MEMORANDUM FOR, DIRECTOR OF PERSONNEL FROM JOHN F. BLAKE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00498A000500160016-2
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 28
• Document Creation Date: December 9, 2016
• Document Release Date: July 21, 2000
• Sequence Number: 16
• Publication Date: May 4, 1976
• Content Type: MF

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DD/A, 76-2248
4 May 19 7 6
MEMORANDUM FOR: Director of Personnel
John F. Blake
Deputy Director for Administration
Fred:
1. While I realize much work has gone into the
proposed reply from the Director to the Management Advisory
Group ('tAG) on the matter of CIARDS, I nevertheless must
return it for a rewrite.
2. A man who does not like to read long papers
does not like to sign long papers -- and the Director does
not like long papers. Secondly there is, on a cool and
objective reading, a tone of defensiveness in part of this
paper which is not in keeping with the spirit of the
dialogue. There is also some degree of repetition as found
in the last part of paragraph 2, subparagraphs 3.a.(2) and
(3), maybe part of paragraph 5, etc. I next observe para-
graph 6, starting at the bottom of page 5 ,and running for
all of pages 6, 7, and the majority of page 8, which
addresses Itself, not to CIARDS specifically, but an answer
to the question of whether or not we take care of our own.
While I agree with everything that is said, it has to e
said in more concise terms. Lastly, the Director is not
going to sign a piece of paper that says in paragraph 7
that if the MAC has any other ideas, send them to the
Director of Personnel. There is an inference here, undoubtedly
not meant, that says don't write me but write somebody else.
S. Please undertake a much shorter version, a little
less defensive, and certainly summarizing in much shorter
space, the matter pertaining to benefits as opposed to CIARDS.
F. Male
Attachment (DDA 76-2214)
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1 - DDA Chrono w/o Atts 1 - ,J}B, Chrono wjo Atts _
DD/A:JFB1ake:der (4 May 1976)
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MEMORANDUM FOR: Director of Central Intelligence
FROM : John F. Blake
Deputy Director for Administration
SUBJECT : Reply to the Management Advisory Group
REFERENCE : Memo dtd 30 Mar 76 to the Director from
The Management Advisory Group; subject:
The CIA Retirement and Disability System
1. On 30 March 1976 the Management Advisory Group
prepared a memorandum recommending several far-reaching
changes to the CIA Retirement and Disability System (CIARDS).
This memorandum raises both interesting and serious questions
which the Office of Personnel has analyzed in detail.
2. A response which has been prepared by the Office
of Personnel is attached.
3. It is suggested that you sign the memorandum which
responds to reference.
John F. Blake
Attachment
,-Z-- DDA 506jee_f Originator:
1 - ER
1 - DDCI
Distribution:
Orig - Adse
1 - D/Pers
1 - DD/Pers/SP
2 - C/RAD (1 w/held)
DD/Pers/SP :gec (29 Apr 76)
MAY 7,979
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17 MAY 1916
MEMORIVOI M FOR.* The Management Advisory Group
FROM George Bush
Director
SUBJECT : The CIA Retirement and Disability
System (CIARDS)
1. This is in reply to your memorandum of 30 March
1976 on the same subject. In that memorandum you recom-
mended that I approve action to propose legislation to
amend CIARDS on four counts.
2. 1 am in full sympathy with the view that CIARDS
benefits should keep pace with those afforded other U. S.
Government employees in similar lines of work. In this
connection a comparison of benefits with the Department
of State Foreign Service Retirement System would, have
been more meaningful since CIARDS was designed primarily
for Agency employees serving in support of overseas
operations. Nevertheless, as I notified you earlier,
have had the Deputy Director for Administration and
his Staff study your proposals. A copy of his report
is attached hereto. Based on the points he offered,
must conclude that it would not now be in the interes
of the Agency to propose the legislation you recommend.
3. There is the additional concern that to propose
now the liberalized retirement benefits discussed in your
paper could actually be counterproductive. Perhaps you
now that we have submitted to the Congress proposed
amendments to CIARDS which would pick up various, amend-
ments alread enacted to the Civil Service Retirement
Act; e.g., the second spouse legislation. Unexpectedly,
we have run into serious difficulty and are now exerting
every effort to obtain what is merely conforming: legis-
lation. Based on this recent experience and the current
Congressional attitude aimed at reducing U. S. Govern-
mental pension liability, both for civilians and the
military, there is little question that now is not the
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time to seek liberalization of retirement benefits, however
strongly we might feel that such improvements may be desir-
able or even necessary. For the moment, therefore, I
believe we should concentrate on securing enactment of
our pending legislation and defer for some more appropriate
time consideration of the liberalization you have recom-
mended.
4. Please note the description of the Agency's
benefit programs presented in paragraph 5 of the attached.
if you believe additions, modifications or improvements
in these programs can be made, I would welcome any such
ideas.
5. I want to compliment you on your thoughtful
paper and assure you I recognize the considerable effort
necessary for its preparation.
George Bush
Attachment
Distribution:
0 - Addressee
1 - DCI
1 - DDCI
1 - ER
,2 - DDA
1 - D/Pers
1 - DD/Pers/SP
2 - C/RAD (1 w/held)
Originator:
M. h
Director of Personnel
s,r `';fit-
evise (26 Apr
TATINTL R Revised. DD Pers/SP gec (29 Apr 12 May 76)
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qNT'Y
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REPORT TO THE MANAGEMENT ADVISORY GROUP
ON THE CENTRAL INTELLIGENCE AGENCY RETIREMENT
AND DISABILITY SYSTEM (CIARDS)
1. The material which follows is a commentary on the
memorandum of 30 March 1976 from the Management Advisory
Group (MAC) to the Director and an analysis of the recom-
mendation that the Director propose legislation to amend
the CIA Retirement and Disability System (CIARDS) on four
counts.
