INCREASING ANNUITIES PAYABLE FROM THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00364R000500220002-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 19
• Document Creation Date: December 9, 2016
• Document Release Date: August 21, 2000
• Sequence Number: 2
• Publication Date: September 26, 1966
• Content Type: REPORT

Approved For Release j~~qw:tcl
89TH CONGRESS
2d Session
ff jgPjW! j 00220002-7
SENATE
INCREASING: ANNUITIES PAYABLE FROM THE FOREIGN
SERVICE RETIREMENT AND DISABILITY FUND
SEPTEMBER 26, 1966.-Ordered to be printed
Mr.. FULBRIGHT, from the Committee on Foreign Relations, submitted.
REPORT.;
[To accompany S. 3247J
REPORT
No. 1656
The Committee. on Foreign Relations, to which was referred the. bill
(S. 3247) to provide certain increases in annuities payable from the
Foreign Service retirement and disability fund, and for other purposes,
having considered the same, reports favorably thereon with amend-
ments and recommends that the bill as amended do pass.
PURPOSE OF BILL
The main purpose of S.. 3247 is to place annuitants of the Foreign
Service retirement system on the same basis as civil service annuitants
for purposes of computing future cost-of-living increases in annuities.
It would also provide retired Foreign Service personnel with the same
percentage increase in their annuities as was authorized for the civil
service retirement system last year and make this increase available
to those who retire during a period of 6 months following the date
of enactment of the bill.
The bill also authorizes additional employee benefits, other than
retirement, (1) for all U.S. Government personnel serving in hostile
areas, such as Vietnam, and (2) for Foreign Service personnel and
their dependents in certain emergency or extraordinary situations.
In addition the bill would authorize appointments without time
limitation for Foreign Service Reserve officers of the U.S. Information
Agency.
PROVISIONS OF THE BILL
The principal provisions of the bill are summarized as follows:
1. It authorizes an increase in annuities for retired Foreign Service
annuitants to provide them with cost-of-living benefits equal to
those granted to retired civil service employees last year. It also
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provides that future cost-of.-living, increases will be' determined under
the same formula as that applicable to the civil service retirement
system.
2. It requires the Secretary of State to make a study and submit
the findings and his recommendations to the President and the
Congress whenever there has been at least a 3-percent drop in the
cost of living over a 3-month period.
3. It provides for the computation of annuities on the basis of not
more than 40 years of service credit, but the annuities so, computed
could not exceed 80 percent of the average of the fire highest con-
secutive salary years. It also provides for the recomputation of
annuities of participants in the Foreign Service retirement and disabil-
ity system who at the time of their retirement had in excess of 35 years
of service credit.
4. It provides broadened authority for the Secretary of State to pay
travel and related expenses for officers and employees of the Foreign
Service, or their dependents, in hardship situations or under
extraordinary conditions.
5. It authorizes medical benefits for an officer or employee beyond
the date of his separation from the Foreign Service and for dependents
beyond the death or separation of the ocer or employee.
6. It provides that no leave shall be charged, for a period up to 1
year, when a Government employee's absence is due to injury or ill-
ness as a result of hostile action abroad or is clearly caused by the fact
that he was located abroad.
7. It authorizes an increase from 25 to 50 percent in the maximum
allowable salary differential for service in areas where there is unusual
danger from hostile action.
8. It authorizes the appointment or assignment of Foreign Service
Reserve officers for service with the U.S. Information Agency for an
unlimited period.
COMMITTEE ACTION
S. 3247 was introduced by Senator Fiilbright at the request of the
executive branch on April 20, 1966. It was referred to the Committee
on Foreign Relations and was considered by the committee in executive
session on August 30, amended, and on September 22 it was amended
further and ordered favorably reported to the Senate.
The amendments to the bill relating to nonretirement employee
benefits are provisions taken from H.R. 6277, which was considered
at great length by the committee. Public hearings were held on this
bill on April 19, 21, and 28 by a special subcommittee. It was con-
sidered. in executive session by this subcommittee on June 29, July
21, and on August 18 the subcommittee voted to recommend favorable
action on only those four provisions of H.R. 6277 which have been
added as amendments to 5.3247.
1)TScITSfiioN OF THE PROVISIONS OF Tlir BILL
Public Law 89- 308 enacted during the last session of Congress
authorized cost-of-living increases for Foreign Service annuitants
through a formula, which requires an automatic increase when the
price index goes up 3 percent or more during a calendar year. Under
this formula Foreign Service annuitants who retired before January 2,
1965, received a 4.3-percent increase in their annuities effective April 1,
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1966. In the meantime the cost-of-living adjustment formula for the
civil service was liberalized by Public Laws 89-205 and 89-314. This
formula provided. a 6.1-percent, cost-of-living annuity increase for
civil service personnel who retired before December 31, 1965.
On April, 5, 1966, the executive branch requested that Congress
consider legislation to provide Foreign Service annuitants with cost-
of-living increases which would put them on a par with civil service
retirees and to make uniform for both systems the formula for comput-
ink future increases.
Phe provisions recommended for passage would provide a 6.1-per-
cent increase in an annuity, retroactive to April 1, 1966, to retired
Foreign Service personnel on the annuity roll at the date of enactment.
Those who have received the 4.3-percent increase under Public Law
89-308 would receive an increase of only 1.8 percent which would
bring their total increase to 6.1 percent. Foreign Service personnel
eligible for retirement would be allowed up to 6 months from the date
of enactment to retire and receive a 6.1-percent increase in the annuity
to which they are entitled. Last year civil service employees were
allowed 3 months within which they could retire and receive the
benefit of the 6.1-percent increase. It is estimated that the cost-of-
living increases to be authorized by this bill will cost $290,000 annually
in additional payments from the Foreign Service retirement fund.
