plus non-FSO's who have
served as chiefs of mission for an aggre-
gate period of 20 years or more; Foreign
Service stalf officers and employees with
10 or more years of continuous service
in the Foreign Service.
Proposed CIA retirement
system (CIAR)
Those officers and employees
whose duties are (i) in
support of Agency activ-
ities abroad hazardous to
life or health or (ii) so
specialized because of secu-
rity requirements as to be
clearly distinguishable
from normal Government
employment and who are
designated participants.
1. Compulsory--------
C. Benefits:
63 percent of employee's basic salary.
Agency contribution of 63 percent of
employee's basic salary.
Maximum 10 percent of total basic salary
received since Aug. 1, 1920. Payable in
multiples of $25.
6% percent of employee's basic salary.
Agency contribution of 6% percent of
employee's basic salary.
Maximum of 10 percent of total basic
salary received since July 1, 1939. Pay-
able in multiples of 1 percent.
1. Annuitants--------
Annuity of 1% percent of high-5 average
years salary times 5 years. Plus 1 per-
cent times next 5 years. Plus 2 per-
cent times all years over 10 years of
creditable service. Annuity not to
exceed 80 percent of high-5 average
salary.
Annuity, 2 percent high-5 average years
salary times total number years credit-
able service not to exceed 35 years.
-----do-----------------------
2. Penalty reduction
for age.
342 of 1 percent for each of the 1st 60 months
under age 60 and .t for each additional
month over 60 months under age 60.
Reduced annuity with benefits to widow
or widower. Corresponding benefits to
each dependent child.
Surviving children, widowers, and de-
pendent widowers may be included as
survivor annuitants.
---- do-----------------------
Same as CSR---------------
FSR and CIAR are approxi-
mately same as CSR.
CIAR and FSR have a 2-
percent formula. CSR
provides maximum 80 per-
cent high-5 average.
CIAR and FSR provides
maximum 70 percent high-5
average.
Under CSR there. is a sub-
stantial reduction in an-
nuity for years under age
60. 15 percent when retir-
ing at age 50. There is no
reduction under FSR or
CIAR.
All 3 systems have compa-
rable survivorship benefits.
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Comparison of pertinent provisions of civil service retirement, Foreign Service retirement, and H.R. 8427, CIA retirement and disability system,
as amended by the Senate Armed Services Committee-Continued
0. Benefits-Continued
4. Survivor annuities:
(a) Married
partici-
pants.
i Civil service retirement system (CSR)
Basic general formula: Widow or widower
(if survivor annuity elected by retiring
employee): 55 percent of all or whatever
portion of earned annuity specified as
base. Annuity terminates on death or
remarriage.
Reduction for survivor annuity: Em-
ployee's annuity reduced by 2;h percent
of 1st $3,600 of any amount specified as
base for survivor benefits plus 10 percent
of the amount over $3,600 up to the full
amount of employee's annuity.
Children:
With a surviving wife or husband:
smallest of (1) 40 percent of average
salary divided by number of chil-
dren, (2) $600; or (3) $1,800 divided
by number of children.
With no surviving wife or husband:
smallest of (1) % average salary
divided by number of children; (2)
$720; or (8) $2,160 divided by num-
ber of children.
Termination annuity:
Children annuities terminate at age
18 (or on recovery from incapacity
after 18), marriage, or death. On
termination of any child's annuity
by death wife or husband's annuity
by death , annuities of surviving
children are recomputed as though
p arson whose annuity was termi-
Basic general formula: Widow or widower
(if survivor annuity elected by retiring
employee): 3l of all or whatever portion
of earned annuity specified as base.
Annuity terminates only on death of
widow or widower.
Reduction for survivor annuity: Em-
ployee's annuity reduced by 23ri percent
of lst $2,400 or any amount specified as
base for survivor benefits plus 10 percent
of the amount over $2,400 up to the full
amount of employee's annuity.
Children:
With a surviving wife or husband:
smallest of (1) 40 percent of average
salary divided by number of chil-
dren; (2) $600; or (3) $1,800 divided
by number of children.
With no surviving wife or husband:
smallest of (1) 34 average salary
divided by number of children; (2)
$720; or (3) $2,160 divided by num-
ber of children.
Termination annuity:
Children annuities terminate at age
18 (or on recovery from incapacity
after 18), marriage, or death. On
termination of any child's annuity
by death, wife or husband's annuity
by death, annuities of surviving
children are recomputed as though
person whose annuity was termi-
Proposed CIA retirement
system (CIAR)
CSR and CIAR differ from
FSR in that the fatter pro-
vides that the annuity of
surviving widow and wid-
ower terminates only on
death of such survivor.