2. With respect to the specific recommendations:
a. Higher Annuity Benefits -
(1) Government employees in the special cate-
gories covered by higher benefits (i.e., law enforcement
officers, firefighters, etc.) must complete at least 20
years of service in those specialties in order to receive
the better benefits of higher annuity formula and lower
retirement age. Those categories of personnel. do not
receive those better benefits just for 20 years of Gov-
ernment se.rvice.
(2) By contrast, a person may qualify for the
benefits of CIARDS upon attaining age 50 with a combi-
nation of only five years of "qualifying service"
(usually overseas duty), 10 years of Agency service
and 20 years of total service. Bear in mind, too, that
a participant in CIARDS pays into the retirement fund
no more than the ordinary Federal civilian employees
contribute, 70, while members of Congress pay 8% and
law enforcement officers and firefighters pay 7-1/2%.
(3) We should have to expect, therefore, that
if we were to ask Congress for a higher annuity formula,
CIARDS participants would be required to pay more than
7% in contributions to the retirement fund and, of con-
siderably more importance, be required to put in many
more years of qualifying service than just five in
order to vest for the higher benefits.
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h. Lowering Mandatory Age -
(1) It is assumed that the MAG recommendation
that the mandatory retirement age in CIARDS be lowered
from 60 to 56 is based on the application of P.L. 92-297
to air traffic controllers in the Civil Service System.
The Congress decided that 20 years' performance in such
a specialty should qualify a person for retirement at
an earlier age. The law, however, does not permit
retirement under the special formulas for this group
for just 20 years of Government service.
(2) Based on Agency experience, there appears
to be no demonstrated need for reducing the mandatory
retirement age in CIARDS to age 56. Mandatory retire-
ment age in CIARDS was set at age 60 (down 10 years
from normal Federal employment) and is consistent with
the concept of "early" retirement. Apart from an
earlier mandatory retirement date, the age for volun-
tary retirement was also lowered considerably from
that for the normal Federal service.
(3) During the years CIARDS has been in
operation, II employees have retired under its
provisions. these, only 0 retired at the manda-
tory age. The average age of persons retiring under
CIARDS shows a steady decline from 55.1 in FY-67 to
51.8 in FY-75 (we do not have figures readily avail-
able for FY-66 and FY-65). Clearly, CIARDS has
contributed mightily to the Agency interest of
keeping its cadre of "certain" employees young and
dynamic.
c. Death Gratuity -
The State Department/USIA Authorization Act,
Fiscal Year 1975, P.L. 93-475, contained a provision
authorizing the Secretary of State to pay gratuity
to the surviving dependents of any Foreign Service
employee who dies as a result of injuries sustained.
in performance of duty outside the United States.
This gratuity is an amount equal to the year's salary
of the employee at the time of death. There has been
a continuing interest on the part of the Agency in
this legislation and every effort was made to extend
its provisions to Agency employees. An 0GC opinion
in May 1975 (0GC 75-1809) indicated, however, that
the provisions of the law could not be adopted by
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the Director of Central Intelligence. Since that time
the Agency has had as one of its objectives the intro-
duction and passage of legislation to provide similar
death gratuity benefits for dependents of Agency
employees who die overseas in the performance of duty.
It has not been possible as yet to introduce this
provision along with other legislative needs of the
Agency. The Director of Personnel is, therefore,
proposing that death gratuity legislation be initiated
as a. separate issue. We are convinced this is the
proper course to pursue rather than attempting to
obtain legislation patterned after P.L. 91-509 that
provides death gratuities to the survivors of prima-
rily law enforcement officers in the D. C. area who
are killed in the line of duty. As in the case of
retirement benefits, our case would be far stronger
if we argue before Congress that our need for this
benefit compares identically with the Department of
State.
d. Increasing Maximum Annuity -
A large segment of the rationale for CIARDS
was premised on the need for a system for early
retirement. A reduced mandatory age was one means
of achieving this and another was reducing the
maximum possible annuity from 800 to 70%. It would
appear noticeably inconsistent to request authorities
for early retirement and then to request authority
as you propose to increase the maximum possible
annuity.
3. Within the Civil Service System, certain groups
have been covered by special benefits (special formulas and
lower retirement ages) in recognition of the special hazards
they must encounter for at least 20 years, not five years,
and for which they make higher contributions to the retire-
ment fund. CIARDS must stand on its own feet and justify
its benefits from its own experience. It would be unwise
to seek greater benefits merely on the grounds that various
other occupations have received higher benefits. We must
look to our own rationale, and when we do so, we do not
find that CIARDS has fallen to an unfavorable position.
The only valid comparison that can be made with CIARDS is
the Foreign Service Retirement System. Both systems were
designed primarily for personnel serving overseas. In the
major area of benefits, both systems match well, and. in the
fringe benefit area CIARDS has more of the general Civil
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UNMY
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Service System benefits. In addition, the House Committee
on the Armed Services is now considering H.R. 11088 which
proposes 17 amendments for CIARDS to further conform with
the general benefits of the Civil Service System..