The table below provides further details concerning the cost of
implementing the provisions of the bill:
Annuity increase cost estimate (S. 3247)
Commencing date of
annuity
Jan. 1, 1965,
and prior
Jan. 2, 1965,
to
Mar. 1, 1967 2
Annuity increase percentage----------------------------------
1.8
0.1
Number of annuitants:
1966 ---------------------------------------------
Sept. 30
1,238
314
1, 552
,
Mar. 1
1967-------------------
1,229
420
1,649
,
Retroactive payment for period Apr. 1 to Sept. 30, 1966------_
$70,000
$44,000
$114,000
Payments during first year after enactment, Oct. 1, 1966, to
Sept. 30,1967----------------------------------------------
$138,000
$162,000
I This estimate assumes enactment Sept. 30, 1966, and assumes a 33-percent increase in the number of
retirements in 1966 over 1965.
2 Those who retire on or after Mar. 1, 1967, will not receive this increase.
The bill also changes the formula for computing. future cost-of-
living increases for Foreign Service annuitants to make it uniform
with that applicable to the civil service retirement system. An
increase in annuities will be provided automatically under this formula
if this price index rises at least 3 percent in a 3-month period and does
not drop below that level within the following 3 months.
The committee amended the executive branch proposal to provide
for appropriate recommendations by the Secretary of State to the
President and the Congress in the event the price index falls by at
least 3 percent during a 3-month period. Under the amendment
adopted by the committee, the Secretary of State will be required
to make a study whenever the price index has fallen by 3 percent or
more in a quarter to determine if annuities should be adjusted down-
ward to reflect the decrease in the cost of living. The results of his
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SING FOREIGN SERVICE RETIREMENT ANNUITIES
stud, along with his recommendations, shall be submitted to the
President and the Congress. It is appropriate that attention should
be directed toward possible reduction of annuities, which have been
increased by price index changes, whenever the justification for such
increases no longer exists.
The committee believes that the proposed annuity increases
are justified on the simple grounds of equity to retired Foreign Service
personnel. The only reason Foreign Service annuitants were not
treated the same as civil service annuitants in 1965, when Congress
passed separate bills for cost-of-living adjustments in each system,
was because the formula in Public Law 89-308 was drafted long before
the bill which liberalized the civil service formula was introduced.
Foreign Service annuitants were the innocent victims of the legislative
logjam at the end of the session. This bill will correct that inequity.
It should be noted that the annuity formula changes of S. 3247
were recommended by the President's Cabinet Committee on Federal
Staff Retirement Systems. The pertinent portion of the Committee's
report (IH. Doe. 402, 89th Cong., 2d sess.) is as follows:
C.4. FOREIGN SERVICE ANNUITY ADJUSTMENTS
Recommendation
The Foreign Service annuity adjustment formula based on
changes in the Consumer Price Index should be made iden-
tical to the civil service formula. In addition, current
cost-of-living increases should be approved for the Foreign
Service comparable to those approved for the civil service
under Public Law 89-205, formerly known as the Daniels
bill.
Cost estimate
One hundred and thirty-six thousand dollars annually.
Discussion
The Foreign Service Annuity Adjustment Act of 1965,
Public Law 89-308, made certain changes with respect to
survivor annuities and, in addition, extended to the Foreign
Service a cost-of-living annuity adjustment formula. The
formula enacted was similar to the formula in the CSR act
prior to its amendment by Public Law 89-205. The old
formula was enacted because H.R. 4170, which became
Public Law 89-308, was drafted long before the Daniels bill
was introduced. Because of the legislative logjam that
developed in the closing days of the 1st session of the 89th
Congress, it would not have been possible to amend H.R.
4170 before adjournment. Rather than delay its passage
until the second session, it was passed in its existing form.
This old formula, which delays increases until the cost of
living over an entire year has increased by 3 percent over the
base period, should be amended to conform to the recently
enacted formula for the civil service which provides auto-
mtL,tic annuity increases as soon as the cost of living in each
of 3 consecutive months increases 3 percent or more over the
base period.
Public Law 89-308, applicable to the Foreign Service, will
result in an annuity increase effective April 1, 1966, of
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INCREASING FOREIGN SERVICE RETIREMENT ANNUITIES 5
approximately 4 percent (depending on the average cost-of-
living change during 1965) in annuities which commenced
prior to January 2, 1965. Public Law 89-205 (formerly
known as the Daniels bill) as amended by Public Law
89-314, applicable to the civil service, resulted in it 4.6-percent
annuity increase under the revised formula and also pro-
vided a supplemental 1.5-percent, cost-of-living increase in
all annuities which commenced on or before the effective
date of the increase. The latter varied from December 1,
1965, to January 1, 1966, depending on the commencing date
of the annuity. Public Law 80-205 also authorized an
additional 5-percent increase in annuities which commenced
prior to October 2, 1956, so that the total increase in such
annuities was 11.1 percent. This additional 5-percent in-
crease was granted in recognition of the less favorable
formula used to compute CSR annuities prior to October 2,
1956. Since there was no comparable change in the FSR
annuity computation formula, this 5-percent increase should
not be authorized for Foreign Service annuitants. flow-
ever, legislation based on the other provisions of Public Law
89-205 should be sought for the Foreign Service in order to
provide comparable treatment under CSR and FSR.
We believe that legislation to implement this recommenda-
tion should be enacted promptly and that it should not be
made a part of an omnibus bill on retirement.