Under CSR and CIAR re.
marriage of the _ survivor
also terminates the an-
nuity. CIAR and CSR
provide for 55-percent an-
nuity for widows and
dependent widowers. FSR
provides for 50 percent in
such cases.
1962 amendment to the CSR
Act increased from $2,400
to $3,600 the amount from
which 234 percent is taken
in reducing the employee's
annuity.
All 3 systems are the same.
Do.
Do.
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(b) Unmarried
partici-
pant.
5. Death in service:
(a) Wid0w-
widower.
(c) Former
employee
or former
partici-
pant eli-
gible for
deferred
annuity
who dies
before
reaching
eligibility
age.
nated had not survived deceased
employee.
The annuity of an unmarried child
between 1S and 21 years of age who
is a student pursuing a regular full-
time course of study or training in
residence in a high school, trade
school, college, or university con-
tinues until the age of 21.
Any person in whom annuitant has in-
surable interest (if survivorship and
reduced annuity.elected): 55 percent of
participant's reduced annuity. Retir-
ing employee's annuity is reduced 10
to 40 percent depending on difference
between his age and age of person desig-
nated to receive survivor annuity.
Survivor annuity terminates on death
of survivor.
Widow or dependent widower: 55 per-
cent of participant's earned annuity
until hwid widower remarriage self-
Support.
Children:
With a surviving wife or husband:
smallest of (1) 40 percent average
salary divided by number of chil-
dren; (2) $600; or (3) $1,800 divided
by number of children.
With no surviving wife or husband:
smallest of (1) % average salary
divided by number of children; (2)
$720; or (3) $2,160 divided by the
number of children.
If the former employee had not received
a refund after his separation from Gov-
ernment service, the amount he paid
into the civil service retirement fund,
plus any accrued interest would be pay-
able immediately after death.
nated had not survived deceased
employee.
No comparable provision--------------
Designated beneficiary: 50 percent of par- ----- do-----------------------
ticipant's reduced annuity. Retiring
employee's annuity is reduced 10 to 40
percent depending on difference between
his age and age of person designated to
receive survivor annuity. Survivor's
annuity terminates on death of survivor.
Widow or dependent widower: 50 percent ---- do --- -------------------
of participant's earned annuity payable
until death of surviving dependent
widower or until dependent widower
becomes capable of self-support. How-
ever, annuity is computed as if partici-
pant had 20 years of service or by pro-
jection to mandatory retirement age for
his class.
Children:
With a surviving wife or husband: ---- do---------------------
smallest of (1) 40 percent of average
salary divided by number of chil-
dren; (2) $600; or (3) $1,800 divided
by number of children.
With no surviving wife or husband: ----- do.__-------------------
smallest of (1) % average salary
divided by number of children; (2)
$720; or "limber (3) $2,160 divided by the
If a Foreign Service officer who separated ----- do ---------------------
from class 4 or 5 and who has elected to
receive retirement benefits dies before
reaching the age of 60, his death shall be
considered a death in the Service.
This provision was added to
C5R in 1962 amendments
to the CSR Act.
Foreign Service does not re-
qu rethat designated bene-
ficiary have an insurable
interest. FSR designated
beneficiary annuity is 50
percent.
FSR survivor annuity is 50
percent but provides for
continuation of widow's
annuity until death and
allows the survivor to re-
ceive annuity based on at
least 20 years of service.
FSR provides payment of
"death in Service" bene-
fits.
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Comparison of pertinent provisions of civil as service amended by the Senate Foreign ed Service Committee? retirement and H.R. 8427, CIA retirement and disability system,
Services
4.7
Items Civil service retirement system (CSR) Foreign Service retirement system (FSR)
C. Benefits-Continued
6. Disability retire- After 5 years of civilian service: same as
ment. fyrll age and serviee b ar~6t. Guaranteed
4 percent of high-5 average salary or
annuity projected to age 60 whichever is
Elective survivor benefits are based on
employee's actual years of service credit.
Tax exemption: Under the Federal in-
come tax "sick pay" exclusion, up to
$100 per week of disability annuity is
exempted until annuitant attains retire-
ment age.
years of creditable ser i i l d
v
ce
nc
u
-
ing 5 years of civilian service. (2)
Regardless of age if employee has
completed 25 years of creditable serv-
ice, including 5 years of civilian
service.