4. The MAG memorandum did not touch on a factor that
is critical in all Government retirement systems today:
financing the benefits. One of the 17 amendments now being
proposed for CIARDS calls for the infusion of appropriated
funds; without such authorization CIARDS cannot meet its
schedule of future benefits. (Government retirement systems
are financed by a combination of contributions from partic-
ipants and appropriated funds.) To obtain the benefits
recommended by MAG would require a major study of the means
by which these could be financed.
5. In the supporting papers the following statement
was made: "Our employees have often heard that CIA takes
care of its own. The facts do not bear this out, at least
in the area of benefits." Against the possibility that
MAG may not be aware of the scope of our present benefit
programs, the following is offered:
a. The Office of Personnel administers a compre-
hensive benefits program which has been developed to
meet the needs of all CIA employees in such important
and diverse matters as insurance, compensation, awards,
club and recreational activities, public services and
casualty assistance.
b. A complete insurance program of health, life
and special purpose insurance is offered. Our own
health insurance elan has an enrollment of anproxi- STATINTL
mately
c. The unique nature of many Agency assignments
coupled with interest in individual employees has
resulted in our giving careful attention and. profes-
sional assistance in submitting employee compensation
claims under the Federal Employees' Compensation Act.
Employees serving overseas receive a substantial bene-
fit through the Agency's Medical Program for Employees
and. Dependents Abroad. Approximately $400,000 a year
is expended on the overseas program alone.
d. Incentive awards provide both motivation and
reward for Agency employees. The Agency has a com-
mendable record in President Ford's Special Program
for Cost Reduction within the Federal Government.
Thus far 33 Agency employees have qualified for
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special recognition with total savings in excess of
two million dollars. Honor and Merit Awards also
provides a significant means to recognize accomplish-
ments. The medals and certificates themselves and
the ceremonies conducted by the most senior officials
of the Agency are examples of the interest the Agency
has in its employees.
e. The Employee Activity Association offers a
large variety of clubs, instructional classes, and
athletic, social and cultural activities. An exer-
cise room and track are also offered for those who
are interested in physical fitness, and, in addition,
the FAA Store offers a wide variety of quality mer-
chandise at reasonable prices.
E. The Public Service Aid Society renders
assistance to employees who have exhausted other
means of self help. Through the Educational Aid
Fund, the sons and daughters of employees may be
considered for help toward their plans for further
education. A blood donor program has been arranged
with the Fairfax County Red Cross and our partici-
pation in this worthwhile program has benefited many
employees because of the blood replacement it pro-
vides. The Agency is one of the largest and most
consistent Bloodmobile participants in this area.
g. One activity that sums up the concern and
interest of the Agency in its employees is the
Casualty Assistance Program. Upon notification of
the death of an employee the Office of Personnel
works closely with other components to arrange
appropriate notification of survivors and renders
as much assistance as possible. Personnel Officers
contact the survivors as soon as proper under the
circumstances and in most every instance by personal
visit. These representatives advise the survivors
.of all benefits to which they are entitled and obtain
any necessary signatures on applications for benefits.
h. Employees involved in an emergency or in any
situation affecting Agency security are urged to seek
advice and assistance from the Security Duty Office
by calling 351-6161 at any time of the day or night.
The assistance provided over the years in a variety of
situations has proved to be of the utmost importance
to employees and members of their families.
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 . a i hh h s ~B ~ n1 :i 1 DSO M
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MEMORANDUM FOR: Director of Central Intelligence
FROM The Management Advisory Group
SUBJECT The Central Intelligence Agency Retirement and Disability System
(CIARDS)
1. There is an immediate need to introduce legislation to equalize CIARDS
benefits with those accorded other federal employees engaged in activities con-
sidered as difficult and hazardous as intelligence work.
2. CIARDS was enacted in 1964 and was designed to permit the CIA to retire
approximately 30 percent of its employees who, because of the nature of their
work, suffer from physical and mental exhaustion at a relatively early age or,
because their skills are not applicable to other fields, become occupationally
surplus. In passing this legislation, Congress specifically recognized the need
for a young and vigorous group of employees to carry out the mission of the CIA
and considered this program to be a means of ensuring the availability of fresh
new talent. The law provides an annual annuity computation rate of 2 percent for
each year of government service up to a maximum of 70 percent. There is no re-
duction for age under 55 years for those who retire either voluntarily or in-
voluntarily under CIARDS. Mandatory retirement is at age 60.
3. At the request of a number of Agency employees, the MAG undertook a
comparative study of CIARDS benefits relative to the special retirement benefits
granted other federal employees. This review shows that the CIARDS benefits
have not kept pace with those of other systems. MAG recommends that you approve
action to propose legislation to amend CIARDS as follows:
A. Change the annuity computation rate from its present 2 percent to
2 1/2 percent for all years of Agency service and 2 percent for military
and all other government service.
B. Reduce the maximum retirement age from 60 to 56 years of age or
20 years of government service, whichever is later. DCI authority to
grant exceptions through age 60 would be limited to cases involving
special needs of the Agency.
C. Provide a lump-sum payment of $50,000 to the survivor of an
employee killed in the line of duty.
D. Amend the maximum annuity authorized from 70 percent to 80 percent.
4. Since CIA employees are prohibited from being represented by unions
or associations, it is incumbent on Agency management to introduce legislation
on behalf of its employees. Many employees suffer undue hardship, personal
inconveniences and suffering in serving CIA. We should ensure they receive all
the benefits they are entitled to.