The following letter from Assistant Secretary of State Douglas
MacArthur II contains further details in support of the bill:
DEPARTMENT OF STATE,
Washington, August 24, 1966.
Ron. J. W. FULBRIGHT,
Chairman, Committee on Foreign Relations,
U.S. Senate.
DEAR MR. CHAIRMAN: In his letter of August 19 the Secretary
urged early favorable action by your committee on the legislative
proposals contained in S. 3247, a bill that would grant the same cost-
of-living increases to Foreign Service annuitants as were recently
granted civil service annuitants.
I wish to offer for the record a detailed justification for and an
explanation of S. 3247 in the hope that it will be helpful to the commit-
tee in its consideration of this very important legislation.
Prompt enactment of legislation of this kind was recommended by
the Cabinet Committee on Federal Staff Retirement Systems and this
recommendation was endorsed by the President.
The Department and the Congress had this same end in mind during
consideration of II.R. 4170 which became the Foreign Service Annuity
Adjustment Act of 1965. That law authorized. an automatic cost-of-
living adjustment provision for the Foreign Service which was identical
to the annuity adjustment formula provided for the civil service in
1962 by Public Law 87-793. Under the operation of that cost-of-
living adjustment provision, Foreign Service personnel who retired
prior to January 2, 1965, received a 4.3-percent annuity increase
effective April 1, 1966.
In the meantime, the cost-of-living adjustment formula was
liberalized for the civil service pursuant to a bill introduced by
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Congressman Daniels which became Public Law 89--205. This law, as
amended by Public Law 89-314, provided a cost-of-living annuity in-
crease for civil service personnel who retired at any time prior to
December 31, 1965, of 6.1-percent effective December 1, 1965, or on
the commencing date of annuity if later.
In order to provide equivalent treatment for the Foreign Service,
the proposed legislation would do two things: First, it would provide
a 6.1-percent increase retroactive to April 1, 1966, for all those on
the annuity roll on the date of enactment. (Those who have received
the 4.3-percent increase under the Foreign Service Annuity Adjustment
Act of 1965 would receive only the amount necessary to bring their
total increase to 6.1 percent.) Second, it would amend the cost-of-
living adjustment. formula governing future increases for the Foreign
Service to make it identical with the formula governing future increases
for civil service annuitants.
Incidentally, this formula was made applicable for computing cost-
of-living adjustments in military retired pay by the 1965 military
pay bill, Public Law 89-132, effective September 1, 1965. Prior to
that, a formula similar to the old civil service formula was applicable
to the military. In other words, this legislation would make the same
adjustment in the cost-of-living annuity adjustment formula for the
Foreign Service that was enacted last year for both the civil service
and the military services.
A principal difference between the two formulas-the one formerly
applicable to the civil service and now applicable to the Foreign
Service and the liberalized one now applicable to the civil service
and military services and proposed to be applied to the Foreign
Service-is the triggering mechanism for the increase. Under the
present Foreign Service formula, an annuity increase is triggered only
after the cost of living goes up over an entire calendar year for an
average of 3 percent or more. Whereas, under the liberalized civil
service formula, an annuity increase is triggered by an increase in the
cost of living of 3 percent or more for it period of 3 consecutive months.
A second difference is that under the Foreign Service formula the
increase is extended only to those who have retired prior to January
2 of the year triggering the increase-15 months prior to the effective
date of the increase. Whereas under the liberalized civil service
formula, the increase is provided to all those whose annuities cont-
inence on or before the effective (late of the increase.
Now with respect to the application of this legislation to current
eraployees who are at retirement age-civil service employees were
given 3 months, from October 28, 1965 (the date of enactment of
Public Law 89-205), to December 30, 1965, to retire and receive the
benefit of the 6.1-percent increase. It is proposed that Foreign
Service personnel eligible for retirement be given the same opportunity
to retire and receive the benefit of this cost-of-living increase. S. 3247
would give them this opportunity. Foreign Service personnel would
have between 5 and 6 months after enactment of this legislation to
plan and effect their retirement and be eligible for the 6.1-percent,
co,.t-of-living increase in their annuities. The additional time for the
Foreign Service is needed because of the location of Foreign Service
otlieers and ernpiuvees at posts throughout the world and the leadtime
necessary to schedule transfers to accommodate those desiring to
retire.
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INCREASING FOREIGN SERVICE RETIREMENT ANNUITIES 7,
I believe that it is a matter of great urgency that this legislation
be, enacted this year in order to put Foreign Service annuitants on a
par with civil service annuitants with respect to the current increase,
and especially with respect to future increases. As soon as the price
index reaches 113.6 another annuity increase will be triggered for the
civil service. The index stood at 113.3 in July so that it is probable
that it will reach 113.6 in August or September. This will make the
next increase for the civil service effective in January or February
1967.
On the other hand, under the present Foreign Service formula,
unless the price index increase for the period July through December
1966 exceeds the increase for the first 6 months of 1966, the next
annuity increase for the Foreign Service will not become effective
until April 1, 1968. This factor alone gives emphasis to the urgent
need for this legislation.
I am sending a copy of this letter to Senator Gore since his subcom-
mittee has already given some consideration to this legislation.
We stand ready to provide any additional material which the com-
mittee or the subcommittee may desire.
Sincerely yours,
DOUGLAS MACARTHUR II,
Assistant Secretary for Congressional Relations.
The committee has approved an amendment to the bill which
incorporates four provisions of H.R. 6277. These provisions authorize
additional benefits to civilian personnel serving abroad under hostile
conditions, such as in Vietnam, and to Foreign Service personnel in
certain hardship or emergency situations. The sections relating to
payment of travel expenses and medical benefits apply only to Foreign
Service personnel, but the sections pertainingto leave in case of injury
or illness abroad, and salary differentials for service in hostile areas
apply to all civilian personnel of the Government. Experience in
Vietnam and other trouble spots such as the Congo has proven the
need for these additional benefits. A detailed analysis of each of
these provisions is contained in the section-by-section analysis.
