MEMORANDUM FOR, DIRECTOR OF PERSONNEL FROM JOHN F. BLAKE

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CIA-RDP79-00498A000500160016-2
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RIPPUB
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U
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28
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December 9, 2016
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July 21, 2000
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16
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Publication Date: 
May 4, 1976
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MF
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Approved For RelL$se 2O /O5T0 :-#I ,I,,, M_! ~9_~e f_ ?I RpP79-cO498AoGU500160016-2 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) Orip - D/OP w/Orig w/Orig 4 cc's of Atts (DDA 76-2214/2215) prowgA F ftg WWI f}Z 0WWtyfIA D i90498A000500160016-2 1 - DDA Chrono w/o Atts 1 - ,J}B, Chrono wjo Atts _ DD/A:JFB1ake:der (4 May 1976) Approved For R &Wf( b1TCTi- &~%-- 9 db0500160016- DD/A #;.c:gwstry 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 Approved For Af W c Q?1Q5/01yrCIA-xRDPt799-0004~9p8A000500160016-2 ID]IINISTRA'TIVE -- INTERNAL USE ONLY Approved For Release 2002/05/01 : CIA-RDP79-00498A00050016d1672 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 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 t}~~f/ S~+ Y Y USE OM:1T`~.;~i'.Y a ?rS~rr2 -- .[. ivimt~",. "3ih~07.n-,..E,i +ASJIRi 1[INISx=`="u , .. #iV:ca AAL USE ONLY Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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) Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 qNT'Y Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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. Approved For Release 2002/05/01: CIA-RDP79-00498A000r500160016-2 0XIM 1p1.4T .r' is ~.: ~. ---.. .. I ui C T.~.l Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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 - 2 - Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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 Approved For Release 2002/05/01 ?CIA-RDP79-00498A000500160016-2 UNMY Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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 Approved For Release 2002/05/014 CIA-RDP79-00498A000500160016-2 -Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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. Approved For Release 2002/05/0.1 :cQIA-RDP79-00498A000500160016-2 . a i hh h s ~B ~ n1 :i 1 DSO M Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-~, 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 Approved For Relea 20,JJ/05/01, : CIA- P79-0 4 A00 5 0160016-2 it,Gi s y Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Comparative Study of Special Retirement Systems Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved Fo~raap/QO,,h+1-ftAW,17gig4000500160016-2 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. Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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. Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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. Approved For.Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Legislative History of Special Retirement Benefits Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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. Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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. Approved For Release 2002/05/01 CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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." Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 f3:11 I~JrY:+7~~{7'! rVE .r.,~ i1 4i-DAL t1 ~ 4~a"i?- r?DA F .t'zStat.I Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 - - - - 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 Approved Foe gQQ~1,05/01 ;,GIq-RP9:-0 49.8A000500160016-2 Approved For Release 2002/05/01 CIA-RDP79-604~8AOOb500160016-2 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 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 1~: :I Approved For Release 2002/O5/01 CIA-RDPI9=004g9 ~400650'0160016-2 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 - Approved For Release 2002/05/01 CIA-RDP79-00498A000500160016-2 Approved For Release 2002105101= C[A:RDP79- 00498,AL0095;A -X 0016-2 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 - 4 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release d2/O /O1 : CIARDP79-0049'$"A 0500160016-2 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 Approved For Release 2002/05/01 :IA-RDP79-00498A000500160016-2 Approved For Rele;k 2.=105101.' ',CIA-RD.P79-0N498A?00500160016-2 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. Approved For Release 2002/05/01 CIA-RDP79-00498A000500160016-2 Approved For Releas4INW1 5/( 1w CIA-RDP79=004~8A0OG56'160016-2 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- - 7 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 uc e1~, Approved For Release 2002/05/01 CIA-RDP79-00498A000500160016-2 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 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2 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) Approved For Release 2002/05/01 : CIA-RDP79-00498A000500160016-2