Attachments:
Ithe anagemen visooup
Comparative Study of Special Retirement Systems
Legislative History of Special Retirement Benefits
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it,Gi s y
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Comparative Study of Special Retirement Systems
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It took some 18 years for certain CIA employees who served in
hazardous assignments and/or positions of unusual mental, emotional and/or
physical stress, to be granted the benefits accorded members of the Foreign
Service.
When the CIA Retirement Act for Certain Employees was enacted in 1964,
Congress recognized that CIA employees serve under conditions at least as
difficult as, and frequently more onerous and dangerous than, the conditions
that led to improved retirement benefits for the Foreign Service and certain
personnel. of the FBI and other law enforcement agencies. Like members of the
military services, CIA employees are obligated to serve anywhere in the world
according to the needs of the Agency. Congress recognized that CIA employees
perform hazardous and specialized overseas duties in the conduct and support
of intelligence activities. They further recognized that overseas CIA work
produces "physical difficulties" and "motivational exhaustion" which virtually
terminate the usefulness to CIA of certain employees.
The CIA requires younger and more vigorous officers than generally re-
.quired in government service. Congress, during its hearings, indicated that
it was impressed with the need for a young service by urging the Agency to
encourage, and in some cases direct, early retirement. In addition, they
noted that "the dynamic nature of intelligence work produces sudden and some-
times radical shifts in the types of personnel required and in their deploy-
ment," making some employees "occupationally surplus." It is increasingly
difficult for former CIA employees to find new employment because their skills
are not always applicable to other fields and because employers are hesitant
to hire former intelligence officers. This has never been more apparent than
with today's image of the CIA employee.
PL 93-350 was passed in 1974 in recognition that it was not economically
feasible for a. federal law enforcement official or firefighter to retire in
his early fifties at the 2 percent annuity computation rate then in force.
At the same time that the law increased the annuity rate to 2. 1/2 percent, it.
reduced the maximum retirement age to 55 years or 20 years of service, which-
ever came later. Some of the agencies employees who were initially identified
for this increased rate include: FBI (8,600 employees); Bureau of Prisons
(5,000); Immigration and Naturalization (2,400); Marshals (800); DEA (800);
ONI (5,000); Postal Inspectors (1,800); IRS (4,500); Customs (2,600); and
Secret Service (1,200).
PL 91-509, passed in 1970, provides the most liberal retirement benefits
granted to any government employee to date. It calls for a 2 1/2 percent rate
for the first 20 years of service and 3 percent for all years over 20. It
also is based on the salary at time of retirement. A most important feature
of the act is a $50,000 lump-sum payment to the survivor of an individual
killed in the line of duty. These benefits cover members of the Metropolitan
Police, U.S. Park Police, Executive Protective Service, D.C. Fire Department
and certain members of the Secret Service.
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Liberalized retirement benefits had not been limited to the Foreign
Service and law enforcement employees prior to the enactment of the CIA
ac.t. Since 1948, Members of Congress and, subsequent to that time, Congres-
sional. employees have been entitled to greater computation rates. In 1964,
Architect of the Capitol personnel and in 1966, Botanic Garden employees
were covered under the Congressional retirement program. The annuity is
based upon 2 1/2 percent for each year of service as a Member of Congress or
Congressional employee; for up to 5 years of military service (for which one
is not receiving retirement pay); and, in the case of a Member of Congress,
for military service performed while on leave of absence during a war or
national emergency. If the total service calculated at 2 1/2 percent does
not equal 10 years, then those years of additional government service not
calculated at 2 1/2 percent are calculated at 1 3/4 percent, not to exceed
a combined total of 10 years. All other service in excess of the combined
10 years of service is calculated at a 2 percent rate. The annuity for a
Member of Congress may not exceed 80 percent of his final. salary. A Congres-
sional employee's annuity may not exceed 80 percent of his high-three average
salary.
Special recognition should be taken of the benefits accorded air traffic
controllers in 1972. Because of the stresses associated with that work,
mandatory retirement is at age 56. An employee who is voluntarily or involun-
tarily separated after completing 25 years of service as an air traffic con-
troller or after becoming 50 years of age with 20 years of service is entitled
to an annuity no less than 50 percent of his average pay. In addition, the
air traffic controller career program provides for up to 2 years of full-time
training for those controllers with at least 5 years of service who are,
because of physical and/or emotional stress, unable to continue to perform as
controllers. They continue to draw their full salary and are entitled to any
increase in rate of basic pay provided by law. They are excluded from staffing
limitations. If after 2 years they are not assigned other duties, they may be
released for transfer to another federal agency, or involuntarily separated.
Approximately 700 controllers annually are participating in this career training
program out of a total complement of 14,000 employees.
The benefits cited above are not meant to be all encompassing, but rather
to highlight liberalized benefits extended to other federal employees. If
one can assume that in 1964, certain CIA employees warranted special recognition,
then CIA employees' benefits should also be liberalized to keep pace with these
other systems.
Executive Order 11491 of October 29, 1969 amended the government-wide
plan for labor--management relations established in 1962. However, the CIA
and FBI are specifically excluded from participating in labor-management
relations. Subsequently, the U.S. Foreign Service (State, AID, and USIA) was
removed to a separate program of its own in 1971. Whereas the organizations
and unions representing Federal employees have played a most significant role
in increased benefits for their employees, CIA employees have no such spokes-
men. Without same, it is incumbent upon CIA top management to represent its
employees' interests.