The committee has also amended the bill to authorize appointments
unlimited as to time for Foreign Service Reserve officers serving in the
U.S. Information Agency. Section 522 of the Foreign Service Act
of 1946 limits Reserve officer appointments to a total of 10 years
and in view of this there is no statutory basis for a career service for
the Reserve officers who form the professional corps of the USIA.
The committee recognizes the problems this has created within the
Agency and has recommended that these officers be made eligible
for unlimited Reserve officer appointments as an interim step toward
formulating a permanent career system. The committee expects
the executive branch to give further consideration to personnel
problems in the foreign affairs agencies, and submit appropriate
legislative proposals for consideration by the next Congress.
The committee recommends that the bill, as amended, be passed.
Section 1. Cost-of-living adjustments in annuities
Section 1(a) redefines the Consumer Price Index to mean the
monthly price average instead of the average over a full calendar year.
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It also defines a new term "base month" to mean the month referred
to for determining an increase in annuities after the first increase
granted by this act.
Section 1(b) provides that each annuity payable from the fund
shall be increased by 6.1 percent. The increase will be retroactive to
April 1, 1966, for those on the retired roll that date. The increase
will be effective on the date of retirement for those who retired since
then or who retire not later than the first day of the sixth month after
enactment.
The 4.3-percent, cost-of-living increase effected under the provisions.
of the Foreign Service Annuity Adjustment Act of 1965, Public Law
89-308, will be deducted from the 6.1-percent increase for a net
increase of 1.8 percent for those who received the benefits of that act.
This provision also changes the formula for computation of future
cost-of-living increases to make it uniform with the formula applicable
to the civil service retirement system. This formula guarantees a
cost-of-living increase whenever the price index shall have equaled a
rise of at least 3 percent for 3 consecutive months over the price index
for the base month. The base month, as a takeoff point is established
as July 1965, from which to determine the next increase after April 1,.
1966, to coincide with the formula established by Public Law 89-205
for the cost-of-living increases now applicable to civil service annuities.
Under this subsection the Secretary of State is also required to
initiate a study whenever the price index has dropped at least 3
percent in a 3 months' period to determine whether annuities should
be adjusted to reflect the decrease. He shall report the findings of
this study to the President and the Congress along with his recom-
mendations for legislative action, if any.
Provision is made for the passing on to survivors of annuitants the
total percent being received by the annuitant at death, or if the
annuitant has died between April 1, 1966, and date of enactment, the
survivor would receive 6.1 percent in lieu of 4.3 percent, and in the
case of children the total percent increase allowed and in force under
this section will be added to annuities which began after April 1, 1966,
whether the child's annuity results from a death in service case, or
the death of an annuitant.
This subsection also prohibits inclusion of annuity purchase by
voluntary contributions from the annuity upon which the increases
are calculated.
The adjusted monthly annuity rate would be fixed at the nearest
dollar, but the monthly rate would be increased by at least one dollar.
The last clause would apply in a case involving a number of children.
One family of 10 children annuitants now receive $180 annually for
each child. If an increase is only 3 percent, this would be only 45
cents per month except for this proviso, which would make it $1 per
month.
Section 2. Computation of annuities
This section would amend section 821 (a) of the Foreign Service
Act of 1946, as amended, by striking out the word "thirty-five" and
substituting the word "forty" and by adding at the end of subsection
(a) the following sentence: "The annuity as so computed shall not.
exceed 80 per centum of the average salary used to compute the.
annuity."
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Under existing law the annuities of participants in the Foreign
Service retirement and disability system are computed on the basis of
not more than 35 years' service credit regardless of the length of serv-
ice of the participant. Under the terms of this bill, the annuity would
be computed on the basis of not more than 40 years of service credit,
but the annuity so computed could not exceed 80 percent of the "high
five" average salary. This computation has the effect of equating
the Foreign Service and civil service retirement systems and is in
accord with the recommendation of the Cabinet Committee on Fed-
eral Staff Retirement Systems.
This section also amends section 855 of the Foreign Service Act of
1946 by providing for the recomputation of annuities of former
participants who at the time of their retirement had in excess of 35
years of service credit. In the committee's view, it seems appropriate
to extend the 40-year (80 percent) computation formula to those
participants who have already retired.
Section S. Travel expenses
This section amends section 911. of the Foreign Service Act of 1946,
as amended, which relates to travel and related expenses, by broaden-
ing the authority of the Secretary of State to pay travel and related
expenses of Foreign Service personnel and their dependents under
"extraordinary conditions or circumstances involving personal hard-
ship * * *" The separation of Foreign Service, USIA, and AID
personnel in Vietnam from their families exemplifies the need for the
additional authority provided in this section. Under existing law the
Secretary has limited authority to pay for the travel of an officer or
employee, stationed at a hardship post, to another location abroad for
purposes of rest and recuperation. This authority is limited to one
round trip in each 2-year tour and two round trips in a 3-year tour
which is unbroken by home leave. This provision helps in the case of
personnel in Vietnam whose families are living in other locations
abroad, such as in Japan or Thailand, but the Secretary has no au-
thority to pay travel expenses to enable an officer or employee to visit
with his family if it has returned to the United States. Under this
authority the Secretary will be able to pay for travel expenses to
reunite families of employees of these agencies in hardship situations
when such action would further the interests of the Service. The
dangerous and difficult conditions in Vietnam under which these
dedicated men serve justify this authority.