Deferred annuity payable at age 62 if sep-
arated
l
Deferred annuity payable at age 60 if sep-
Deferred annuit
bl
emp
oyee has 5 years of civilian
i
d
arated employee has 5 years of civilian
y paya
e
at age 62 if
d
t
serv
ce cre
it.
service credit.
separa
e
em-
ployee has 5 years of serv-
ice with the Agency.
8. Voluntary retire-
At age 60 with 30 years of service or at 62
ment without
with 5 years of service
At age 60 with 20 years of
reduction in an-
.
service provided 10 years
nuity.
service with the Agency,
at least 5 of which shall
have been qualifying serv-
ii. Selection out/dis- A. Immediate annuity upon involuntar
A
Cl
I
lee.
y
continued serv-
separation if employee meets either
ice retirement
of the f
ll
i
.
asses 1, 2, or 3: retirement on annuity
coin uted o 1
p n regu ar percent for-
Im mediate annuity upon
involuntar
se
arati
if
.
o
ow
ng requirements: (1) at-
tainm
t
f
mula. Age no factor.
y
p
on
employee meets eith
f
en
o
age 50 and completion of
20
It. Classes 4, 5, 6, or 7; (1) separation pay-
er o
the following require-
After 5 years of civilian service; same as
full age and service benefit. Guaranteed
40 percent of high-5 average salary or
annuity projected to mandatory retire-
ment age for his class.
Elective survivor benefits are based on
service credit upon which pparticipant's
annuitywescomputed- ratherthan his
actual years of service credit.
Tax exemption: Entire disability annuity
is exempted from Federal income tax.
ment of 34s of a year's salary rate for
each year of service and proportion-
ately for a fraction of a year, but not
exceeding a total of 1 year's salary
payable without interest in lump
sum or 3 equal installments; (2) plus
refund of contributions or deferred
annuity. An immediate annuity
if age 50 with 20 years service.
Proposed CIA retirement Comments
system (CIAR)
ment5
of
age0s: (1)andatcomptainmletenion t of
20 Years of service includ-
ing 10 years of service with
the Agency of which at
least 5 shall have been
qualifying service; (2) re-
has doss ofe d femeaoyce
creditable service.
All 3 systems are essentially
the same.
If FSR annuity to employee
p _beea.hasedAm project.
ing service, survivor annu-
ity is computed on that
basis rather than the lesser
actual service period.
FSR Permits full exemption
of disability annuity from
Federal income tax. Pro-
vision for limited exemp.
tion under CSR depends
on sick pay exclusion of the
Internal Revenue Code.
FSR deferred annuity begins
2 years earlier than CSR
and CIAR. CIAR re.
quires 5 years of Agency
civilian service.
FSR and LIAR permit vol-
untary retirement without
reduction in annuity 10
years earlier than CSR.
FSR authorizes immediate
annuity regardless of age
for FS class 1 to 3 and also
provides for separation
co
nsati om p 7. CSR and CIAR
have no provisions that are
comparable.
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 Approved For Release 2006/08/14: CIA-RDP75B0038OR000700150001-2
10. Disposition of con-
tributions in ex-
cess of benefits
received.
D. Creditable service:
1. Leave without pay_
2. District of Colum-
bia employment.
3. Transfer of funds---
B. At employee's option, refund of con-
tributions or deferred annuity if
does not meet the above,require-
ments.
If deceased individual's contributions are
not returned in the form of annuity (to
individual or his survivors), the unre-
turned contributions must be paid to a
designated beneficiary; or in order of
precedence to widow, children, parents,
etc.
Includes leave of absence without pay
granted during covered employment
while performing active honorable mili-
tary service:
Includes leave of absence without pay
granted during covered employ-
ment while receiving FEC benefits.
Includes civilian employment with Dis-
trict of Columbia government.
No provision------------------------------
If deceased individual's contributions are
not returned in the form of annuity (to
individual or his survivors), the unre-
turned contributions must be paid to a
designated beneficiary; or in order of
precedence to widow, children, parents,
etc.
Includes leave of absence without pay
granted during covered employment
while performing active honorable mili-
tary service:
Includes leave of absence granted dur-
ing covered employment while re-
ceiving FEC benefits.
Includes civilian employment with Dis-
trict of Columbia government.
Provides for direct transfer to FSR fund
of all regular contributions (with inter-
est) made by officer or employee to
other Government retirement system
under which previously covered. Funds
transfer discharges other system of all
benefit obligations based on service
involved.
At employee's option refund
of contribution or deferred
annuity if he does not
meet the above require-
ments.
Same as CSR--_
All 3 systems are the same.
Do.