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CIA employee morale has suffered over the last few years. Congress
in its investigations, while criticizing Agency practices and procedures
in the past, has never questioned the dedication of, and hard`. work expended
by, CIA employees. Our employees have often heard that CIA takes care of
our own. The facts do not bear this out, at least in the area of benefits.
Management should show our employees that it cares by introducing proposals
for increased retirement benefits on their behalf.
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Legislative History of Special Retirement Benefits
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LEGISLATIVE HISTORY OF SPECIAL RETIREMENT BENEFITS
PUBLIC LAW
DATE OF ACT
79-601
79-724
2 Aug 1946
13 Aug 1946
80-168
11 Jul 1947
80-879
2 Jul 1948
86-604
7 Jul 1960
86-622
12 Jul. 1960
88-267
7 Feb 1964
88-643
13 Oct 1964
BENEFITS
Coverage for Members of Congress. Annuity
at rate of 2 1/2 percent of average annual
salary as a member times years of service
as member, but no more than 3/4ths of last
salary
Enacted Foreign Service Act to include
retirement at age 50 after 20 years with
annuity equal to two percent of average
salary up to 35 years of service credit.
Provides for 1 1/2 years of service credit
for each year of service at unhealthful. posts
except that no such extra credit for service
shall be credited to anyone who receives a
salary differential. (Option remains with
employee)
Provided retirement for FBI employees to
retire at age 50 after 20 years of service
with annuity computation equal to two percent
of average salary
Extended same liberalized FBI benefits to
officers and employees whose duties "arc
primarily the investigation, apprehension,
or detention. of persons suspected of
offenses against criminal laws of the
United States"
Liberalized annuity benefits for members
of Congress and Congressional Employees
Provided additional annuity for certain long-
term employees and reemployed annuitants and
liberalized benefits for Members of Congress
Included service by Architect of the Capitol
personnel as "Congressional Employee" service
Provided retirement benefits to certain CIA
employees. Permitted CIA Director to
mandatorily retire at age 50 with 20 years
or 25 years at.any age, anyone who had at
least 10 years with CIA and 5 years qualifying
service. Annuity computation equal to two
percent of average salary. Maximum retirement
pay set at 70 percent of average salary.
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PUBLIC LAW DATE OF ACT
BENEFITS
89-604 26 Sep 1966 Included service for United States
Botantic Garden personnel as "Congress-
ional Employee" service
2 Nov 1966
16 Dec 1967
26 Oct 1970
Provided that premium pay under Section
5545 (c)(1) shall be considered "basic
pay" for civil service retirement
purposes
Fixed maximum basic: annuity benefit at
80 percent of final, pay received by a
former member of Congress reemployed
with Member-annuity title
Provided retirement: on immediate annuity
after 20 years regardless of age. Annuity
computed on basis of 2 1/2 percent for
first twenty years and 3 percent for all
years over 20 on salary at retirement.
Maximum retirement pay set at 80 percent.
Also provides $50,000 lump-sum payment
to survivor of individual covered who is
killed in the line--of-duty. Law covers
Metropolitan Police Department, Executive
Protective Service,, the D.C. Fire
Department, U.S. Park Police and certain
contingents of US Secret Service
92-297 16 May 1972 Provided liberalized benefits for air
traffic controllers. Mandatory retirement
at age 56. Annuity entitlement after 25
years as controller or 20 years and age 50.
Annuity not less than 50 percent (2 1/2
percent). Law also provides equivalent of
2 years of full-time training for control-
lers with 5 years of service who are unable
to continue to perform as controllers.
After 2 years during which they are entitled
to all benefits, they be reassigned within
DOT, transferred to another federal agency
or involuntarily separated.
9.3-350 12 July 1974 Liberalized retirement benefits for "law
enforcement" employees and firefighters
(approximately 41,700 employees). Mandatory
retirement at age '55 or after 20 years,
whichever occurs later. Computation rate
increased to 2 1/2 percent on first 20 years
and 2 percent for years exceeding 20.
Premium pay for uncontrollable overtime as
part of basic pay for average salary.
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EXCERPTS FROM CONGRESSIONAL TESTIMONY ON 20 SEPTEMBER 1973 RE PL 93-350
Congressman DULSKI
"To maintain a staff of relatively young and vigorous men capable
of carrying out the government's criminal law .......................by
the replacement of older men who, because of the stringent physical
requirements of their positions and the unusual mental, emotional and
physical stress encountered in performing their duties, are no longer
able to perform at peak efficiency.
"The more liberal compensation factor was provided not as.a reward
for performance of hazardous duties, but because a more generous formula
was necessary to make earlier retirement, with resultant shorter service,
economically feasible."
"Make it more economically practicable for these employees to retire
before reduced proficiency stamina make them a greater risk to themselves
and others."
Congressman BRASCO
"First, to assist in maintaining a relatively young, vibrant and
effective work force .............
Second, to make the recruitment program for the agencies competitive..
.................................
While the intent of the legislation is not to reward our law
enforcement officers and firefighters for performing their dangerous
duties, but rather in recognition of the everyday psychological stress
they must endure, it is a fact that these public servants do suffer
fatalities and serious injuries during the course of daily activities."
Congressman RANGEL
"What the bill is doing is encouraging Federal law enfocement
officers and firefighters to retire after 20 years. Why? Primarily so
that these work forces will remain organizations with young people doing
the hazardous work in which they are so involved. To put employees
engaged in a hazardous occupation on the same level as other Federal
employees with respect to retirement benefits is simply not proper.