The wording of this section is sufficiently broad to authorize also
the travel of Foreign Service personnel and their dependents in per-
sonnel emergencies which would include the serious illness or death
of a parent, daughter, or son or other close relative of the employee
or spouse. It is also anticipated that this authority will be used to a
limited extent to pay travel expenses of an employee's spouse for
language training or for orientation purposes.
The phrase "without regard to the provisions of this or any other
law" has been included to eliminate certain confusion which has ex-
isted with respect to the Secretary's authority under this section to
prescribe foreign service travel regulations as such authority relates to
the Administrative Expenses Act of 1946 and to the Travel Expense
Act of 1949. It is not included to permit the circumvention of pro-
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10 INCREASING FOREIGN SERVICE RETIREMENT ANNUITIES
visions of law regarding the use of American-flag ships or of American-
flag aircraft.
,Secho m 4. Medical services
Ti, is section would add it new section 944 to the Foreign Service Act.
It would authorize the Secretary to continue medical benefits under
part E of title IX (medical services) for officers and employees beyond
the date of separation and for dependents beyond the date of the death
or separation of -in officer or employee whenever it is considered in t ie
pi blie interest to do so. Under existing authority medical benefits
for officers and employees cannot be continued beyond the date of
separation from the Service and dependent benefits cease automatically
at the time the employee dies or is separated from the Service. There
have been a few instances in which a dependent who has been in a
hospital at the time the sponsoring employee died or was separated
has had to assume responsibility for all care rendered after the date of
death or separation. Employees and dependents on the verge of
rcceivina treatment have been denied it because of the mandatory
separation or death of the employee. The law presently accords to
eligible dependents the identical medical benefits granted to eiri-
ployees except for (1) the first $35 of the cost of hospitalization or
similar treatment, and (2) it 120-day limit on the period of treatment
at U.S. Government expense for a single illness or injury. It is
proposed to continue these limitations under the authority granted
by ?,he new section 944.
The committee intends that this authority shall in no way be used
as a postretirernent medical benefits program but that it is to be
limited to taking are of acute hardship cases which arise coincident
with the death or separation of employees.
Section, 5. Absence resulting from hostile activity
Subsection (a) amends subchapter II of chapter 63 of title 5,
United States Code, which relates to leave, by adding a new section.
The new language provides that, for a period not to exceed 1 year, no
charge against leave shall be made for any absence due to injury or
illness sustained abroad by an officer or employee as a result of hostile
activity or clearly caused by the fact that he was located abroad.
The provision will permit an absence without charge to leave in those
extraordinary situations in which officers and employees sustain
serious illnesses or crippling injuries from physical violence and
unavoidable involvement in. wars, guerrilla and militant insurgent
situations, or localized. hostile mob actions. Similarly, it will protects
the employee's earning power in those situations where prolonged
disability results from illness which can be attributed solely to the
fact that he was serving abroad and which would not have been
incurred had he remained in the United States. Personnel serving
abroad particularly in the Tropics are exposed to a wide range of dis-
abling and disfiguring diseases. The authority granted by this section
will make it possihle to retain them in full-pay status while rendering
them all necessary hospitalization and related care.
Subsection (b) makes this benefit retroactive to January 1, 1965,
to cover a number of employees who have been seriously incapaci
tasted dice to hostilities against U.S. installations and employees in
Vietnam- since then, including the terrorist attack against our chancery
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INCREASING FOREIGN ERW
in Saigon. It is estimated that not more than 30 employees would be
eligible to receive benefits under this retroactive provision.
Section 6. Overseas differentials
This provision amends section 5925 of title 5, United States Code,
relating to overseas post differentials, to authorize the payment of
up to 50 percent of basic compensation to civilian personnel of the
Government serving in a foreign area where there is unusual danger
from hostile activity. Under existing law the maximum differential
is 25 percent. The situation in Vietnam exemplifies the need and
justification for granting additional incentives to personnel serving
under hazardous conditions. The committee has approved this pro-
vision with the understanding that this additional differential will
apply, at the present time, only to personnel in Vietnam.
Section 7. Appointment of Foreign Service Reserve officers
This section amends the U.S. Information and Educational Ex-
change Act of 1948 by authorizing appointments or assignments
of unlimited duration for Foreign Service Reserve officers serving
with the U.S. Information Agency. Career USIA officers now re-
ceive unlimited appointments as Foreign Service Reserve officers,
although there is no statutory basis for this practice since Reserve
appointments cannot exceed a total of 10 years because of a limitation
in section 522 of the Foreign Service Act. Their tenure beyond 10
years depends on a rider each year in the appropriation act for the
Agency. About 50 USIA officers have already reached the 10-year
limit.
Last year the President nominated 760 of the career officers of the
Agency as Foreign Service officers, under the lateral entry provisions
of the Foreign Service Act. Although the nominations were approved
by this committee, they were not acted on by the Senate. A revised
list of 697 nominations was submitted by the President this session
but the committee has not approved the list.
The committee recognizes that its action in removing the time
limitation on Reserve officer appointments in the USIA is only a
stopgap measure. The committee expects the executive branch to
give further study to the problem and that it will submit specific
legislative proposals for consideration in the next Congress.
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12 IN-CREASING FOREIGN SERVICE RETIREMENT ANNUITIES
In compliance with subsection 4 of rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill, as
reported, are shown as follows (existing law proposed to be omitted
is enclosed in black brackets, new matter is printed in italic, existing
law in which no change is proposed is shown in roman) :
TITLE VIII-THE FOREIGN SERVICE RETIREMENT AND
DISABILITY SYSTEM
SEC. 504. (a) Annuitants shall be persons who are receiving an-
nuities from the Fund and all persons, including surviving wives and
husbands, widows, dependent widowers, children and beneficiaries of
participants or annuitants who shall become entitled to receive annui-
ties in accordance with the provisions of this Act, as amended, or in
accordance with the provisions of section 5 of the Act of May 1, 1956
(70 Stat. 125).