Do.
FSR and CIAR permit di-
rect transfer of funds from
CSR upon becoming a
participant.
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 Approved For Release 2006/08/14: CIA-RDP75B0038OR000700150001-2
Comparison of pertinent provisions of civil service retirement, Foreign Service retirement, and H.R. 8427, CIA retirement and disability system, LISD
as amended by the Senate Armed Services Committee-Continued
E. Reemployment of annu-
itants.
(2) If the reemployment is not subject
to the retirement act, his annuity
payments will continue without
interruption but his salary dur-
ing reemployment will be re-
duced by the amount of annuity
he receives. If-
(a) the annuitant's retire-
ment was based on a voluntary
separation or on an involun-
tary separation for cause,
(b) the annuitant was re-
tired for age,
(c) he was a disability annu-
itant reemployed after reach-
ing age 60, or
(d) he was a disability annu-
itant found recovered or re-
stored to earning capacity and
temporarily reemployed be-
fore reaching age 60, his
annuity will continue but his
salary during reemployment
will be reduced by the amount
o&annuity he receives. If this
reemployment was of a year or
more duration the reemployed
If retirement is based on involuntary
separation (except for age retirement)
which was not due to any fault of his
own, when reemployed the person's
annuity will be either discontinued or
withheld from salary.
(1) If the reemployment is subject to
-,,,,_ the ret~rement_act, his_ annuity
will be discontinued from the
date he is reemployed and his
future retirement rights will
depend on the law in effect at
the time he is separated from the
reemployment.
A reemployed annuitant may receive the
salary of the position to which he is
appointed plus so much of his annuity
which when combined with the salary
does not exceed the salary which such
person was entitled to receive in the
Foreign Service on the date of his retire-
ment. _S uch_reemploymenl,_ oe . _not
affect the annuity earned under the
Foreign Service retirement and disa-
bility system, if during the period of
!reemployment he is employed under
'another Federal retirement system; he
will contribute to the other system, and
it is possible to qualify for benefits under
the other system.
Proposed CIA retirement
system (LIAR)
FSR provides for retention of
Federal salary and annuity
up to the level of the prior
Foreign Service pay.
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 Approved For Release 2006/08/14: CIA-RDP75B00380R000700150001-2
F. Cost-of-living adjustment
of annuities
annuitant would be eligible
for a supplemental annuity.
(Reemployment service un-
der,,anotber retirement system
for Federal or ;District of Co-
lumbia Government employ-
ees and service in a few particu-
lar positions-the President
and certain U.S, judges are not
qualified for this purpose.)
Basic annuities (not to include additional
annuities purchased at retirement by
voluntary contributions) are tied to
Department of Labor statistics concern-
ing cost of living and shall be increased
in future years whenever the cost of
living exceeds a 3-percent rise.
FSR has not yet been up-
dated to provide for cost-
of-living increase in an-
nuities.
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 Approved For Release 2006/08/14: CIA-RDP75B0038OR000700150001-2
DEPARTMENTAL DATA
Set forth below is a letter from the Acting Director of the Central
Intelligence Agency transmitting proposed legislation for improving
the retirement system for certain employees of the Central Intelli-
gence Agency.
CENTRAL INTELLIGENCE AGENCY,
Hon. LYNDON B. JOHNSON,
President of the Senat ,
Washington, D.C.
OFFICE OF THE DIRECTOR,
Washington, D.C., March 15, 1968.
DEAR VIR. JOHNSON: This letter transmits for the consideration
of the Congress proposed amendments to the Central Intelligence
Agency Act of 1949, as amended. The principal purpose of the pro-
posed bill is to permit the Agency to improve its retirement program
by authorizing the establishment of a retirement system corresponding
to that of the Foreign !Service. It should be noted that it will become
necessary for appropriations to be obtained since the contributions
of employees covered by the retirement system and the Agency's
matching contributions will not be sufficient to cover the full cost
of retirement payment benefits to be paid out. Although such
appropriations may not be needed to finance cash disbursements
for some years, it is expected that such appropriations will be sought
after that time when actuarial valuations have been made.
Other provisions of the proposed bill would bring existing provisions
of law in the field of travel expenses and oversea allowances into con-
formity with those available to the Foreign Service. Certain other
provisions are included in the proposed bill to accomplish purposes
which we believe necessary.
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 had advised that
there is no objection to the presentation of the proposed bill to the
Congress from the standpoint of the administration's program.
Faithfully yours,
MARSHALL S. CARTER,
Lieutenant General, U.S. Army, Acting Director.
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