The Federal officers and firefighters experience hazards, isolation,
loneliness, and indefinite hours and locations that other employees do
not. And it takes young men to do the good job we require of them under
these conditions ..................Isolation from one's neighbors and friends
is a common problem for these officers, but what may be even worse is
the necessary lack of communication with one's family regarding his day-
to-day activities. Combined with the hazards we all are aware of and the
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indefinite working hours, isolation makes the officer's years of duty
a continuous string of stressful days and nights. Yet, I ask, where.
would we be without his dedication and selfless efforts in combating
organized crime?"
Congressman BRASCO
"Is it not a fact that their job descriptions and the assignments
that we in the Congress want them to perform, and the service the
American people expect to receive make them different because they are
firefighters and law enforcement personnel and must put their lives on
the line daily, 24 hours a day, which is not so of any other Federal
employees in our committee's jurisdiction."
Congressman DANIELS
"While the element of hazard was, and is recognized, I wish to
emphasize that the special treatment originally and presently accorded
these employees, and the benefit levels proposed in this bill, are provided
not as a reward for them having been subjected to an inordinate degree
of hazard during the performance of their primary duties ....................
......by providing an incentive for young men and women to enter and
remain in such careers, and that replacements within the service might be
facilitated at younger ages without undue hardship."
Congressman HUNT
"Many members of the grouping covered by this bill seldom spend more
than a few nights each week with their families. So they have given their
lives to law enforcement and it is no more than right that we give these
men some privileges, some real reason to stay in."
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f ?l~ 'dais
MEMORANDUM FOR: The Management/Advisory Group
SUBJECT . The CIA Retirement and Disability
System (CARDS)
1. This is in reply o your memorandum of 30 March
1976 on the same subject. In that memorandum you recom-
mended that I approve act on to propose legislation to
amend CIARDS on four cou ts.
2. I am in full sy
benefits should keep pa
Government employees i
connection a compariso
of State Foreign Servi
been more meaningful
for Agency employees
operations. Such a
the benefits of the
that few disparities,
you earlier, I have,
tration and his Sta
completed that tas
I must conclude th
the Agency or the
ipants in CIARDS
In addition, to p
benefits for CIA
possibly jeopard
systems of the
might add that
merely at picki
the Civil Serv
tioning at the
we are optimis
pathy with the view that CIARDS
e with those afforded.other U. S.
similar lines of work. In this
of benefits with the Department
Retirement System would have
ince CIARDS was designed -primarily
erving in support of overseas
omparison would have revealed that
wo systems are quite similar and
exist. Nevertheless, as I notified
had the Deputy Director for Adminis-
f study your proposals. He has
and based on the points he offered,
t it would not be in the interest of
'employees. who are or may become partic-
o propose the legislation you recommend.
opose to the current Congress additional
personnel could be counterproductive,
zing Agency efforts already in progress
CIARDS in line with the retirement
oreign Service and Civil Service. I
ur current legislative effort, aimed
g up for CIARDS various amendments to
ce Retirement Act, ran into serious ques-
Sub-Committee level in the House. While
is that these conforming amendments will
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be enacted, there is little question Ithat the political.
climate is such that liberalization Of benefits of the
type proposed in your memorandum wound have no chance
(1) I suspect you d
those Government employees i
covered by higher benefits (
officers, firefighters, etc
twenty years of service in
to receive the better benef
formula and lower retiremen
of personnel do not receive;
just for twenty years of G
(2) By contrast,
the benefits of CIARDS upq
a combination of only fiv
service" (usually oversea
Agency service and twenty
Bear in mind, too, that
pays into the retirement
ordinary Federal civilia
7%, while members of Con
enforcement officers ands
d not realize that
the special categories
.e., law enforcement
) must complete at least
hose specialties in order
is of higher annuity
age. Those categories
those better benefits
person may qualify for
attaining age 50 with
years of "qualifying
duty), ten years of
years of total service.
participant in CIARDS
fund no more than the
employees contribute,
ress pay 8% and law
firefighters pay 7-1/2%.
(3) We should ave to expect, therefore,
that if we were to ask Congress for a higher annuity
formula, CIARDS particirpants would be required to
pay more than 7% in contributions to the retirement
fund and, of considerably more importance, be required
to put in many more years of qualifying service than
just five in order to vest for the higher benefits.
Such a trade off would be unavoidable and in all
probability would redce significantly the number
of employees who woulL1 qualify for participation.
b. Lowering mandatory age -
(1) I assn e that your recommendation that
the mandatory retirement age in CIARDS be 'lowered
from 60 to 56 is based on the application of P.L.
92-297 to air traffic controllers in the Civil
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Service System. The Congress decided that twenty
years' performance in such a specialty should
qualify a person for retirement at an earlier age.
The law, however, does not permit retirement under
the special formulas for this group for just twenty
years of Government service.
(2) Based on our experience, there appears
to be no demonstrated need for reducing the manda-
tory retirement age in CIARDS to age 56. I ARDS
was enacted in order to provide the Agency with a
system by which "certain" of its employees could
be retired earlier than in normal Fedeib.l civilian
employment and to give those thus retired a higher
annuity in recognition of the lesseneA work span.