(b) When used in this title the term-
(1) "Widow" means the surviving wife of a participant who was
married to such participant for at least two years immediately pre-
ceding his death or is the mother of issue by such marriage.
(2) "Dependent widower" means the surviving husband of a par-
ticipant who was married to such participant for at least two years
immediately preceding her death or is the father of issue by such
marriage, and who is incapable of self-support by reason of mental or
physical disability, and who received more than one-half of his support
from such participant.
(3) "Child" means an unmarried child, under the age of eighteen
years, or such unmarried child regardless of age who because of
physical or mental disability incurred before age eighteen is incapable
of self-support. In addition to the offspring of the participant and
his or her spouse the term includes (a) an adopted child., and (b) a
step-child or recognized natural child who received more than one-
half of his support from the participant.
(4) The term "price index" shall mean the Consumer Price Index
(all items-United States city average) published monthly by the Bureau
of Labor Statistics. The term "base month" shall mean the month for
which the price index showed a per centum rise forming the basis for a
cost-of-living increase.
I'ART C-COMPUTATION OF ANNUITIES
SEC. 521. (a) The annuity of a participant shall be equal to 2 per
centum of his average basic salary for the highest five consecutive
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INCREASING FOREIGN SERVICE RETIREMENT ANNUITIES 1.3
years of service, for which full contributions have been made to the
Fund, multiplied by the number of years, not exceeding [thirty-five],
forty of service credit obtained in accordance with the provisions of sec-
tions 851, 852, and 853. However, the highest five years of service
for which full contributions have been made to the Fund shall be
used in computing the annuity of any participant who serves as chief
of mission and whose continuity of service as such is interrupted prior
to retirement by appointment or assignment to any other position
determined by the Secretary to be of comparable importance. In de-
termining the aggregate period of service upon which the annuity is
to be based, the fractional part of a month, if any, shall not be counted.
The annuity as so computed shall not exceed 80 per centum of the average
salary used to compute the annuity..
PART F-PERIOD FOR SERVICE FOR ANNUITIES
RECOMPUTATION OF ANNUITIES OF CERTAIN FORMER PARTICIPANTS
SEC. 855. (a) The annuity of each former participant under the Sys
tem, who retired prior to July 28, 1956, and who at the time of his,
retirement had creditable service in excess of thirty years, shall be
recomputed on the basis of actual years of creditable service not in
excess of thirty-five years. Service which was not creditable under
the System on the date a former participant retired, shall not be in-
cluded as. creditable service for the purpose of this recomputation.
The annuities payable to such persons shall, when recomputed, be
paid at the rates so determined, but no such recomputation or any
other action taken pursuant to this section shall operate to reduce the
rate of the annuity any such person is entitled to receive under the.
System.
(b) The annuity of each former participant under the System, who
retired prior to the effective date of this subsection, and who at the time of
his retirement had creditable service in excess of thirty-five years, shall be
recomputed on the basis of actual years of creditable service not in excess
of forty years. Service which was not creditable under the System on the
date a former participant retired, shall not be included as creditable
service for the purpose of this recomputation. The annuities payable to
such persons shall, when recomputed, be paid at the rates so determined,.
except that (1) no such annuity as recomputed shall exceed 80 per centum
of the average salary used in computing the annuity, and (2) no such
recomputation or any other action taken pursuant to this subsection shall
operate to reduce the rate of the annuity any such person is entitled to
receive under the System.
PART J-COST-OF-LIVING ADJUSTMENTS OF ANNUITIES
[SEC. 882. (a) On the basis of determination made by the Civil
Service Commission pursuant to section 1.8 of the Civil Service Retire-
ment Act, as amended, pertalning to per centum change in the price
index, the following adjustments shall be made:
[(1) Effective April 1, 1966, if the change in the price index from
1962 to 1965 shall have equaled a rise of at least 3 per centum, each
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14 INCREASING FOREIGN SERVICE RETIREMENT ANNUITIES
annuity payable from the fund which has a commencing date earlier
than January 2, 1965, shall be increased by the per centum rise in the
price index adjusted to the nearest one-tenth of 1 per centum.
[(2) Effective April 1 of any year other than 1966 after the price
index change shall have equaled a rise of at least 3 per centum, each
annuity payable from the fund which has a commencing date earlier
than January 2 of the preceding year shall be increased by the per
centum rise in the price index adjusted to the nearest one-tenth of 1.
per centum.
[(b) Eligibility for an annuity increase under this section shall be
governed by the commencing date of each annuity payable from the
fluid as of the effective date of an increase, except as follows:
[(1) Effective from the date of the first increase under this section,
an annuity payable from the fund to an annuitant's survivor (other
than a child entitled under section 821(c)), which annuity commenced
the day after the annuitant's death, shall be increased as provided in
subsection (a) (1) or (a) (2) if the commencing date of annuity to the
annuitant was earlier than January 2 of the year preceding the first
increase.
[(2) Effective from its commencing date, an annuity payable from
the fund to an annuitant's survivor (other than a child entitled under
section 821(c)), which annuity commences the day after the annui-
tant's death and after the effective date of the first increase under this
section, shall be increased by the total per centum increase the annui-
tant was receiving under this section at death.