Thus, mandatory retirement age was sOt at age 60
(down 10 years from normal Federal mployment) and
is consistent with the concept of early" retire-
ment. Apart from an. earlier mandatory retirement
date, the age for voluntary retirment was also
lowered considerably from that fy?r the normal
Federal service.
(3 During the years IARDS has been in STATINTL
operation, employees ha e retired under its
provisions. 0 these, only retired at the
mandatory age. The average go of persons retiring
under CIARDS shows a steady ecline from 55.1 in
FY-67 to 51.8 in FY-75 (we o not have figures
readily available for FY-66 and FY-65). Clearly,
CIARDS has contributed migtily to the Agency inter-
est of keeping its cadre of "certain" employees
young and dynamic by way f early retirement, volun-
tary and involuntary, of articipants in CIARDS.
The State Deparment/USIA Authorization Act,
Fiscal Year 1975, P.L. 93-475, contained a provision
authorizing the Secret ry of State to pay a gratuity
to the surviving dope dents of any Foreign Service
employee who dies as result of injuries sustained
in performance of dut outside the United States.
This gratuity is an amount equal to the year's salary
of the employee at the time of death. There has been
a continuing interest on the part of the Agency in
c. Death gratuity -
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this legislation and every effort was made to extend
its provisions to Agency employees. An 0CC opinion
in May 1975 (OGC 75-1809) indicated, however, that
the provisions of the law could not be adopted by
the Director of Central Intelligence. Since that
time the Agency has had as one of its objectives the
introduction and passage of legislation to provide
similar death gratuity benefits for dependents of
Agency employees who die overs
of duty. It has not been poss
duce this provision along wit
needs of the Agency. The Di r
therefore, proposing that dea
be initiated as a separate is,
this is the proper course to
attempting to obtain legisla
P.L. 91-509 that provides de
survivors of primarily law e
the D. C. area who are kill
As in the case of retiremen
be far stronger if we argue
need for this benefit compa
Department of State.
A large segment of
was premised on the need f
retirement. A reduced ma
of achieving this and ano
maximum possible annuity
appear noticeably inconsi
for early retirement and
you propose to increase
The latter would entice
longer to obtain higher
the management objectiv
4. We all recognize tl
System., certain groups have
fits (special formulas and
recognition of the special
for at least twenty years,
they make higher contribut
I think CIARDS must stand
benefits from its own exp
seek greater benefits mer
as in the performance
ble as yet to intro-
other legislative
ctor of Personnel is,
gratuity legislation
sue. We are convinced
pursue rather than
ion patterned after
th gratuities to the
forcement officers in
d in the line of duty.
benefits, our case would
before Congress that our
es identically with the
the rationale for CIARDS
r a system for early
datory age was one means
her was reducing the
rom 80% to 70%. It would
tent to request authorities
hen to request authority as
he maximum possible annuity.
mployees to remain on board
nnuities, thus defeating
of early retirements.
t, within the Civil Service
been covered by special bene-
ower retirement ages) in
azards they must encounter
not five years, and for which
ons to the retirement fund.
on its own feet and justify its
rience. I believe it unwise to
ly on the grounds that various
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other occupations have received higher benefits. We must
look to our own rationale, and when. we do so, we do not
find that CIARDS has fallen to an unfavorable position.
The House Committee on the Armed Services is now consid-
ering I.R. 11088 which proposes 17 amendments for CIARDS
to conform it to the general Civil Service System. I see
no inconsistency in seeking conformity in that /bill and
in not agreeing that we should attempt to obtain the bene-
fits enacted specifically for special groups of employees,
such as law enforcement officials in the FBI and Bureau of
Prisons. I would expect that the Agency could get a lot
of argument over the contention that five years,r-qualifying
service in CIARDS equates to twenty years' duty- as, say, a
prison guard or an air traffic controller. his is not to
denigrate the purpose of CIARDS or the perfotma:nce of the
officers numbered among its participants; rather, it is to
face the realities of our position.
5. Your memorandum did not touch or a factor that
is critical in all Government retirement/systems today:
financing the benefits. Under the presgq~nt authorizations,
CIARDS is providing preferential benefits at no higher cost
to its participants than is paid by pa ticipants in the
Civil Service System. One of the 17 a endments now being
proposed for CIARDS calls for the inf sion of appropriated
funds; without such authorization CIA DS cannot meet its
schedule of future benefits. (All G vernment retirement
systems are financed by a combinatiop of contributions from
participants and appropriated fundsTo obtain the bene-
fits recommended in your memorandum would require a major
study of the means by which these ould be financed. Perhaps
qualifying service would have to b increased from five to
twenty years and contributions to the retirement fund in-
creased to 8%, or more. Retirees today are, like most of
the general population, in gooda1th and can expect a
fairly long life span. A retire ent.fund that permits
higher annuities to begin at ear ier retirement ages, and
with no provision for increase 'n contributions, and to be
paid out for 25 to 30 years aft r retirement would not last
long. Agency management is ve much concerned with the
soundness of the CIARDS fund a-id regards the proposed
amendment on financing of cri ical importance.
6. In your supporting papers the following statement
was made: "Our employees ha e often heard that CIA takes
care of its own. The facts o not bear this out, at least
in the area of benefits." I'must say that I was surprised
by this conclusion since I had reason to believe that the
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various employee benefit programs in the Agency were among
the best, if not the best, in Government. Against the
possibility that MAC may not be aware of the scope of our
present benefit programs, we offer the following:
a. The Office of Personnel administers a compre-
hensive benefits program which has been developed to
meet the needs of all CIA employees in such important
and diverse matters as insurance, compensation, awards,
club and recreational activities, public services and
casualty assistance. Employees are made aware of the
availability, provisions and limitations of each
program element and are provided assistance to insure
that they receive the maximum benefi s for which they
are eligible. Our benefit program s considered an
important ingredient in the attrac ion and retention
of high caliber personnel and in t eir overall morale.