[(3) For purposes of computing an annuity which commences after
the effective date of the first increase under this section to a child
under section 821(e), the items $600, $720, $1,800, and $2,160 appear-
ing in section 821 (c) shall be increased by the total per centum
increase allowed and in force under this section and, in case of a
deceased annuitant, the items 40 per centum and 50 per centum ap-
pearing in section 821(c) shall be increased by the total per centum
increase allowed and in force under this section to the annuitant at
death. Effective from the date of the first increase under this section,
the provisions of this paragraph shall apply as if such first increase were
in effect with respect to computation of a child's annuity under section
821(c) which commenced between January 2 of the year preceding the
first increase and the effective date of the first increase.
[(c) No increase in annuity provided by this section shall be com-
puted on any additional annuity purchased at retirement by voluntary
contributions.
[(d) No increase in annuity provided by this section shall apply
to amounts paid under authority of section 5 of Public Law 84--503,
as amended, section 4 of the Foreign Service Annuity Adjustment, Act
of 1965, or any other law authorizing annuity grants to widows.
[(e) The monthly installment of annuity after adjustment under
this section shall be fixed at the nearest dollar.]
Sic. S82. (a) Subject to the provisions of paragraph (b), each annuity
payable from the Fund on April 1, 1966, shall be increased by 6.1 per
centum. Each annuity payable from the Fund (other than the immediate
annuity of an annuitant's survivor or of a child under section 8.21(c))
which has a commencing date after April 1, 1966, and not later than the
first day of the sixth month which begins after the date of enactment of this
amendment shall be increased by 6.1 per centum.
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INCREASING FOREIGN SERVICE I
(b) Those annuities increased by the cost-of-living provisions of the
Foreign Service Annuity Adjustment Act of 1965 shall be adjusted to
reflect the percentage increase under paragraph (a) had it been applied to
the annuity on April 1, 1966, or its subsequent commencing date.
(c) (1) Each month after April 1966 the Secretary shall determine the
per centum change in the price index. Effective the first day of the third
month which begins after the price index shall have equaled a rise of at
least 3 per centum for three consecutive months over the price index for
the base month, each annuity payable from the Fund which has a com-
mencing date not later than such effective date shall be increased by the
per centum rise in the price index (calculated on the highest level of the
price index during the three consecutive months) adjusted to the nearest
one-tenth of 1 per centum. The month of July 1965 shall be the base
month for determining the per centum change in the price index until the
next succeeding increase occurs.
(2) In the event the Secretary determines that the price index shall
have equaled a decrease of at. least 3 per centum for three consecutive
months under the price index for the latest base month, he shall make a
detailed study to determine whether or not the annuities payable from
the Fund should be adjusted to reflect the percentage decrease in the price
index. In making such study the Secretary shall consider the specific items
for which prices decreased, the likelihood of any further consecutive de-
creases in the price. index, the type or types of annuities which should be
adjusted, if any, and the extent of any such adjustment, and all other
factors with respect to whether or not any such annuities should be adjusted.
Upon the completion of any such study, the Secretary shall transmit to the
President and Congress and Congress a full report thereon, together with
.his determination as to whether or not any such annuities should be
adjusted and his recommendations for any legislation which he deems
to be necessary or appropriate.
(d) Eligibility for an annuity increase under this section shall be
governed by the commencing date of each annuity payable from the Fund
as of the effective date of an increase, except as follows:
(1) Effective from its commencing date, an annuity payable from
the Fund to an annuitant's survivor (other than a child under section
821 (c)), which annuity commences after April 1, 1966, shall be
increased by the total per centum increase the annuitant was receiving
under this section at death; or if death occurred between April 1,
1966, and date of enactment, the per centum increase the annuitant
would have received;
(2) For purposes of computing an annuity which commences
after April 1, 1966, to a child under section 831 (c), the items $600,
$720, $1,800, and $2,160 appearing in section 82.1(c) shall be
increased by the total per centum increase allowed and in force under
this section, and in case of a deceased annuitant, the items 40 per
centum and 50 per centum appearing in section 821(c) (1) and (2)
shall be increased by the total per centum increase allowed and in
force under this section to the annuitant at death.
(e) No increase in annuity provided by this section shall be computed
on any additional annuity purchased at retirement by voluntary contri-
butions.
(f) The monthly installment of annuity after adjustment under this
section shall be fixed at the nearest dollar, except that such installment
shall after adjustment reflect an increase of at least $1.
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16 INCREASING FOREIGN SERVICE RETIREMENT ANNUITIES
TITLE IX-AI LOWANCES AND BENEFITS
PART A-ALLOWANCE AND SPECIAL ALLOTMENTS
PART B-TRAVEL AND RELATED EXPENSES
SEC. 911. The Secretary may, under such regulations as he shall
prescribe, pay-
(1) the travel expenses of officers and employees of the Serv-
ice, including expenses incurred while traveling pursuant to
orders issued by the Secretary in accordance with the provisions
of section 933 with regard to the granting of home leave;
(2) the travel expenses of the members of the family of an
officer or employee of the Service when proceeding to or returning
from his post of duty; accompanying him on authorized home
leave; accompanying him for representational purposes on
authorized travel within the country of his assignment or, at the
discretion of the Secretary, outside the country of his assignment,
but in no case to exceed one member of his family; or otherwise
traveling in accordance with authority granted pursuant to the
terms of this or any other Act:
(3) the cost of transporting the furniture and household and
personal effects of an officer or employee of the Service to his suc-
cessive posts of duty and, on the termination of his services, to
the place where he will reside;
(4) the cost: of packing and unpacking, transporting to and
from it place of storage, and storing the furniture and household
and personal effects of an officer or employee of the Service, when
he is absent from his post of assignment under orders, or when he
is assigned to a post to which he cannot take or at which he is tin -
able to use such furniture and household and personal effects, or
when it is in the public interest or more economical to authorize
storage; but in no instance shall the weight or volume of the ef-
fects stored together with the weight or volume of the effects
transported exceed the maximum limitations fixed by regulations,
when not otherwise fixed by law;
(5) the cost of packing and unpacking, transporting to and
from a place of storage, and storing the furniture and house-
hold and personal effects of an officer or employee of the Service
in connection with assignment or transfer to a new post, from the
date of his departure from his last post or from the date of his
departure from his place of residence in the case of a new officer
or employee and for not to exceed three months after arrival at
the new post, or until the establishment of residence quarters,
whichever shall be shorter; and, in connection with separation of
an officer or employee of the Service, the cost of packing and un-
packing, transporting to and from a place of storage, and storing
for a period not to exceed three months, his furniture and house-
hold and personal effects; but in no instance shall the weight or
volume of the effects stored together with the weight or volume
of the effects transported exceed the maximum limitations fixed
by regulations, when not otherwise fixed by law;
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(6) the travel expenses of the members of the family and the
cost of transporting the personal effects and automobile of an
officer or employee of the Service, whenever the travel of such
officer or employee is occasioned by changes in the seat of the
government whose capital is his post;
(7) the travel expenses and transportation costs incident to the
removal of the members of the family of an officer or employee
of the Service and his furniture and household and personal
effects, including automobiles, from a post at which, because of
the prevalence of disturbed conditions, there is imminent danger
to life and property, and the return of such persons, furniture,
and effects to such post upon the cessation of such conditions;
or to. such, other post as may in the meantime have become the
post to which such officer or employee has been assigned;
(8) the cost of preparing and transporting to their former
homes in the con United . States or to a place not more
distant., the remains of an officer or employee of the Service who is
a citizen of the United States-and of the members of his family
who may die abroad or while in travel status,
(9) the travel expenses of officers and employees of the Service
who are citizens of the United States, ' and members of their
families, while serving at posts specifically designated by the
Secretary for purposes of this paragraph, for rest and recupera-
tion to other =locations :abroad having different environmental
conditions than those at the post at which such officers and em-
ployees are serving, provided that such travel expenses shall be
united to the cost,for each officer or employee and members of
his. f amily of one round trip during any continuous two-year tour
unbroken by home leave and two round trips during any continu-
ous three-year tour `unbroken by home leave;
(10) the travel expenses of members of the family accom-
panying, preceding, or following an officer or employee if, while
raril
he is en route to. his post. of assignment, he is ordered temEYE.
for orientation and. training or is given other temporary (11) travel and related expenses, without regard to the provisions of
this or any other law, whenever he determines that extraordinary
conditions, or circumstances involving personal hardship, warrant
the payment of such expenses incident to ajpointment, service, or
separation of officers or employees of the Service, including any such
expenses of the members of their families.
SEc. 943. The Secretary shall, under such regulations as he may
prescribe, provide for physical examinations for applicants for em-
ployment and for officers and employees of the Service who are citizens
of the United States, and for their dependents, including examina-
tions necessary to establish disability or incapacity in accordance with
the provisions of section 831, and shall provide for administering inoc-
ulations or vaccinations to such officers and employees and their
dependents.
SEc. 944. Under such regulations as he may prescribe, the Secretary
is'authorized to provide medical services under part E of this title beyond
,the date of death or separation of an officer or employee.
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18 INCREASING FOREIGN SERVICE RETIREMENT ANNUITIES
TITLE 5, UNITED STATES CODE
SUBCHAPTER III-OVERSEAS DIFFERENTIALS AND
ALLOWANCES
? 5925. Post differentials
A post differential may be granted on the basis of conditions of en-
vironment which differ substantially from conditions of environment
in the continental United States and warrant additional pay as a
recruitment and retention incentive. A post differential may be
granted to an employee officially stationed in the United States who
is on extended detail in a foreign area. A post differntial may not
exceed 25 percent of the rate of basic pay, except that in a foreign area.
where there is unusual danger of injury due to hostile activity such addi-
tional compensation shall not exceed 50 per centum.
CHAPTER 63-LEAVE
SUBCHAPTER II-OTHER PAID LEAVE
? 6324. Absence of certain police and firemen
(a) Sick leave may not be charged to the account of a member of
the Metropolitan. Police force or the Fire Department of the District
of Columbia, the United States Park Police force, or the White House
Police force for an absence due to injury or illness resulting from the
performance of duty.
(b) The determination of whether an injury or illness resulted
from the performance of duty shall be made under regulations pre-
scribed by-
(1) the Commissioners of the District of Columbia for mem-
bers of the Metropolitan Police force and the Fire Department of
the District of Columbia;
(2) the Secretary of the Interior for the United States Park
Police force; and
(3) the Secretary of the Treasury for the White House Police
force.
? 6325. Absence resulting from hostile activity
No leave shall be charged to the account of any officer or employee for
absence, not to exceed one year, due to an injury or illness incurred while
serv:ng abroad and resulting from hostile activity or clearly caused by the
fact that the officer or employee was located abroad.
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UNITED STATES INFORMATION AND EDUCATIONAL
EXCHANGE ACT OF 1948, AS AMENDED
SEC. 1012. Notwithstanding the provisions of section 522 of the
Foreign Service Act of 1946, as amended, appointments or assignments
of Foreign Service Reserve Officers for service with the United States
Information Agency may be of unlimited duration. The provisions
of section 527 of such Act shall not be applicable with respect to any
such appointment or assignment.
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