STATINTL
b. A complete insurance prog
and special purpose insurance is
health insurance nian has an on
those who wish benefits in th
loss of life, limb or sight,
added insurance against medic
the treatment of certain spec
is available to those wishing
income in the event of a long
insurance, like that sold in
purchased. Group plan protec
those who wish to supplement t
life insurance coverages. Inc
programs made available to all
the Agency offers other volunta
Low cost group term life insura
addition to the statutory life
mately
am of health, life
llment of approxi-
In
insurance
ederal employees,
y insurance plans.
cc is available to
eir FEGLI and private
me replacement insurance
provide for continued
erm disability. Flight
ajor airports, may he
ion is also provided for
event of accidental
nd to those wishing
1 costs associated with
fied diseases.
c. The unique nature of any Agency assignments
coupled with interest in ind, idual employees has
resulted in our giving carefu attention and profes-
sional assistance in submittin employee compensation
claims under the Federal Emplo ees' Compensation Act.
Employees serving overseas receive a substantial bene-
fit through the Agency's Medical Program for Employees
and Dependents Abroad. Approximately $400,000 a year
is expended on the overseas program alone.
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d. Incentive awards provide both motivation and
reward for Agency employees. We have a commendable
record in President Ford's Special Program for Cost
Reduction within the Federal Government. Thus far
33 Agency employees have qualified for special recog-
nition with total savings in excess of two million.
dollars. Only three agencies among the 26 reporting
organizations surpassed our record. Our new Special
Achievement and Exceptional Accomplishment Awards
have provided an effective addition to the awards
program and an increased delegation of award approval
authority has helped to speed the resolution of sug-
gestion awards. Finally in the awards field, our
Honor and Merit Awards provide a significant means to
recognize accomplishments. The 77edals and certificates
themselves and the ceremonies Cie
o ducted by the most
senior officials of the Agency e examples of the
interest we have in our employe
e. In an entirely differe
benefits, the Office of Perso
tion and general policy direc
Activity Association. Oppor
for employees to participate
clubs, instructional classe
and cultural activities. A
are also offered for those
physical fitness, and, in
offers a wide variety of q
reasonable prices.
f. There is an oppor,
to support various publi
year our contributions a
Federal Campaign totall
our own Public Service
to employees who have
help. Through the Edu
daughters of employees
toward their plans fo
arranged a blood dono
Red Cross and our par,
program has benefite
blood replacement it
the largest and most
pants in this area.
t area of employee
nel provides coordina-
ion for the Employee
unities are provided
in a large variety of
and athletic? social
exercise room and track
ho are interested in
ddition, the EAA Store
ality merchandise at
,unity for Agency employees
service activities. Last
d pledges to the Combined
d $265,222. We have organized
id Society to render assistance
hausted other means of self
ational Aid Fund, the sons and
may be considered for help
further education. We have
program with the Fairfax County
icipation in this worthwhile
many employees because of the
provides. The Agency is one of
consistent Bloodmobile partic:i-
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uc e1~,
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g. If there is one activity that sums up the
concern and interest of the Agency in its employees,
that activity would be the Casualty Assistance Pro-
gram. Upon notification of the death of an employee
the Office of Personnel works closely with other
components to arrange appropriate notification of
survivors and. renders as much assistance as possible.
If death occurs overseas, all necessary coordination
is provided for the return of the body to the place
of interment, return of family members, and the ship-
ment of personal and household effects. At the same
time, an immediate review is made of all benefits to
which survivors may be entitled; i.e., unpaid compen-
sation, insurance, credit union, death benefits of the
retirement system, or benefits under ?he Federal
Employees' Compensation Act. PersonWel Officers con-
tact the survivors as soon as proper,.' under the
circumstances and in most every instance by personal
visit. These representatives advise the survivors
of all benefits to which they are entitled and obtain
any necessary signatures on applications for benefits.
By these actions the survivors are spared not only
the worry about the benefits av lable to meet their
financial needs, but also the odea.l of inquiring
about the means to obtain thosl benefits. Knowing
that there is such a program uses the concern that
many employees have about surfrivor entitlements.
h. Employees involved i,i an emergency or in any
situation affecting Agency 'ecurity are urged to seek
advice and assistance from the Security Duty Office
by calling 351-6161 at any time of the day or night.
The assistance provided ov6r the years in a variety of
situations has proved to be of the utmost importance
to employees and members Of their families.
7. Overall, this seems f o me to be an impressive range
of benefits reflecting interest in the care and welfare of
our employees. Nevertheless' if you believe there are areas
requiring improvement or mod; .fication, such recommendations
should be brought to the attention of the Director of
Personnel.
8. I very much appreciate receiving your thoughtful
paper.
George Bush
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Distribution:
0 - Addressee
1 DCI
"1 - D D C I
1 - ER
,y-- DDA
1 - D/Pers
1 - DD/Pers/SP
2 - C/RAD (1 w/held)
STATINTL OP/RAD,O (26 Apr 76
Revised: DD/Pers/SP :gec (29 Apr 76)
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